(Laura Blewitt – Bloomberg)
Even as the owners of ships carrying everything from bananas to oil spend billions of dollars to meet tighter clean-air rules, demand to buy the dirtiest fuel will still hold out in some parts of the world.
In two and a half years, the International Maritime Organization will slash by 86 percent the amount of sulfur allowed in the fuel burned by the world’s cargo ships and oil tankers as they sail around the globe. Meeting the new standards will cost the world shipping industry $60 billion a year, according to consultant Wood Mackenzie Ltd.
The IMO’s new standards that require ships to use fuel with 0.5 percent sulfur or less – versus the current 3.5 percent – as of Jan. 1, 2020 should reduce heavy fuel demand by 2.3 million barrels a day, according to industry consultant FGE. Changing fuels completely across the world will be difficult, as refiners will need to build units such as cokers. More than two-thirds of residual fuel use is in developing countries, according to International Energy Agency data. Click here to read more.