Container Vessels Migration to 500 CST Bunker Fuel

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By: J. Dilip Kumar --

29 June, 2015

Container Vessels Migration to 500 CST Bunker Fuel
ARTICLE

In 2015, ocean liners travelling through designated Emission Control Areas (ECA) to use bunker fuel with sulfur content of 0.1% or less, it's a drastic change in regulation from an existing sulfur emission limit of 1% sulfur content in bunker fuel used by the container vessels. Emission Control Areas (ECA) will begin enforcement of sulfur emission regulation in Baltic Sea, English Channel, North Sea, and 200 nautical miles off of U.S. and Canadian coasts. Ocean liners can comply with IMO regulation in two ways:

  • First is switching to low-sulfur marine gas and second option is installing a scrubber in the vessel to reduce the sulfur emission. In the first option since the low-sulfur marine fuel is highly filtered and can cost 50-100% higher than regular bunker fuel (IFO380/180).
  • Second is installing a scrubber to reduce the sulfur emission, by burning the high sulfur content fuel and scrub it to reduce the sulfur emission.

  At the moment, biggest challenge for ocean liners are higher cost involved in the installation of the scrubber and existing contracts with �no low-sulfur surcharge' clauses in the agreement. As a result, ocean liners in order to make up for the one time installation cost and revenue deficit because of low-sulfur emission charges paid in ECAs; liners are slowly switching to 500CST bunker fuel which is relatively low cost fuel compared to IFO (380/180) that would result in offsetting the fuel cost in the total cost of operating a container liner vessel. In this article we will focus on the cost of switching to 500CST bunker fuel. And also elaborate on the benefits for shippers and along with the risk of moving to the 500 CST bunker fuel from the existing bunker fuel.   Author: J. Dilip Kumar




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