Wood Mackenzie stated that the cost of global ship fuels will increase from 2020 to 60 billion U.S. dollars in order to fully comply with the IMO limit of 0.5% for fuel sulphur.
As the IMO Sulfur Emissions Regulations are landed in 2020, shipowners must consider alternative fuels such as ULSFO, MGO, or scrubbers. sr elbow
Wood Mackenzie believes that installing scrubbers may be an economically attractive option. Despite the initial investment involved, ship owners expect an investment return of 20% to 50% given the fuel consumption costs of ULSFO and MGO.
However, the acceptance of scrubbers may be limited by many factors, including capital, scrubber manufacturing capabilities, and dry dock space. welidng overlay
Wood Mackenzie explained: "To use MGO is a more costly solution. It is fully compliant with regulations and freight rates may increase, which is about 1 US dollar per barrel." It is predicted that by 2020, the demand from the fuel market will reach 5.3 million barrels per day.
Based on the pure ULSFO refinery, the total amount of ULSFO available in 2020 will reach 1.2 million barrels per day. Further mixing ULSFO with VGO can increase this level, but VGO is a raw material used to produce other more valuable lighter oil refining products and may not be readily available.
MGO is likely to help meet the additional needs of the shipping sector. Wood Mackenzie estimates in the outlook that, in 2020, MGO demand growth will exceed 1 million barrels/day. elbow LR
"To meet this demand, we need to use more crude oil processing, especially the United States and China, to support the increase in refining profits."
Wood Mackenzie stated that depending on the required fuel supply, the location of fuel supply is also expected to change. For example, Singapore may lose some of its fuel supply market share. Because the Chinese shipowners are looking for a large number of places that meet the fuel supply requirements. glenflange
The IMO's limit on the sulphur content of ships' fuel oil will take effect on January 1, 2020, reducing the current 3.5% standard to reduce the impact of environmental pollution on human health.