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IMO 2020

EIA: Coming changes in marine fuel sulfur limits will affect global oil markets

Decisions refiners and shippers make due to IMO 2020 affect one another, adding to uncertainty and complexity.

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Mason Hamilton of the U.S. Energy Information Administration in December published an analysis on how IMO 2020 will affect global oil markets:

International regulations limiting sulfur in fuels for ocean-going vessels, set to take effect in January 2020, have implications for vessel operators, refiners, and global oil markets. Stakeholders will respond to these regulations in different ways, increasing uncertainty for crude oil and petroleum product price formation in both the short and long term.

When burned, the sulfur in marine fuel produces sulfur dioxide, a precursor to acid rain. The sulfur content of transportation fuels has been declining for many years because of increasingly stringent regulations implemented by individual countries or groups of countries. In the United States, federal and state regulations limit the amount of sulfur present in motor gasoline, diesel fuel, and heating oil.

The upcoming 2020 rules apply across multiple countries’ jurisdictions to fuels used in the open ocean, representing the largest portion of the approximately 3.9 million barrel per day global marine fuel market, according to the International Energy Agency.

The International Maritime Organization (IMO), the 171-member state United Nations agency that sets standards for shipping, is set to reduce the maximum amount of sulfur content (by percent weight) in marine fuels used on the open seas from 3.5% to 0.5% by 2020. These regulations are intended to reduce sulfur dioxide, nitrogen oxides, and other pollutants from global ship exhaust.

The 2020 reduction in sulfur limits follows a series of similar reductions in marine fuel sulfur limits, such as those that reduced sulfur content of marine fuels in IMO-designated Emission Control Areas from 1.0% to 0.1% in 2015. Other areas around ports in Europe and parts of China have adopted similar sulfur restrictions.

Vessel operators have several choices for compliance with the new IMO sulfur limits. One option is to switch to a lower-sulfur fuel compliant with the new IMO rules. However, the cost, widespread availability, and specifications of a new fuel for use in marine engines is still uncertain.

Another option is to use scrubbers to remove pollutants from ships’ exhaust, allowing them to continue to use higher-sulfur fuels. However, the process of installing scrubbers can be costly and can increase a ship’s operating costs. A small portion of existing marine vessels has already installed scrubbers, and that portion is not expected to increase greatly before 2020 because of time constraints and limited installation capacity. Even if scrubbers become widely adopted, which would allow the continued use of fuels with higher-sulfur content, the price and availability of higher-sulfur fuels after 2020 remains uncertain.

Ships also have the option to switch to nonpetroleum-based fuels. Some newer ships and some currently being built have dual-fuel engines that would allow them to use nonpetroleum-based fuels such as liquefied natural gas (LNG) after minimal modifications. However, the infrastructure to support use of LNG as a shipping fuel is currently limited in both scale and availability.

The upcoming IMO regulations pose a significant challenge for global petroleum refineries: how to increase the supply of low sulfur products for use in marine applications and minimize the output of high sulfur oils.

Residual oil—the long-chain hydrocarbons remaining after lighter and shorter hydrocarbons such as gasoline and diesel have been separated from crude oil—currently makes up the largest component of marine fuels used by large ocean-going vessels, also known as bunker fuel. Removing sulfur from residual oils or upgrading them to more valuable lighter products such as diesel and gasoline can be an expensive and capital-intensive process.

The choice of compliance path for vessels also introduces a risk to refiners: if scrubbers become widely adopted, higher-sulfur residual oils might still be used, potentially reducing the value of existing and new refining units capable of upgrading the residual oils.

One approach refineries could pursue is to divert more low sulfur distillate fuel into the bunker fuel market, which would mean ocean-going ships would be competing with trucks, heavy equipment, trains, and planes for supplies of distillate fuels at a time when global demand for distillate is already high. To respond to added demand for distillate fuels, refineries can increase the rate they process crude oil or invest and build more refinery capacity to produce distillate fuels. Both options would increase demand for crude oil.

Refineries might also choose to process crude oils that are lower in sulfur, yield a greater amount of distillates, and yield lower amounts of residual oils. Changes in the types of crude oil refineries purchase would then change how different crude oils are priced relative to each other and crude prices overall.
The decisions refiners and shippers make in response to the IMO 2020 rules heavily influence one another, adding to uncertainty and complexity. In January 2019, EIA will release the first Short-Term Energy Outlook that includes monthly projections through December 2020. This report will discuss short-term implications and uncertainties surrounding the IMO regulations. Later that month, the Annual Energy Outlook 2019 will describe potential long-term implications of the regulations.

Source: U.S. Energy Information Administration
Photo credit: U.S. Energy Information Administration, based on International Maritime Organization
Published: 28 December, 2018

 

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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.

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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

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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.

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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

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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.

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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.

 

Photo credit: Manifold Times
Published: 31 October 2025

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