IMO 2020

IMO 2020: Spike in need for credit could fuel consolidation

Small and medium-sized players in bunker sector could be affected by extended credit lines coming 2020.

Published

7 years ago

March 7, 2019

Admin

The following article written by Mette Kronholm Frænde, Communications Manager and Editor at BIMCO, appeared in the latest edition of the BIMCO Bulletin magazine:

With an expected spike in the price of low-sulphur fuel as 2020 approaches, shipowners and bunker suppliers will need extended credit lines. For the big players, extended credit is unlikely to be a problem, but for small and medium-sized players, it might be.

The conversation surrounding 2020 has for many months been centred on the quality and availability of fuel. But what about the credit?

There is little doubt within the industry that the cost of compliant fuel will rise. The price hike means bunker suppliers may or may not have sufficient credit lines, and that they may need to pass the tightening of credit on to shipowners and operators.

Facing a confidence deficit

Whether bunker supplier or end user, the need for credit will rise – perhaps significantly – and cash flows will come under pressure for some of the industry’s small and medium-sized players that do not enjoy the same strength of balance sheet as the large companies.

“Frankly, everyone is going to be challenged. Quite clearly, there is going to be a huge strain on credit lines,” says Paul Millar, Head of Global Credit at Bomin Bunker Holding GmbH & Co.

“Our customers, the shipping companies, will be among the most challenged. They will be hit by higher fuel costs and they will need more working capital. If this rise in fuel cost is not matched by the income they receive, it will hurt their profitability, and it may turn some companies negative,” he says.

According to Millar, it may well be that fuel suppliers are not willing to give smaller and mid-sized shipping companies the extra credit needed, depending on their credit worthiness. Similarly, for small bunker traders that rely on payments coming in on 30 days, in order to pay their suppliers in 30 days, it is possible that they do not have the working capital to support the higher credit lines.

Moreover, banks have in recent years taken large losses from the shipping industry, which could result in a more cautious approach towards lending and credit.

“We will be heading towards a riskier environment. When it comes to risk and return, we will see a confidence deficit as we get nearer to 2020. These are tough times,” Millar says.

“Banks are not terribly positive about this sector. The industry will need more working capital, and the banks know that the market is a risky environment because of the general dynamics in the market: the US-China trade war, Brexit and sanctions against Iran. Banks do not like these factors. So it is, quite simply, going to be a tough environment,” he says.

Mergers, alliances and downsizing

Douglas Raitt, Regional Consultancy Manager at Lloyd’s Register in Singapore, expects to see mergers, alliances and downsizing on both sides as a result – both for shipping companies and bunker suppliers and traders.

“I think what could happen as a result of tightening credit, is that smaller bunker suppliers might call it a day. It is among the smaller players – of which in Singapore you have many – that we could see a considerable number exiting the market come 2020,” says Raitt.

“We will see consolidation among shipowners too. We are, in fact, already seeing it, and this is a trend that will continue. But the large players will not have an issue,” he says.

This scenario is also expected by Paul Millar.

“We are already seeing it. Strategies are changing. The Bomin strategy has changed from being a massive global player to what is now a more focused player, primarily in the Americas, North America, Panama, Ecuador and Germany,” Millar says.

“The main reason for this change in strategy is concern over what is coming our way in 2020. The change in strategy has been difficult but necessary. No-one likes shrinking.”

Source: BIMCO
Published: 7 March, 2019

Ammonia

AM Green plans to build green ammonia plant at Indian port

Initiative also includes development of green ammonia handling, storage and bunkering infrastructure, pilot bunkering operations, safety procedures and training programmes, says VOC Port Authority.

Published

1 day ago

June 3, 2026

Admin

VO Chidambaranar (VOC) Port Authority on Friday (29 May) said it has signed a Memorandum of Understanding (MoU) with India’s ammonia producer AM Green Ammonia to collaborate in the development of a green ammonia production plant.

The plant will have a capacity of one million tonnes per annum (MTPA) at Tuticorin.

The initiative also includes development of green ammonia handling, storage and bunkering infrastructure, pilot bunkering operations, safety procedures and training programmes.

The project is expected to support the development of green fuel corridors connecting VOC Port with major ports in Europe and Asia, thereby strengthening India’s position in the global green fuels value chain.

VOC Port also signed a Memorandum of Understanding (MoU) with Bureau Veritas (India) Pvt. Ltd., to collaborate on Green Port certification, emissions accounting, ESG reporting, safety validation, development of green bunkering practices, and establishment of a Centre of Excellence for green fuels and sustainability.

The port also plans for an upcoming 750 m³ green methanol bunkering facility.

Photo credit: Naveed Ahmed on Unsplash
Published: 3 June, 2026

Port & Regulatory

Study: Major drop in ship sulphur emissions confirmed following IMO regulations

National Centre for Atmospheric Science study found that the average sulphur content in ship fuel dropped nearly tenfold in open ocean areas following IMO’s 2020 regulation.

Published

6 months ago

December 8, 2025

Admin

Recent global regulations have significantly reduced sulphur emissions from ships, helping to improve air quality in coastal regions – confirmed by a recent international study led by researchers at the National Centre for Atmospheric Science.

The research, published in Environmental Science: Atmospheres, used aircraft and ground-based instruments to measure sulphur dioxide and nitrogen oxides emitted by ships in the North-East Atlantic and European coastal waters between 2019 and 2023.

The team found that the average sulphur content in ship fuel dropped nearly tenfold in open ocean areas following the International Maritime Organization’s 2020 regulation, which capped sulphur content in marine fuel at 0.5%.

Before the change, many ships exceeded the previous 3.5% limit. After 2020, only a small number of ships were found to breach the new standard.

