SUBSCRIBER NOTE: Platts to publish 0.5% sulfur marine fuel assessments

S&P Global Platts will begin publishing daily cargo and barge assessments for residual marine fuels reflecting a maximum sulfur limit of 0.5% across the globe starting January 2, 2019, as well as bunker assessments for the grade from July 1, 2019.

The decision follows extensive consultation with the industry after Platts opened a formal review of its global residuals and bunker fuel assessments in February 2017. Platts first proposed the launch of these new assessments from 2019 in a subscriber note published September 26, 2017.

The launch of these assessments would come 12 months ahead of the planned introduction of new sulfur limits in marine fuels by the International Maritime Organization from January 1, 2020.

Platts has received broad support for the launch of these assessments well ahead of 2020 implementation. Feedback on the quality specification of the fuels that these assessments should reflect has been diverse.

Platts understands that all specifications of the new fuel types should adhere at least to RMG specifications for residual marine fuels, with statutory sulfur limit set at maximum of 0.5% by mass.

Platts' new assessments would reflect specifications for RMG category fuels as defined by the International Organization for Standardization in document ISO 8217:2010 Petroleum products - Fuels (class F) - Specifications of marine fuels.

Platts will begin publishing new price assessments for residual marine fuel cargoes with a maximum sulfur limit of 0.5%, for loadings in Singapore, Fujairah, and Houston, and barges in Rotterdam, starting January 2, 2019. In the absence of an active spot market, these assessments would initially reflect information on blend economics from related fuels.

Feedback received so far suggests that new 0.5% sulfur residual marine fuel blends are likely to be of relatively low viscosity compared with the prevailing fuels today, a shift that was also observed followed the implementation of 0.1% sulfur limits in certain Emission Control Areas in 2015.

Platts expects quality specifications for the new fuel types to become more clear over the next several months. Platts will continue to engage with all stakeholders and monitor for new fuel specification standards as they emerge to ensure its assessments reflect fuel grades that are most widely used.

Platts will provide timely notifications for any major changes to the assessments, including for any updates in specifications.

BACKGROUND: On October 27, 2016, the IMO confirmed its decision that it would move ahead with a proposed reduction of sulfur limits in marine fuels to 0.5% from January 1, 2020. The cap had first been proposed in 2008.

Since January 3, 2012, Platts has fully reflected revised bunker fuel specifications set out by the International Convention for the Prevention of Pollution from Ships (MARPOL) in global bunker fuel assessments. Under amendments to Annex VI of the convention, high sulfur bunker fuel supplied at major global bunkering locations from 2012 onwards must contain a maximum of 3.5% sulfur, down from the previous maximum sulfur content of 4.5%.

PLATTS ASSESSMENTS: Globally, Platts assesses 180 CST, 380 CST and 500 CST marine fuels at a range of locations on ex-wharf and delivered bases. Platts also assesses fuel oil cargoes or barges in several key locations, including Houston, Rotterdam and Singapore, with specifications that generally allow deliverability of material into the local bunker fuel markets.

In addition, Platts assesses Marine Gasoil and Marine Diesel fuels in several locations, with sulfur limits varying from 0.1% to 2% depending on the grade and location.

Platts bunker prices are published in Bunkerwire, Bunkerworld and Platts Global Alert, among others.

INDUSTRY CONSULTATION: Platts continues to seek comments and feedback on the quality and specifications for the most relevant residual and bunker fuel grades to be assessed leading up to the change in 2020.

Platts is also seeking feedback on the most appropriate way in which to reflect historic and future changes to ISO specifications.

Please send all comments, feedback and questions to oilgroup@spglobal.com and pricegroup@spglobal.com.

For written comments, please provide a clear indication if comments are not intended for publication by Platts for public viewing. Platts will consider all comments received and will make comments not marked as confidential available upon request.