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LSFO still leading shipping fuel in NWE, but LNG gaining ground: execs
2nd December 2021 13:58 GMT

 

Low sulfur fuel oil is still the most common bunker fuel for ships in Northwest Europe but LNG is gaining traction as an alternative, shipping executives said Dec. 2.

 

LSFO with 0.5% sulfur -- often referred to as very low sulfur fuel oil, or VLSFO -- is predominant in NWE while high sulfur fuel oil is also available, Nellos Filopoulos, director of Mediterranean and Black Sea at Propeller Fuels Greece, told the Mediterranean Bunker Fuel Virtual Conference organized by S&P Global Platts.

While LNG is available, “it’s very expensive” and requires infrastructure, said Nikolaos Liapis, supply and operations director at Elinoil.

Filopouos added: “In the Mediterranean – eastern Mediterranean more particularly – there is no infrastructure yet. It’s very vital.”

Since the International Maritime Organization imposed a 0.5% sulfur limit on most marine fuel on Jan. 1, 2020, LSFO with a maximum 0.5% sulfur now represents 73.73% of the 320 million mt of ship fuel used annually, according to Unni Einemo, director and IMO representative for the International Bunker Industry Association, citing an IMO study. LNG's share is 4.4% and HSFO 11.11%. In 2018, HSFO of at least 2.5% sulfur had a 64.28% share, she noted.

New ship builds are most likely to have scrubbers, allowing for use of cheaper high sulfur fuel oil, because scrubber prices have come down since 2018-19 and the payback is “pretty quick,” Rustin Edwards, head of fuel oil procurement at shipping company Euronav, said. Euronav is also retrofitting some older ships with scrubbers, which are priced at about $1 million each, he said. Biodiesel will likely be a popular alternative fuel in the early years of the transition to low-carbon fuels, he said.


Platts ,
2nd December 2021 13:58 GMT