As marine transportation continues to evolve, ensuring compliance with new fuel quality standards has become a crucial challenge for the industry, particularly with the introduction of ISO 8217:2024. This latest specification sets new benchmarks for fuel quality which are proving difficult for a significant portion of Very Low Sulfur Fuel Oils (VLSFOs) to meet, especially regarding viscosity limits.
The Challenge of VLSFO Viscosity Compliance
Recent findings by Integr8 Fuels, based on data from over 130 million metric tons of deliveries, indicate a critical issue: more than 45% of global VLSFO supply fails to meet the new RM380 2024 specification without modifications to blend recipes. Consequently, substantial reformulation of these fuels will be necessary. This reformulation poses risks akin to those experienced during the IMO 2020 transition, where stability and other essential parameters became problematic.
Identifying key areas where blend adjustments are most needed, the report points to regions like Singapore and Houston. In Singapore, over two-thirds of VLSFO must be reformulated to align with the new standards, compelling buyers to consider updates to charterparty wording to ensure supplier compliance and mitigate handling issues effectively.
Strategic Biofuel Blending for Compliance
One of the pivotal developments highlighted in the report is the strategic planning of biofuel bunkering to meet environmental compliance targets. The FuelEU Maritime regulation seeks to reduce greenhouse gas (GHG) intensity but does not fix a specific percentage for biofuel blending. Roughly, reducing GHG intensity by 2% requires blending 3% biofuel with VLSFO or HSFO, or 2% with MGO. Efficiently meeting these targets may necessitate larger quantities of biofuels on selected vessels while utilizing pooling for transferring compliance surpluses across fleets.
Managing biofuel strategies requires a meticulous approach, particularly to ensure GHG intensity figures are accurately reflected in Proof of Sustainability documents from suppliers. This careful management is vital to achieve compliance without compromising operational efficiency.
Sulfur Compliance Challenges in Southern Europe
Another key issue is sulfur compliance, notably in Southern Europe, where approximately 2.4% of VLSFO supplies have exceeded the 95% confidence limits for ISO 8217 Table 2 parameters over the past six months. Regions like Rotterdam and Balboa exhibit higher non-compliance risks compared to Singapore due to infrastructure constraints, such as the use of the same barges for both HSFO and VLSFO.
This situation underscores the necessity of utilizing data-driven procurement and ensuring robust supplier practices to manage compliance effectively. Enhanced due diligence in purchasing decisions, especially in regions heavily reliant on automotive diesel imports, is crucial to avoid breaches and ensure regulatory standards are met.
Biofuels and LNG: Transitional Solutions
The report also highlights the growing prominence of biofuels and LNG as transitional solutions to stringent emissions regulations. Biofuels, with increasing global blending capabilities, and LNG, known for consistent quality and low SOx emissions, are pivotal in meeting future regulatory demands like FuelEU Maritime and the forthcoming Mediterranean Emission Control Area (Med ECA).
However, the transition is not without challenges. Biofuel-related cold flow issues and the limited availability of LNG bunker vessels present operational risks. With the Med ECA set for implementation in May 2025, the increased demand for LNG bunkering is expected, yet the supply chain may face tight constraints due to slower delivery rates of LNG bunker vessels.
Conclusion
As marine transportation progresses, adhering to new fuel quality standards has emerged as a significant challenge for the industry. Specifically, the introduction of ISO 8217:2024 has set new fuel quality benchmarks. Meeting these standards poses difficulties for a substantial portion of Very Low Sulfur Fuel Oils (VLSFOs), particularly concerning viscosity limits.
The shipping industry is striving to adapt to these regulations, which aim to reduce sulfur emissions and improve fuel efficiency. Compliance requires investing in cleaner technologies and refining processes to produce higher quality fuels. The transition is costly and complex, necessitating cooperation between fuel producers, ship operators, and regulatory bodies.
Despite these challenges, the ultimate goal remains clear: to promote environmental sustainability and meet international environmental standards. The new ISO 8217:2024 specification is pushing the marine sector toward a future where ships operate more cleanly and efficiently. Maintaining fuel quality while navigating these stringent standards is essential for the continued evolution and success of marine transportation.
