Global Regulatory Change is Coming in 2020 for the Marine Fuel Market
Today’s ships traverse the world’s oceans using two main types of fuels: residual based fuel and distillate fuel. Most ship engines are optimized for residual based fuel, with a sulfur content of up to 3.5% which contributes significantly to global pollution.
In October 2016, the United Nations’ International Maritime Organization (IMO) implemented a sulfur cap on global marine fuels from 3.5% to 0.5%, effective January 1, 2020.
As a result, there will be a major shift in demand for marine fuels:
Distillate fuel oil demand for Marine Gasoil (MGO), Marine Diesel Oil (MDO), and Diesel will increase 8%, which would be the largest jump to date for this fuel and is expected to disrupt the market for other distillates such as ULSD.
High Sulfur Fuel Oil (HSFO) supply will drop by 50%, stranding a vast amount of high sulfur residual materials.
Unless HSFO components can be re-purposed, the net impact will be a drop-in supply by approximately 1.7 million barrels per day (MMbpd). What would happen to the crude market if OPEC suddenly cuts 1.7 MMbpd of production?
Challenges and Existing Options
IMO 2020 introduces two distinct problems for the maritime industry. First, excess HSFO will no longer be usable, posing a potential disposal crisis. Second, ships will be short of compliant fuel. The maritime industry has three viable options to solve these issues:
New Solutions for IMO 2020
IMO 2020 has created a large gap in the marine fuels market. Rigby Refining™ LLC has developed a patent pending process that is the best solution for ship owners and the industry to comply with IMO 2020. Rigby Fuel™ (VLSFO) will be completely compliant and will minimize negative impacts to ship engines that will occur from switching fuels. It will also prevent the requirement for expensive modifications and operator changes while still enhancing performance and efficiency for all ships.
Get in Touch
Contact the Rigby Team to discuss various opportunities with Rigby Refining LLC. We will answer your questions and provide the information you need to understand all the benefits, options and opportunities that exist with Rigby Refining LLC. We look forward to working together with you on these exciting opportunities.