assessment of fuel oil availability - · pdf file• overall objective: • to conduct...
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Assessment of Fuel Oil
Availability (stakeholder
consultation)
EGCSA Annual Meeting, 25 February 2016
World leading research of the UCL Energy Institute
Shipping Team combined with the advisory and
management system expertise of MATRANS.
Consultancy clients (IMO, Shell, INTERTANKO, EBRD, RBSA, IEA)
Research grants (RCUK, EU, ECF, ETI)
Independent contracting
• Context of the study
• Aim of the study
• Methodology and sources
• Projections of scrubber use
• Project planning
Outline
3 25 February 2016
• MEPC 58 amended MARPOL Annex VI, Regulation 14.
• The sulphur content of any fuel oil used on board ships outside ECAs
shall not exceed the following limits (14.1):
• 3.50 % m/m from 2012
• 0.50 % m/m from 2020
– Regulation 4 specifies that these limits can also be achieved by
alternative compliance methods that are ‘at least as effective in
terms of emissions reductions’
– Regulation 14.8 specifies that the 0.50 % limit shall be subject to a
review to be completed in 2018, taking into account
• the global market supply and demand for compliant fuel;
• trends in fuel oil markets; and
• any other relevant issue.
Context of the Study
4 25 February 2016
• MEPC 68 agreed on Terms of Reference for the Review of the Availability
of Compliant Fuel
• Based on MEPC 68/3/3 and MEPC 68/INF.11
• The study should provide appropriate information contracting State
Parties to MARPOL Annex VI
Context of the Study
5 25 February 2016
• Overall objective:
• to conduct an assessment of the availability of fuel oil with a sulphur
content of 0.50% m/m or less by 2020.
• Specific objectives:
• Develop quantitative estimates of the demand for fuel oil meeting
the global 0.50% m/m sulphur limit, both globally and for different
world regions
• Assess the ability of the refinery industry to supply the projected
demand
• Compare the demand and supply scenarios to assess their implications
with respect to the availability of compliant fuels.
• Report the findings of the analysis to the Steering Committee.
Aim of the study
6 25 February 2016
Overview of marine fuel demand
Aim of the Study
7 25 February 2016
IFO 0.5% S Fuel LNG 0.1% S Fuel IFO Non-marine fuel
LNG
Total marine fuel demand
Non-ECA ECA / EU
Non-marine fuel demand
EGCS EGCS
Methodology and sources
8
2012 maritime fuel demand
(3rd IMO GHG Study)
2012 production maritime fuels
(refineries, inter-refinery transports, crude oil)
2012 production other fuels
(refineries, inter-refinery transports, crude oil)
2012 refinery configuration
(refineries, inter-refinery transports, crude oil)
2020 maritime fuel demand
(base, high, low) 2020 maritime fuel supply
(base, high, low)
• ∆ Activity
• ∆ Exhaust gas
cleaning systems
• ∆ Regulations
• ∆ Alternative fuels
• ∆ Production
methods
• ∆ Refining capacity
• ∆ Crude oil slate
Assessment (supply of fuels, alternative
compliance options)
Completed /
In progress
Next steps
• 2012 supply and demand
• Third IMO Greenhouse Gas Study
• IMO reports on sulphur content
• Stratas data on non-marine fuel use (IEA, EIA, OPEC, OGJ)
• 2020 marine demand
• Third IMO Greenhouse Gas Study
• Updated analysis on scrubber installations
• Updated analysis on use of non-petroleum fuels
• 2020 fuel supply
• Stratas on the basis of (IEA, EIA, OPEC, OGJ)
Methodology and sources
9 25 February 2016
• Projections of scrubber use based on
• Literature review (completed)
• Stakeholder in-depth interviews (completed)
• Stakeholder internet survey (almost completed)
Projections of scrubber use
10 12 January 2016
CAPEX
OPEX
Hybrid, new USD 2.3 mln + 44*PME(kW)
USD 1.3k +
0.6*PME(kW) + 0.5%
fuel
Hybrid, retrofit USD 2.9 mln + 58*PME(kW)
USD 1.3k +
0.6*PME(kW) + 0.5%
fuel
Open, new USD 1.8 mln + 37*PME(kW)
USD 1.3k +
0.4*PME(kW) + 1% fuel
Open, retrofit USD 2.3 mln + 55*PME(kW)
USD 1.3k +
0.4*PME(kW) + 1% fuel
Projections of scrubber use
11 12 January 2016
• At a fuel price difference of USD 100, scrubbers are generally cost-
effective for ships with more than 20 MW installed power (figure 3)
Projections of scrubber use
12 12 January 2016
Help request…
13 25 February 2016
• Regulatory constraints
• Uncertainty about washwater discharges in ports and estuaries
• Technical and operational constraints
• Available space on some existing ships and some container ships
• Availability
• Scrubbers are widely available and can be installed during regular
drydockings
• Other constraints
• Split incentives
• Financial constraints
Projections of scrubber use
14 12 January 2016
• Preliminary analysis shows that the most important constraints are:
• Availability of repair yards
• Regulatory uncertainty
• Scrubbers that can operate partly in no-discharge mode will
become more attractive
• Preliminary estimates: at a fuel price difference of USD 100 per metric
tonne, 2000 – 5000 ships may be equipped with scrubbers annually from
2018 onwards (providing a decision is made to maintain 2020 date)
Projections of scrubber use
15 12 January 2016
• Project started October 2015
• 2012 fuel demand and supply completed December 2015
• 2020 demand projections completed March 2016 (input after 1st April
cannot be used)
• Delivery final report May 2016
Project planning
16 25 February 2016
Thank you for your attention!
Jasper Faber and Tristan Smith
[email protected], [email protected]
17 25 February 2016