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E.I.A. forecasts bunker demand for U.S. refiners and ocean vessels

Projects distillate usage in low-sulphur bunker fuels rising from 36% in 2019 to 57% in 2020 for U.S. market.

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The U.S. Energy Information Administration on Monday (4 February) published an analysis on how changes in marine fuel sulphur limits will affect the operation of U.S. refiners and ocean going vessels:

The implementation of new regulations affecting marine fuel specifications will have implications for crude oil and petroleum product markets over the coming decade. Previous Today in Energy articles described these regulations and the short-term implications for refining margins through 2020. Today’s article discusses the longer-term implications of the market changes projected in EIA’s recently released Annual Energy Outlook 2019, as the response to these regulations will likely involve changes to ships, marine fuels, refining, and some infrastructure in the next six to eight years.

The International Marine Organization’s (IMO) new regulations limit the sulfur content in marine fuels used by ocean-going vessels in international waters to 0.5% by weight starting in January 2020, a reduction from the previous global limit of 3.5% established in 2012. This lower limit will change the way bunker fuel (the fuel mix consumed by large ocean-going vessels) is consumed in the United States, which, according to AEO2019, accounted for about 411,000 barrels per day (b/d) in 2018. This volume represents 3% of total transportation energy use and 1% of total U.S. petroleum and liquid fuel use.

This upcoming change will have wide-scale repercussions for the shipping industry and refineries in the United States and worldwide. Globally, marine vessels account for a critical part of the global economy, moving more than 80% of global trade by volume and more than 70% by value. Marine vessels also consume about 4 million b/d of petroleum, 4% of total global oil consumption. As outlined in a previous Today in Energy article, there are three main pathways for meeting the more stringent sulfur content regulations:

  • Installing scrubbers to remove pollutants from ships’ exhaust so ships can continue consuming high-sulfur residual fuel oil
  • Switching to lower-sulfur residual fuel oil or blending with distillate fuel oil to achieve lower-sulfur fuel mixes
  • Switching from petroleum-based fuels to other fuels such as liquefied natural gas (Because this option involves retrofitting costs, it is likely to be constrained to new builds.)

Residual oil currently accounts for the largest component of bunker fuel. EIA projects that the share of high-sulfur residual fuel oil consumed by U.S. ocean-going marine vessels will quickly drop in the near term, from 58% in 2019 to 3% in 2020 because few ships currently have scrubbers installed or will have them installed by 2020. As some ships install scrubbers that allow them to consume higher-sulfur fuels, EIA expects the residual fuel share to rebound partially to 24% in 2022.

Switching to lower-sulfur residual fuel oil or higher distillate blends is likely to be a more common compliance option for U.S. vessels. EIA projects that the share of low-sulfur residual fuel oil consumed in the U.S. bunker fuel market will increase from close to zero in 2018 to 38% in 2020. Similarly, EIA projects that the need to use distillate in lower-sulfur bunker fuels will increase distillate’s share of U.S. bunkering demand from 36% in 2019 to 57% in 2020. After 2020, these fuels continue to account for relatively large shares of the fuels used in marine vessels.

EIA expects the use of liquefied natural gas (LNG) in U.S. marine bunkering to be limited in the next five years, reflecting the limited infrastructure available to accommodate LNG bunkering at U.S. ports. As infrastructure adapts, LNG’s share of U.S. bunkering grows to 7% in 2030 and to 10% in 2050.

Similar to the January Short-Term Energy Outlook (STEO) forecast, the AEO2019 Reference case projects that the U.S. refining sector will respond to the projected lower demand for high-sulfur residual fuel oils as well as increased demand for low-sulfur fuels in two ways: increasing refinery utilization and switching to lower-cost inputs.

Much of U.S. refining capacity, especially on the U.S. Gulf Coast, has downstream units that upgrade residual oils into more valuable and lower-sulfur products. These complex units can process heavier and higher-sulfur crude oils that yield large quantities of residual oils. U.S. refinery utilization increases to 96% in 2020 and remains between 90% and 92% after 2026 through 2050 in the AEO2019 Reference case as these refineries aim to convert heavy, high-sulfur crude oil and residual fuel oil into lower-sulfur fuels. This change results in both increased imports of unfinished oils and increased exports of lower-sulfur diesel and residual fuels to supply the global market.

The This Week in Petroleum article published on January 30, 2019, provides additional analysis of the market implications for refinery margins through 2050. Diesel fuel is expected to have higher refinery margins than other petroleum products such as motor gasoline and jet fuel once the IMO regulations are in effect.

Principal contributors: Corrina Ricker, Nicholas Chase, Mark Schipper, Mason Hamilton

Photo credit: U.S. Energy Information Administration
Published: 7 February, 2019

 

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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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