With most owners operating under tight cashflow conditions due to high bunker fuel bills and low charter rates, the push by the industry to go “green” is only putting extra pressure on bottomlines. “Nobody can afford to buy low-sulphur fuels now,” Wistoft said bluntly at the Sea Asia 2013 held in Singapore today.
At present, distillates with 0.10% sulphur content cost $300-400 per metric tonne more than the 3.50% high-sulphur 380 cst grade. The 1.00% low-sulphur fuel grade is approximately $120 per metric tonne higher compared to the 3.50% high-sulphur product.
The IMO is looking to impose low-sulphur rules on bunker fuel following the global 3.50% sulphur content cap on bunker fuels since 1 January 2012. A far stricter global low-sulphur limit of 0.50% will be implemented by 2020 or 2025, depending on a review in 2018.
The nearer future will see a sulphur content limit of 0.10% by 2015 in designated emission control areas (ECAs), where the Baltic Sea and North Sea as part of the ECAs are already abiding by a maximum sulphur content of 1.00% since 1 July 2011.
Due to the impracticalities of imposing the regulations during this period of time, Wistoft believed that efforts by the IMO to “green” the shipping industry have been untimely. He opined that if the series of low-sulphur rules were imposed five years ago before the worldwide shipping slump, the financial impact on owners would have been softer.
He added: “The latest favourite is of course those eco-ships. They are just a marketing tool by shipyards to sell ships with bigger engines and propellers.”
Apart from prices presenting a challenge to the global use of low-sulphur fuels, the availability of the product is another question mark. But in Singapore, the world's largest bunkering port, availability of low-sulphur fuels is not anticipated to be an issue, according to Patrick Phoon, president of the Singapore Shipping Association (SSA) and deputy managing director of Evergreen Shipping Agency (Singapore).
Phoon affirmed that Singapore will always be one step ahead of the game whether in terms of supplying low-sulphur fuels or even LNG bunkering infrastructure, which is expected to be incorporated as part of the country's first LNG terminal project currently underway.
The availability of low-sulphur fuels in Singapore is made through oil majors and Petrobras, Brazil's national oil firm.
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