New regulations to control sulfur emissions are coming; the ship fuel market may see changes

Thread Content

“\"Green hills and plains, rivers covered in white; amidst the cries of orioles, rain falls like mist.\" These ecological landscapes that used to surround us are now merely memories from our childhood, and can only be recreated through Photoshop techniques. Instead, there are wave after wave of fog. How to deal with this fog and protect the environmental ecosystem has become a topic of intense discussion among us. I. **Policy Orientation 　This year, the strictest environmental protection laws were introduced, with focus placed on addressing issues such as vehicle exhaust and industrial wastewater and emissions. However, the marine fuel market seems to manage to avoid scrutiny, and pollution control has not been formally included on the agenda.** In fact, ship pollution is considered the third largest source of air pollution, with high sulfur content in fuels being the main cause. On December 4, in order to reduce the emission of air pollutants by ships in key areas of the country, the Ministry of Transport issued implementation plans for ship emission control zones in the Pearl River Delta, the Yangtze River Delta, and the Bohai Sea region (Beijing-Tianjin-Hebei). From January 1, 2016, to January 1, 2019, ships entering these emission control zones were required to use fuel with a sulfur content of ≤0.5% m/m. II. Analysis of the Current Situation of Ship Fuels At present, the sulfur content in marine fuel oils of 180CST and 120CST grades is kept below 2%; the higher the sulfur content, the more severe the air pollution. Even a 2% sulfur content poses a significant threat to the environment. Against the backdrop of slowing global economic growth, demand for marine fuel oil has remained weak. Refiners say that some manufacturers engage in price-cutting competition to disrupt the market, resulting in a chaotic situation in the marine fuel sector, and even leading to a situation where inferior products displace higher-quality ones. True high-quality oil is hard to sell, while many inferior oils sell well but come with numerous problems, causing significant losses for shipowners. 　　Simply replacing it with low-sulfur fuel oil carries certain risks: firstly, the flash point of low-sulfur fuel oil may be below 60°C, which increases the risk of fires on ships ； Secondly, low-sulfur fuel oil has low viscosity and poor lubricity; its viscosity can drop to as low as 1.5 CST at 40°C, which exceeds the allowable viscosity range for fuel oil components. The poor lubricity can also lead to component wear and a decline in performance ； Thirdly, low-sulfur fuel oil has a low calorific value; therefore, the combustion power per unit volume of such fuel is low. Coupled with the wear on the fuel pump, this can lead to difficulties in starting the diesel engine, thereby affecting the ship’s maneuverability. III. Countermeasures 　　With the advancement of this reform regarding ship fuel, refineries need to increase their investment in technology in order to reduce the sulfur content in fuel oil, while simultaneously improving the quality of the raw materials used in its production. Blenders of marine fuel oil can appropriately increase the proportion of low-sulfur oil; the sulfur content in such oil is usually below 0.1%. Increasing the amount of low-sulfur oil can effectively reduce the sulfur content. However, this oil has a low cetane number, and an excessive amount of it can degrade the combustion properties of the fuel oil, leading to easier stalling. This requires oil blenders to improve their blending techniques, refine the mixing ratios, and enhance various properties of the oil such as viscosity, flash point, and sulfur content in order to meet **the standards**. 　　The shipbuilding industry needs to improve shipbuilding processes and refine the switching mechanisms for ship engines, in order to minimize the damage caused to ships by switching between high-sulfur and low-sulfur fuel oils. Additionally, reserves of low-sulfur fuel oil can be increased. Some ports in Europe and the United States also have regulations regarding low sulfur emissions, and large cruise ships keep low-sulfur reserves so that they can switch back to using heavy fuel oil once they leave controlled areas. IV. Future Outlook According to Longzhong’s analysis, some large ship fuel refiners believe that this reform will have little impact on them, as it is easy to implement processes to reduce the sulfur content in fuel oil ； Some small oil suppliers who already face difficulties in selling their products may be overwhelmed by these challenges; they have excessive inventory that they struggle to dispose of, and their cash flow is tight, which makes it difficult for them to improve the quality of their fuel. 　　In terms of blending raw materials, water-based oils are inexpensive as oil blending materials and have a low sulfur content; this reform may expand the development prospects for such oils. If effectively implemented, it could perhaps drive a reshuffle in the ship fuel industry, enabling survival of the fittest and making high-quality, low-pollution fuel oils the new favorites in shipping.