New types of bunker fuel will be developed to meet demand for low sulfur marine fuel following the decision of the International Maritime Organization to impose a global 0.5% sulfur cap on marine fuel in 2020, according to bunker industry organization IBIA.
The pattern began in 2015 when new fuel types emerged in the wake of tougher sulfur limits on marine fuel in emission control areas, the IBIA said, adding the same will happen with the 2020 deadline.
"We saw the introduction of a range of novel fuel formulations that cost less than marine gas oil [following the 0.1% sulfur cap in ECAs in 2015]," the IBIA said. That pointed to a future where the global 0.5% cap would not rely on a wholesale switch to distillates.
"We are likely to see many new types of fuel blends to meet the 0.5% limit from professional blenders and refineries. Based on what we have seen with the new ECA fuels so far, we can expect more widespread use of vacuum gas oil, and the use of very low sulfur heavy fuel oil where available with a bit of low sulfur blend stock added."
The IBIA also said that while some refineries have been exploring opportunities to produce specific 0.5% marine fuels from existing product streams and others "may desulfurize HFO, there are some independent innovators looking to get into the marine fuel market by stripping sulfur out of HFO."
The IMO's Marine Protection Environment Committee had two options on when to impose a global sulfur cap -- 2020 or 2025 -- when it met in London at the end of October.
Some delegations and parties to the Marpol convention -- on which the sulfur cap is based -- argued for the latter date on the grounds a squeeze on distillates fuel could force prices up across a range of oil products.
