Uneven distribution of suitable fuel puts regulation's requirements under the spotlight, write Rudolph Kassinger and Martin Verle.
As most people associated with the international marine business will know, Annex VI of Marpol 73/78, Regulations for the Prevention of Air Pollution from Ships was adopted in 1997 and finally ratified in 2004. The regulations will enter into force on May 19 this year.
Marpol Annex VI covers the following areas:
- ozone depleting substances;
- nitrogen oxides (NOx);
- sulphur oxides (SOx);
- volatile organic compounds (VOC);
- a reduction in maximum sulphur content in ISO 8217 RM grade fuels specifications;
- the creation of Sulphur Emission Control Areas where fuel sulphur content is 1.5% maximum;
- and several additional items of environmental concern.
To be mandatory for vessels of 400 tonnes and above in gross weight, the Marpol Annex VI regulations have been making their impact felt throughout the maritime industry, with ship operators among the most directly affected.
DNV Petroleum Services as an auxiliary player has worked closely with International Council on Combustion engines (Cimac), Intertanko as well as the International Maritime Organisation's Marine Environment Protection Committee to help the industry assess the technical and logistical implications of the new regulations.
One major requirement in Marpol Annex VI concerns sulphur content in marine fuels. It has long-term ramifications for ship operations.
To meet the new requirements, both existing vessels and newbuildings face a plethora of challenges in ensuring that their onboard fuel treatment plants can accommodate low-sulphur bunkers, particularly during the switchover from low- to high-sulphur fuel use and vice versa, when the ship enters or leaves areas with specific fuel sulphur content specifications.
Marine fuel experts have already forewarned the industry about a list of possible engine problems resulting from the prolonged consumption of low-sulphur marine fuels.
Nevertheless, there are viable solutions to overcome the known operational difficulties and ship operators can turn to their engine makers, classification societies as well as fuel-testing agencies for ready assistance.
For now, the availability of suitable low-sulphur marine fuels appears to be a more pressing issue.
Some shipping companies are in fact already 'locking in' low-sulphur fuel supplies although the first Seca will not come into effect until May 19, 2006.
A DNVPS study shows that the world average sulphur content in marine residual fuel (RM grade) was about 2.8% last year.
- The chart highlights the distribution of the deliveries by sulphur level.
In 2004, less than 6% of worldwide deliveries were equal to or less than 1.5% in fuel sulphur content. Almost 90% of worldwide deliveries contained 2% sulphur or higher, and approximately 44% of all deliveries were 3% or higher.
DNVPS findings over the past few years suggest that sulphur content in residual marine fuels generally falls in the 2%-4.5% range. On the other hand, the incidence of fuel deliveries with very high sulphur content (that is, sulphur content equal to or above 4.5%) is extremely rare, estimated at no more than two out of every 1,000 fuel deliveries. Hence, ship operators do not have to worry unduly about the revised ISO 8217 marine fuel specifications for RM grade sulphur limit.
There are, however, potential problems with the uneven geographic distribution of low-sulphur marine fuels. Only in South America is average marine fuel sulphur content equal to or less than 1.5%.
A closer look at the distribution of low-sulphur fuels further reveals that they are mainly bunkered in South America (Argentina, Brazil, Chile, Colombia and Ecuador), West Africa and Indonesia. These locations are not ideal for meeting future North European Seca requirements.
The highest average sulphur content fuels (about 3.2%) are found in Asia and the Middle East, but this is not surprising since residual fuels produced from Middle East crudes are high in sulphur content.
How then can an expanded requirement for low percentage sulphur residual fuel be met? The alternatives, all of which have been discussed in public forums, include the following:
- increased use of low- sulphur crude;
- blending of currently available low and high sulphur fuels;
- repositioning of existing low-sulphur supplies to Secas;
- residual fuel desulphurisation;
- stack scrubbing to reduce SOx;
- sulphur credits trading.
DNVPS is among those who feel that the available options are not equally viable. In the near term, the most practical solution appears to be the re-blending of high- and low-sulphur components.
For example, if all residual marine fuel supplies of 1.5% or less sulphur content (which account for about 5% of the current world total supplies) were re-blended with other fuels to exactly 1.5% sulphur, this would expand the availability of 1.5% sulphur fuels to approximately 8% of total supply.
We can somewhat further increase the availability of such low-sulphur percentage fuels by re-blending the 1.5% or lower sulphur fuel grades with those containing less than 2.8% sulphur content.
If this is possible, which we consider very unlikely, it would expand the availability of 1.5% sulphur fuel to approximately 16% of total supply.
A second blending option would be to re-blend high-sulphur residual fuel with marine gas oil.
This alternative would however require approximately equal blends of high- sulphur residual fuel and marine gas oil.
Based on the world average quality components in 2004, such blends would be very low in viscosity (less than 20 cSt @ 50*C) and also expensive.
Any option that involves extensive re-blending or refinery processing changes will almost certainly produce a marine fuel substantially different in quality than those which for the past 50 years have been the standard in the industry.
The solutions eventually adopted by the industry will be costly and therefore driven largely by economic forces.
DNVPS believes ship operators can expect tighter emission and fuel quality regulations to come.
The only uncertainties would be questions of when, where and how low fuel emission limits will become; what further specifications on fuel quality would be imposed; and how many new Secas will be spawned in the next few years.
Whatever the future requirements may be, the costs of preparing and adhering to them will be high.
Dr Rudolph Kassinger is a fuel consultant with DNV Petroleum Services. Martin Verle is station manager at the DNVPS office in Teaneck, New Jersey, US. For more information on marine fuel analysis, please email singapore@dnvps.com.