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BUNKER INDEX :: Price Index, News and Directory Information for the Marine Fuel Industry
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85% of refiners do not have plan to cope with 2020 bunker regulation: survey

17 Jul 2017 13:08 GMT

Survey suggests refiners are unprepared to meet demand for low-sulphur marine fuel.



Only 15 percent of oil refiners know how they are going to cope with the 0.5 percent global cap on the sulphur content of marine fuel in 2020, a survey by KBC reveals.

In the survey, entitled 'The IMO's 2020 marine fuel sulphur cap and challenges for the global refining industry - time for action is now!', refiners across the US, Europe, the Former Soviet Union and South Africa were questioned about their attitudes to the upcoming regulation.

KBC states that the estimated industry cost to meet the new standard is $2 billion, with the study's findings suggesting there is still uncertainty around how to respond.

Stephen George, Chief Economist at KBC, explained: "While the shipping industry expects the refiners to meet their supply requirements, the refining industry is still waiting to know to what extent the shipping industry will install emission 'scrubbers' on board.

"This disconnect proves that now is the time for refiners to assess what choices are available and the decisions to be made for a strategic pathway forward," George noted.

"This is a wake-up call. Failure of refiners to study, agree and implement a robust strategy will leave many of the 'less complex' refineries severely economically disadvantaged.

"With refineries suffering in recent years from overcapacity and oversupply, the bunker fuel transition may prove a perfect time to implement new margin-boosting technology - although a one size fits all approach is not recommended.

"Implementing such technology for the reduction of other emissions and meeting other regulatory requirements at the same time may help to future-proof refineries while boosting margins and delivering the cleaner fuels that the shipping industry will continue to require. New refinery optimization strategies based on rigorous simulations, analytics and real-time data integration will assure continued compliance without sacrificing margin capture and subsequently protecting the price at the pump for consumers," concluded George.




Related Links:

Refiners may 'struggle to cope' with MGO demand in 2020
BIMCO voices 'serious concerns' over IMO sulphur cap study
'Extreme difficulty' for refiners to meet 2020 sulphur cap demand, says study
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