Japan’s Cosmo Oil stockpiling low sulphur fuel ahead of IMO 2020

The third largest Japanese refiner is using VLSFO produced at its residue desulphuriser unit at its Chiba refinery near Tokyo to build stocks, according to Shunichi Tanaka, president of Cosmo Oil.

“We still have some spare capacity at our residue desulphuriser so we can produce more low sulphur fuel oil to supply to the bunker market,” Tanaka told Reuters.

Cosmo Oil’s move to accumulate stocks and sell VLSFO is a response to the upcoming IMO regulation to limit bunker fuel sulphur content to a maximum of 0.5%, down from the current cap of 3.5%. The global regulation will be enforced from 1 January 2020.

Read more: Japan ready for IMO 2020 after coastal vessels trial

Ocean-going vessels, however, can also choose to retrofit scrubbers so as to continue burning the less costly high sulphur fuel oil (HSFO).

Tanaka said that out of the six oil tankers under long term charter by Cosmo Oil, half of them are fitted with scrubbers while the remaining units will use the compliant 0.5% low sulphur fuel.