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IMO 2020 Regulation: Standards, Compliance and Outlook for Marine Fuels

Regulatory Impacts of IMO 2020

IMO 2020 compliance requires a massive change that will demand rapid adjustments across the global fuel supply chain to comply with the 1 January 2020 deadline. The landmark decision by the International Maritime Organization already has begun to exact far-reaching consequences on shipping company operating costs, global freight rates, shipping economics, scrubber demand, accelerated ship scrappage and more.

Our goal is providing energy and marine professionals, as well as investment, equity and trading leaders, with the information and decision-making support they need to minimize risks, disruptions and potential costs and facing their organizations during this market readjustment.

To help our customers navigate the route to reach new IMO 2020 standards, IHS Markit has compiled an IMO 2020 Resource Center, here where you can find up-to-date data, issue analysis, consultation opportunities, forecasts and other resources you need without delay. Our in-depth research and sensitivity analysis includes six probabilistic alternative scenarios showcased in our recent multiclient study, Navigating Choppy Waters – Multiclient study on marine bunker fuel in a low sulfur, low carbon world.

We invite you to bookmark this page and check back regularly for our latest research, forecasts and thought leadership on the IMO sulfur cap and the outlook for marine fuels.

Are you ready for the 0.5% sulfur spec for bunker fuel?

IHS Markit can help you address IMO 2020 regulatory requirements

Transition considerations

Understand how storage of high-sulfur fuel oil might address some oversupply during transition period, including role of market timing structure and flat price risk in estimating the suitability of this option.

Fleet planning

Discover alternative ship owner strategies for achieving the bunker fuel rules.

Scrubber strategies

Download the most current data on ship scrubber technology, availability, cost and timing of installation and scrubbing economics and installation payback derived from our scenario analysis. Find information on open and closed scrubber technology.

Regulatory framework

Explore current global legislation and potential future legislation (and possible delays). Evaluate the compliance outlook, including waivers, LS Bunker available and other sanction relief mechanisms being considered.

Supply/demand forecasts

Anticipate the influence of IMO 2020 regulations on crude oil quality and production, including detailed supply/demand forecasts.

Lubricant market forecasts

Determine potential impact of VGO tightening on global lubricant market and the bunker fuel market.

Alternatives technologies

Learn about refinery blending components for the new formulations of bunker fuel and their potential compatibility, handling and other fit-for-use issues.

Beyond 2020

Get a high-level review of the recent CO2 emission reduction targets, set by the IMO for 2030 and 2050, known available methods for compliance, and influence on ship owner strategies for the 2020 low sulfur bunker fuel transition.

Our insight to support your decisions

What is the International Marine Organization (IMO) regulation?

With a 1 January 2020 compliance deadline, the International Marine Organization (IMO) 2020 regulation has set more stringent global regulatory limits on sulfur in fuel oil used onboard ships to be 0.50% m/m (mass by mass) for ships operating outside designated Emission Control Areas (against the current limit of 3.50%, which has been in effect since 1 January 2012). The change is called IMO 2020.

The intent of the regulation is to provide environmental and health benefits for ports and nearby coastal areas by progressively decreasing emissions produced by heavy bunker fuels, referred to by the IMO as “Sulphur Oxides (SOx) and particulate matter (PM).”

The changes will touch businesses of all sizes, including oil refiners, storage providers, energy traders, financial institutions, shipping companies, governments and port authorities, utility and LNG companies, crude oil producers, equipment and chemical suppliers in methanol, propylene, and chlor-alkali, inclusive of multinational, national, local and/or independent companies.

The IMO a specialized agency within the United Nations charged with the safety and security of shipping and the prevention of marine pollution by ships. The IMO has stated that the new global limit “will not change the limits in SOx Emission Control Areas (ECAS) established by IMO, which since 1 January 2015 has been 0.10% m/m. The ECAs established under MARPOL Annex VI for SOx are: the Baltic Sea area; the North Sea area; the North American area (covering designated coastal areas off the United States and Canada); and the United States Caribbean Sea area (around Puerto Rico and the United States Virgin Islands).”

News Releases

12 February 2019 Refining and Shipping Industries Brace for New Fuel Regulations That Could Raise Prices on Everything from Fuels to Consumer Goods - Even Cruise Ship Tickets
23 January 2019 Global Energy Expert and Pulitzer Prize-Winning Author Daniel Yergin Will Deliver Keynote Remarks at the TPM 2019
8 June 2018 IMO Signals a Strong Determination to Enforce Stricter Global Marine Sulfur Regulations, Leaving Shippers and Refiners Scrambling to Finally Respond
28 August 2017 New Low-Sulfur Requirements for Marine Bunker Fuels Causing Scramble for Refiners and Shippers

Experts

Spencer Welch

Director - Oil Markets & Downstream, Energy, IHS Markit

Kurt Barrow

Vice President – Oil Markets, Midstream, Downstream & Chemical, IHS Markit

Dr. Victor Shum

Vice President, Energy Consulting, Asia Pacific, IHS Markit

Hedi Grati

Consulting Director, Oil, Midstream, Downstream, and Chemical, IHS Markit

Dalibor Gogic

Principal Analyst, Maritime & Trade, IHS Markit

Krispen Atkinson

Consulting Principal , IHS Markit
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