The EU refining industry and the challenge of the IMO global sulphur limit for bunker fuels

12 Mar 2018

The bunker residual fuel oil market is now facing significant changes due to regulations adopted by the IMO a year ago to reduce emissions of sulphur oxides (SOx) from the combustion of bunker fuels. The refining industry will be strongly impacted as the demand for heavy fuels will change drastically. These changes will affect the entire industry, with impacts on producers, blenders and suppliers, all of which will need to adapt in an uncertain and moving environment. According to linear programming simulations, meeting demand will be a considerable challenge for EU refiners as many technical constraints have been identified. New fuel formulations will be introduced to the market, and their stability and compatibility could potentially be problematic if the challenges are not taken seriously by each individual actor.