New IMO policy to hit producers, cos
Shipping industry is indeed facing higher fuel prices as it must switch from the use of high sulphur fuels to those below one percent in order to meet the new international marine environment policy for fighting pollution by eliminating the use of the biggest marine polluters sulphur dioxide and nitrogen dioxide effective from next year.
This represents a new challenge for ship owners globally in order to figure out how to deal with this new policy. Their current fuels are no longer acceptable and they must reduce the fuels’ sulphur level from the current level of 3.5 percent.
Oil industries and companies are all in the same boat. They must change their refining configuration to produce the kind that meets the new regulations especially the owners and producers of medium heavy crude oils in the Gulf and other parts of the world.
Our refining industry in Kuwait is faced with this problem. We used to supply fuel of higher sulphur content to Ministry of Electricity and Water. For years, the sulphur content of the fuel we supplied was more than 4.5 percent but it reduced recently to nearly 3.5 percent.
However, it must be reduced to less than one percent. Also, we have been producing bunker fuel grades for ship owners from all over the world. Our Kuwaiti crude has high content of sulphur, and our refineries were originally built to meet the world demand for fuel oils which were used in many industries such as cement, glass, aluminum and marine fuels. However, all industries gradually began switching to gas or diesel, and perhaps electricity as well.
Shipping companies are hoping that the International Maritime Organization (IMO) may extend its deadline, as they will impose hefty prices for the new fuels, be it marine diesel or lower- sulphur fuel oil or gas, provided there is enough gas to meet the shipping industry’s global demand. Of course, any such increase in the fuel prices will affect the end consumers and other services such that everyone will end up paying their share. Now it is the turn of the shipping industry to clean up and preserve our seas and shores.
For years, they were not in line with the international regulations. Next year is not far away. All cars in the world and about 200 of the biggest tankers use fuels with high sulphur content. Reducing the sulphur content in all petroleum products is the first step towards ensuring a cleaner environment and preserving our seas from the biggest polluter.
By Kamel Al-Harami Independent Oil Analyst