International Maritime Organization (IMO) standards take effect Jan. 1 that cap the sulphur content of shipping fuel at 0.5% unless vessels use exhaust-cleaning scrubbers. The mandate aims to improve human health by reducing air pollution from sea-going vessels.
Overall, supplies of the cleaner-burning fuel will be available at the start of the year, said panelists at a Mare Forum USA conference. However, shortages in some places force vessels to detour to ports with ample supplies, said Maria Burns, a supply chain specialist. She said any diversions would be costly for fuel sellers and ship owners.
Only about 6%, or 3,000, of the world's 55,000 ocean-going vessels are expected to have scrubbers installed by 2020, far less than originally expected, said Burns, an assistant professor at the University of Houston. Global marine fuel oil consumption could reach 5 million barrels a day (bpd) by 2020 and rise to 8 million bpd by 2040, she added.
Compounding supply issues, global refiners have not been able to guarantee the quality and compatibility of the shipping fuels they supply, said Sean Kline, a director at industry group Chamber of Shipping of America.
"If something is keeping us up at night, it's the quality and compatibility of the fuels. You can get a different blend with different components at the same port. If they get bad fuel, they have to deal with it onboard," Kline said.
"Basically, if you can't get the low-sulphur fuel, be transparent about it" with the U.S. Coast Guard, he said to an audience of marine executives.
(Reporting by Collin Eaton in Houston; editing by Grant McCool)