14OCT2019 - NEWS - Japan Starts 0.5% Sulfur Bunker Fuel Oil Supply Ahead of IMO 2020 Mandate

The IMO will cap global sulfur content in marine fuels at 0.5% on January 1, down from the current 3.5%. This applies outside the designated emissions control areas, where the limit is already 0.1%.

Currently, IMO 2020 compliant bunker fuels still represent only a fraction of Japanese refiners’ entire bunker fuel supply, but the proportion of cleaner fuels is expected to rise in the coming months as demand accelerates.

Low sulfur IMO 2020 compliant fuels are now available at 14 out of the 22 refineries, with three more refineries expected to be ready before year-end.

Japan’s potential LSFO demand for bunkering is estimated to be around 100,000 b/d, according to S&P Global Platts calculations based on market information. This includes demand for domestic coastal vessels.

While Japanese refiners are ramping up LSFO production, they are still likely to maintain HSFO supplies to serve owners/operators installing scrubbers on their ships.

Japan has decided it will support the use of open-loop scrubbers aboard ships. Based on its environmental assessment, Japan will not ban discharge of washwater from open-loop scrubbers in its port waters, even though many ports worldwide have or are preparing to implement such bans.