A new marine regulation from the International Maritime Organization (IMO) comes into force in January 2020. The regulation will require to lower the sulphur limit for marine fuels from the existing 3.5% (set in 2012) to 0.5% by weight.
Although this has already been mentioned in 2008 and reaffirmed in 2016, it is still very much unclear how the market participants will respond and act on it.
According to F+L Magazine: Marine transportation accounts for 4% of global oil demand. Nonetheless, it is a cornerstone of the global economy; 30% of global trade flows from post to port and accounts for 70% of trade value.
The current situation is rather complex because at the moment, there is no single compliance method. Fuel requirements of ocean-going marine vessels vary widely depending on the approach employed by individual operators.
All this results in many refineries being uncertain on how they will manage to optimise their output and produce the volumes of sulphur-compliant fuel that are required.
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