IMO 2020 sulphur cap will boost the demand for more compliant fuel and will lead to different dynamics in the bunker fuel and tank storage sectors, says an article published in Safety4Sea.
Rotterdam bunker conference
During a conference in Rotterdam, René Loozen, Consultancy Director at Insights Global stated that the upcoming IMO 2020 sulphur cap will
- boost the demand for more IMO 2020-compliant fuel and
- will lead to different dynamics in the bunker fuel and tank storage sectors.
Specifically, the Consultancy Director, speaking at ARACON bunker conference in Rotterdam, Loozen, highlighted the changes that are to come in the bunker and tank sectors.
The four bunker hubs
The largest bunker hubs from the perspective of tank capacity are ARA and Houston, followed by Singapore and Fujairah.
- These four bunker hubs account for about 10% of market share.
- Also, ARA has a 40% share, whereas Houston has a 34% with capacity expansion from just under 20 million cbm in 2005 to around 32 million cbm this year.
- Singapore has a 16% share and lastly, Fujairah holds a 10% share.
Change in trade flows
Moreover, he added that the 2020 sulphur cap will
- provide different dynamics in the bunker fuel and tank storage sectors and
- changes in the trade flows in bunker fuels and an increase in demand for storage.
For the time being, what remains a challenge for the refiners is trying to keep up with the different fuel options.
Loozen’s assessments
According to his assessment, on the potential demand for 0.50% sulphur fuels, he noted that industry consultants’ opinions varied considerably, with estimates of 0.50% sulphur fuel uptake ranging from 25%-50% of total bunker fuel demand.
Concerning the ARA region, Mr Loozen added that refiners have yet not invested in desulphurization to be in line with the sulphur cap. On the contrary, they chose the installation of capacity to convert their residual fuel into gasoil and diesel.
Concluding, Mr Loozen stated that the market in the EU is expected to develop in the following years, as in 2020 the LSFO will account for 20.1 million tonnes of the total.
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Source: Safety4Sea
