Techno-economic analysis of the impact of the reduction of sulphur content of residual marine fuels in Europe

Annex VI of the IMO’s MARPOL convention is coming into force in 2006 for theBaltic Sea and 2007 for the North Sea, imposing a 1.5% m/m sulphur cap onresidual marine fuel (RMF) burned in these areas. At the same time EU Directive2005/33/EC will further extend the 1.5% cap to ferries operating from and to an EUport. These provisions are subject to further review in the near future, opening thepossibility of further sulphur reductions. In this context CONCAWE undertook astudy to evaluate the impact of these measures on EU refineries and theconsequences for RMF cost. The study concludes that, faced with the prospect ofdesulphurising residual streams, refiners would have a clear incentive for fullconversion. This would push the price of low sulphur RMF well beyond the costsrelated to desulphurisation, close to the price of gasoil.