The impending shift from 3.5 to 0.5% maximum sulphur specifications for marine bunker fuels means that refiners must conduct a thorough evaluation of their conversion and desulphurisation capacity. Many will need to add costly new units to their configurations. What are the technology options and how do they compare?
One of the most profound investment issues facing refiners is the so-called bunker fuels challenge, which will tighten the global cap on the maximum sulphur content of marine fuel oil from 3.5 to 0.5% (Figure 1). The International Maritime Organization recently clarified the timeline for this shift: having considered delaying the new specification until 2025, the organisation decided in October 2016 to impose it at the earliest opportunity: January 2020.
With the introduction of the 0.5% sulphur limit, it will only be possible for ships to continue using marine fuel oil with 3.5% sulphur if they are fitted with on-board scrubbers. It is not clear how many ships will invest in this technology but there could be a large reduction in demand for 3.5%-sulphur marine fuel oil, with a corresponding increase in demand for 0.5%-sulphur marine fuel oil.
In addition, there appears to be limited likelihood of other sectors, such as onshore power generation, taking up the slack for 3.5%-sulphur marine fuel oil.
Adapting to changes in product specifications, market demand and emissions regulations is nothing new for refiners, but this is an unprecedented shift and most refiners will struggle to produce sufficient niche low-sulphur blend stock to make 0.5%-sulphur marine fuel oil. Although some refiners are already tooling up by planning or implementing residue conversion projects that will reduce their exposure to the fuel oil market and increase their competitiveness, few have taken the decision to invest in structurally moving away from making high-sulphur marine bunker fuel.
There is a wide range of residue conversion technologies for refiners to consider and they should base their decision on their specific circumstances, so, in this article, we review some of the leading technology choices.