Urgent preparation needed for 2015 sulfur regulations

Marine fuel trading company Dynamic Oil Trading has called on ship owners and operators to prepare now to ensure that they can still meet their supply requirements for compliant products within emission control areas (ECAs), and to work collaboratively with their fuel suppliers in order to minimize the impact on their operations and profitability.

From 1 January 2015, all vessels sailing in the designated ECA zones in the Baltic Sea, the North Sea, the waters off the US and Canadian coastline and the US Caribbean Sea will be required to use fuel with a maximum sulfur content of 0.1%, a significant reduction from the current ECA limit of 1%.

According to Dynamic Oil Trading, this has led to concerns among owners and operators in regards to the availability of sufficient fuel stocks and, in particular, the financial impact resulting from the requirement to buy more costly distillate products and how this will affect the profitability of operations, even calling into question the viability of certain routes.

Lars Møller, CEO of Dynamic Oil Trading, commented: Whilst there are a number of compliance options available for vessels, neither scrubbers, nor alternative fuels such as LNG, will be deployed in large numbers in the short term.

“This leaves most owners and operators looking at distillates as the most viable solution. Not only do these carry a significant price premium, but the implications of the new sulfur rules on fuel availability are also unclear, given the uncertain impact on both fuel supply and demand.

“It is therefore vital that every operator with vessels travelling through ECAs prepares now in order to find the optimal fuel procurement strategy that ensures access to high quality, on spec fuel products and that also keep their fuel bill down. Waiting until the last minute risks compromising availability, quality and price”.

Adapted from a press release by Emma McAleavey.

Read the article online at: https://www.hydrocarbonengineering.com/gas-processing/01072014/urgent_preparation_needed_827/