The Directorate General of Sea Communication (Ministry of Transport) of Indonesia, which governs the country’s shipping industry, in October issued a statement confirming its compliance with the upcoming IMO 2020 regulation.
The development builds upon an earlier communication distributed by Kementerian Energi dan Sumber Daya Mineral Republik Indonesia, also known as the Ministry of Energy and Mineral Resources of Indonesia in September.
The latest Ministry of Transport document, written in Indonesian, seen by Singapore bunker publication Manifold Times, has been translated by Albert Susilo of shipbroking, analysis and consultancy firms AE Marine Pte Ltd and Golden Bay Chartering Pte Ltd.
“In short, the document mandates the compulsory use of 0.5% sulphur limit marine fuel by all Indonesian-flagged vessels within international and domestic waters from 1 January 2020,” said Susilo, a native Indonesian.
“It says vessels are also able to use scrubbers to meet the IMO 2020 requirement. The document also states low sulphur fuel oil (LSFO) avails to be available at two locations in Indonesia, namely Tanjung Priok and Balikpapan.”
Susilo, an Analyst for the Indonesian shipping sector, notes the majority of Indonesian-flagged ships will be consuming LSFO in order to meet IMO 2020 compliance.
“We don’t think there are any Indonesian vessels installing scrubbers to meet this new requirement, unless they are newbuildings,” he says.
Susilo is confident the refinery production and storage capacities for LSFO at Tanjung Priok and Balikpapan are enough to meet domestic and international demand due to Indonesia already being an exporter for LSFO products and its components such as low sulphur waxy residue (LSWR).
However, he forecasts that Indonesia may face potential LSFO logistical distribution challenges.
“LSFO will now be produced at selected refineries, compared to HSFO which is widely available,” he explains.
“Hence, there will be a reshuffling of oil transportation tankers needed to transport LSFO from Pertamina refineries to Tanjung Priok and, sooner or later, throughout Indonesia.
“Further, refineries which previously only produced components for blending, such as LSWR, will now need to start introducing blending operations to manufacture LSFO into their operations.”
Further, he notes the limited LSFO supply points (i.e. Tanjung Priok in Jakarta and Balikpapan) could present problems for vessels trading further beyond the regions.
“The Ministry of Transport document states Tanjung Priok and Balikpapan to be the only two LSFO supply points; it doesn’t quite make sense for vessels to only bunker at these two locations due to the vastness of Indonesia,” comments Susilo.
Moving forward, vessels may be force to consume B20 product, an established sulphur-free biodiesel blend of 20% vegetable oil and 80% petroleum widely available in the local market, to meet IMO 2020 standards if shipowners are unable to procure enough compliant fuel.
“The use of B20 gasoil has already been used in shipping for auxiliary engines and by smaller vessels which main engine runs on gasoil. However, this in itself presents a slew of other issues such as filter clogging when using these types of blended biofuels. A topic for another day.”
Related: Indonesia issues statement confirming domestic IMO 2020 compliance
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Published: 22 November, 2019
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