In European sulphur Emission Control Areas (SECAs), such as the English Channel and the Port of Tyne, sulphur levels were even lower – well below the stricter 0.1% limit. Interestingly, ports outside these zones, like Valencia in Spain, also showed low sulphur levels, likely due to EU rules requiring cleaner fuel when ships are docked for extended periods.

This is the first study to use aircraft-based measurements and predictions from the Ship Traffic Emission Assessment Model (STEAM3) to assess ship emissions outside of sulphur control zones since the 2020 regulation came into effect. The findings support the widely held view that ships now emit around seven times less sulphur than before the rule change – an important step toward cleaner air and healthier coastal environments.

Note: The research, titled ‘SO2 and NOx emissions from ships in North-East Atlantic waters: in situ measurements and comparison with an emission model’ can be found here.

Photo credit: shraga kopstein on Unsplash
Published: 8 December, 2025

Interview

IBIA Annual Convention 2025: ‘Exciting times’ for post IMO 2020 bunker suppliers, states Equatorial

Choong Sheen Mao, Chief Operating Officer, Equatorial, describes to Manifold Times the pre/post IMO 2020 challenges and evolution of bunker suppliers.

Published

7 months ago

October 31, 2025

Admin

The International Bunkering Industry Association (IBIA) will be hosting its flagship Annual Convention in Hong Kong at the Hong Kong Convention Exhibition & Convention Centre between 18 to 20 November 2025, as part of Hong Kong Maritime Week.

Choong Sheen Mao, Chief Operating Officer, Equatorial Marine Fuel Management Services (Equatorial), speaks to bunkering publication Manifold Times about the challenges of a post IMO 2020 bunker supplier.

MT: How does Equatorial continue to offer customer assurance and maintenance of marine fuel quality to ISO8217 standards despite increasing complexity of bunker fuel blends?

We maintain our focus to provide compliant, quality and competitively priced products to our customers. There is no shortcut. We source our products from a wide range of cargo producers and suppliers. We continue to be strict and vigilant with our testing programme for our products before delivering them to our customers. Equatorial has deepened our engagement with the wider industry to have a better and up-to-date understanding of the existing and new marine fuels.

MT: Can you share the evolution of commercial marine fuel procurement, blending and trading strategies on the back of increasing fuel types (pre/post IMO 2020)?

Pre IMO 2020, the main types of marine fuel procured and consumed by vessels were high-sulphur fuel oil, marine diesel oil and marine gas oil. Trading strategies were therefore closely linked to that within the oil industry.

However, many of the new fuel types are from other industries. For example, biofuels, methanol and ammonia are mainly products from the chemical and agriculture industries. There are marked differences between these industries and the energy industry (in particular, the marine fuels industry). LNG is from the gas industry which is distinct from the oil industry.

Without an existing liquid paper market for many of these commodities (especially as a marine fuel), the price risk management is less straightforward. Furthermore, commodity prices are no longer the sole consideration for price itself. The price of compliance must be considered. This could range from guaranteeing the origin of the marine fuel, its sulphur properties as well as its carbon intensity. The list goes on.

MT: Operational wise, what are the changing role and responsibilities of a bunker supplier to date, compared to before IMO 2020?

The role and responsibility of a bunker supplier have evolved. Fundamentally, it has been about providing quality marine fuels at competitive prices. Quantity assurance has been a critical concern which led to the mandatory implementation of the mass flow meter system for bunkering in the Port of Singapore. Interestingly, due to the nature of credit terms in the bunker industry, bunker suppliers also performed the role of “bankers” by extending favourable credit terms to shipowners and charterers.

These days, post IMO 2020, things have become even more complicated. Today, a bunker supplier retains the abovementioned roles and responsibilities, and much more – it has to ensure compliance with a plethora of rules and regulations. Compliance not only with sulphur cap requirements, but with international and regional sanctions and restrictions unrelated to the quality of the marine fuel itself. In fact, especially with alternative low- and zero-carbon marine fuels, this means compliance with standards, rules and regulations on sustainability such as the European Renewable Energy Directive and/or International Sustainability and Carbon Certification. There is also the need to comply with increasingly stringent safety regulations on both conventional and alternative marine fuels.

In addition to the above, a post IMO 2020 bunker supplier is still expected to supply compliant and quality fuel at competitive prices.

MT: Equatorial is Singapore’s largest local-born supplier; what is the next big thing for the company?

Equatorial continues to adapt and improve with the times, while maintaining its core values – Integrity, Teamwork, Commitment, Proficiency and Quality, and Safety and Environment. The bunker industry is a highly competitive one, and it is our intention to keep our competitive edge and remain relevant. This means that we have had to step out of our comfort zone and embrace the two mega trends of our time – digitalisation and decarbonisation.

We have been early adopters and developers of the electronic bunkering note as part of our own digital bunkering efforts. We have diversified our product offering to include low carbon marine fuels and are proud to be one of the pioneers for bunkering B100 biofuels earlier this year. This was made possible by the arrival of our IMO Type II chemical and oil bunker tankers. These same bunker tankers are also capable for carrying and delivering methanol. Equatorial has invested in an LNG bunkering vessel (LBV) newbuilding that is set to be delivered in Q3 2027. We are also involved in a study to develop low- or zero-carbon ammonia bunkering in Singapore.

These are exciting times.

Note: Choong Sheen Mao is amongst panellists featured in ‘Session Three: Bunker Sellers Panel’ at the IBIA Annual Convention 2025.

Join the Conversation

With over 300 delegates expected, the IBIA Annual Convention 2025 is set to be a defining moment for the marine fuels industry. Registration is now open via the IBIA Annual Convention website.