"Prediction is very difficult, especially if it's about the future." This quote attributed to Nils Bohr, Nobel laureate in Physics, is a good reminder that even the sharpest minds and best models can get it wrong. Predicting how 2020 will play out is fraught with uncertainties and there is currently no consensus regarding questions about the availability and quality of marine fuels complying with the 0.50% sulphur limit when it takes effect on 1 January 2020. There are optimists and there are pessimists. At IBIA, we are mainly pragmatic, so perhaps our attitude can be described as follows: “Let’s hope for the best but be prepared for the worst. Awareness of the worst, and preparing for it, could help prevent it.”
The best would be if the industry is able to celebrate New Year’s Eve at the end of this year safe in the knowledge that sufficient fuels of acceptable quality are available to meet demand from a global fleet that is ready to comply with the 0.50% sulphur limit, and that the portion of the fleet using alternative fuels or scrubbers to comply have identified and arranged supply sources. That’s probably a too optimistic, so what we need to prepare for a less ideal scenario.
Ships should not be unduly penalised if they come up against a genuine lack of compliant fuel. At the same time, they must have a clear incentive to seek out and use compliant fuels; otherwise, the expected price difference between compliant and non-compliant fuels will tempt some to carry on using high sulphur fuel oil (HSFO). The IMO is developing a standard format for reporting fuel oil non-availability and will set out guidelines, seeking the right balance.
The bunker industry, meanwhile, has a huge task ahead in replacing HSFO, the main marine fuel today, with fuels meeting the 0.50% sulphur limit. The expectation is that most fuels complying with the 0.50% sulphur limit will be blends rather than fuels fitting ISO 8217 distillate marine (DM) grade specifications, in order to produce sufficient quantities of bunker at a lower cost than DM grades like marine gasoil/diesel oil (MGO/MDO).
A major market misconception is the notion that such blending is new and that fuels produced to meet the 0.50% sulphur limit won’t conform with ISO 8217 specifications. However, bunker fuels sold and used today, both residual marine (RM) and DM grade fuels, are blends produced from more than one refinery stream. It’s just that the blend recipe needs to change for the current RM grades to meet the lower sulphur limit.
Currently, RM grades are typically blended to meet maximum limits for density and viscosity and when using these two as blend targets, limits for most other parameters defined in ISO 8217 are also met. But in order to meet the 0.50% sulphur limit, the portion of high sulphur ingredients in the recipe will have to be reduced. This will affect other parameters too, but compliant fuel blends will still conform to existing ISO 8217 specifications.
There is a risk that the new blend recipes won’t be perfect, and that bunker fuel producers introduce new ingredients to the mix. Key concerns centre around fuels with poor stability, failing to meet the SOLAS flashpoint limit or containing chemical components with an adverse impact on machinery systems. The truth is that fuels will still need to meet the SOLAS flashpoint limit and existing ISO 8217 parameters that indicate fuel stability, or they will be ‘off-spec’ and hence not commercially viable. All blend components need to be permissible under the scope of the ISO 8217 standard and as such should not open the door to including contaminants. New low sulphur fuel blends produced and tested have so far performed well, which is promising.
Another risk is that various new fuel blends won’t be compatible, and unfortunately it looks like that risk will be much higher than it is today because products will vary much more in their chemical composition. Compatibility isn’t covered by the ISO 8217 standard and is a fuel management issue. Suppliers do not guarantee compatibility as they have no way of knowing whether a ship will co-mingle their product with something else onboard and whether those fuels will be compatible. Ship operators need to be fully aware of the potential for different batches of fuel being incompatible and ensure product segregation and proper handling onboard.
Although the new low sulphur fuel blends will be produced to fit within the existing ISO 8217 specifications, ISO is looking to help the market by investigating additional test methods to determine stability and compatibility. Later this year, ISO is expected to provide guidance in a Publicly Available Specification (PAS) to help prepare fuel suppliers and users to manage concerns about the nature of fuel blends produced to meet the 0.50% sulphur limit.
Preparation is the key to success.
By Unni Einemo, Director, International Bunker Industry Association (IBIA)
The views presented hereabove are only those of the author and not necessarily those of SAFETY4SEA and are for information sharing and discussion purposes only.
About Unni Einemo
Unni Einemo joined IBIA in April 2016 after having worked for nearly two decades as a journalist and analyst specialising in the marine fuel and shipping industries. Through writing, and regularly attending industry conferences and meetings at the International Maritime Organization, Ms. Einemo has gained expert industry knowledge, in particular on regulatory affairs and fuel quality issues. She earned a reputation for accurate and insightful reporting, and the ability to digest and communicate complex subject matter to the public. She is well respected for her analytical and editorial skills.