19JUL2019 - NEWS - Big shipping concerns as sulphur fuel cap deadline approaches

With less than six months to implementation, the shipping industry would have largely decided on the best way to tackle this new sulphur cap. As we have mentioned in previous notes, the options are: burn a compliant fuel, install scrubbers which will allow vessels to continue using high sulphur fuel oil (HSFO), retrofit with LNG engines or not comply with the new regulation.Suppliers have spent some time coming up with compliant 0.5% sulphur fuel oil or very low sulphur fuel oil (VLSFO), and we do think that a general industry move towards a compliant fuel remains the most likely outcome. However, this comes with its own challenges. Firstly moving to a compliant fuel is going to be costly, and the extent of this depends on whether shipowners go the route of a VLSFO or a marine gasoil (MGO), with the latter being more expensive. The key concern with VLSFO is the issue of commingling- while two fuels may be compliant and stable, they may be incompatible, leading to the potential for sediment formation. Secondly is the issue of fuel availability, with compliant fuel potentially not available at smaller bunkering ports.