BY CONTINUING TO USE THIS SITE, YOU ARE AGREEING TO OUR USE OF COOKIES. REVIEW OUR
COOKIE NOTICE

Register with us today

and in less than 60 seconds continue your access to:Latest news headlinesAnalytical topics and featuresCommodities videos, podcast & blogsSample market prices & dataSpecial reportsSubscriber notes & daily commodity email alerts

Already have an account?

Log in to register

Forgot Password

Please Note: Platts Market Center subscribers can only reset passwords via the Platts Market Center

Enter your Email ID below and we will send you an email with your password.


  • Email Address* Please enter email address.

If you are a premium subscriber, we are unable to send you your password for security reasons. Please contact the Client Services team.

If you are a Platts Market Center subscriber, to reset your password go to the Platts Market Center to reset your password.

In this list
Oil

Ensuring IMO 2020 compliance will be difficult for refineries: analyst

Oil | LPG | Refined Products | Naphtha

Oil market feels impact from US oversupply of light ends

Oil

Platts Rigs and Drilling Analytical Report (RADAR)

Oil | Refined Products | Fuel Oil | Shipping | Dry Freight | Marine Fuels | Tankers

Mediterranean Bunker Fuel Conference, 8th Annual

Ensuring IMO 2020 compliance will be difficult for refineries: analyst

London — Complying with the International Maritime Organization's tighter sulfur cap from 2020 will not be straightforward for refineries to enable, Damien Valdenaire, science executive at oil industry research body Concawe, said Thursday.

Not registered?

Receive daily email alerts, subscriber notes & personalize your experience.

Register Now

With refineries needing to maximize production of compliant 0.5% fuel oil in a tight turnaround, one of the greatest difficulties they face is that their conversion units will be pushed to maximum throughput, which will in turn push up CO2 output up by as much as 4%, Valdenaire said at Petrospot's ARACON conference in Rotterdam, citing the findings of the body's LP model simulations.

Another concern for suppliers is the potential shift in trade flows, he said. Europe will need imports of middle distillate fuels to remain stable in order to have enough volume to blend product in order to produce compliant fuel, Valdenaire said.

Of all the demand for compliant fuel in 2020, 50-70% of this is expected to be for middle distillate-based compliant fuels, Valdenaire said.

Continued trade flows of high sulfur fuel oil will also be a key consideration for refineries as some volume will still be produced and refineries will need to be able to export it should the expected demand from those vessels with scrubbers remain relatively low.

Bunkering Portfolio Solutions

Platts Bunker Portfolio offers a unique mix of products, whatever your position in the bunker fuel supply chain. The combination of business intelligence you use is crucial: from breaking news to detailed market analysis, price assessments to in-depth credit reports.

More Information

While low sulfur crude oil will also help refineries produce compliant fuel -- taking some of the pressure off conversion units -- the average European crude slate is not expected to change by 2020, so this is unlikely to be a solution that refineries can greatly rely upon.

What Concawe's LP model cannot simulate is compatibility of fuels and as a result it begun an investigation along with ISO and CIMAC to test anonymous samples of compliant fuel oil from European refineries for compatibility. The results are expected to be released in six months' time.

Concluding his presentation at ARACON, Valdenaire said it is important that the industry as a whole supports "consistent and effective implementation of the sulfur cap" in order to ensure a level playing field for all.

In a presentation later Thursday at the conference, Charles Daly, chairman of Channoil Consulting, said he was concerned about future refining capacity in Europe.

Daly said if the cost of HSFO falls to the levels of coal -- as simulations shown in Valdenaire's presentation suggested -- many European refineries could close, meaning Europe becomes more dependent on Middle East refineries to meet marine fuel demand.

--Emma Kettley, emma.kettley@spglobal.com

--Edited by Jonathan Fox, jonathan.fox@spglobal.com