Significant change in marine fuel, aimed at reducing emissions from ships, is running smoothly
In terms of adaptation to the 2016 Paris climate agreement, IMO members also agreed to reduce their greenhouse gas emissions by half of 2008 levels by 2050.
Low sulfur fuel costs and sales price increased. It was a misfortune to see that the transition period was held at the beginning of the year and that this year hit the precise time of the year-end inventory accounts and holidays. There have been questions about fuel availability and fuel performance, it continues to decrease.
The pain of the transition period is experienced. There are many risky discourses and rumors that blur the minds. Some ships say they can supply old fuel and still use it. Some break the rules and continue to pursue old fuel until supply is saturated.
There are still old fuels in the tanks. Removal of old fuel and old fuels from tanks is a process. So there is not enough new fuel. When the demand is high and the supply is low, the situation arises and the prices are high. Ships wait longer for refueling.
The situation is getting better every day. Many fuels have little trouble in supplying new fuel at the port, and a significant change in marine fuel, which aims to reduce emissions from ships, is running smoothly.
The fear that some shipowners will not have sufficiently low sulfur fuel or do not work well on ship machines seems to be unfounded so far.
Marine transport managers rightly say that the use of low sulfur fuel will only add approximately $ 50 billion in fuel costs over the next three to four years and plan to transfer the costs to their customers.
Low sulfur fuel in Singapore, one of the largest refueling centers in the world, was recorded as an average of $ 670 this week, at a price of 64% higher than $ 409 per tonne. Bunker brokers say the 60% difference is far above expectations, but the deficit is expected to narrow within the next few months.
One of the biggest challenges of IMO is the implementation of new fuel regulations by member states. This week, China arrested two ships allegedly using incompatible fuel, according to Standard P&I Club, a major marine insurer.
IMO says it is monitoring the situation, and while there have been some reports of compatible fuel / oil supply in some markets to date, there have been no major problems so far.
Some ship operators, especially tanker owners, prefer to limit the control of sulfur emissions to exhaust systems called scrubber, which wash the flue gas by cleaning it. These systems cost a few million dollars, but companies using them may benefit from huge operating cost savings over the next few years, unlike those who have spent more on the new, more expensive low-sulfur fuel.