IMO sulphur monitoring data analysis shows increase in average residual fuel sulphur content, product stem sizes down in 2016

The yearly average sulphur content of tested residual fuel oils increased to 2.58% in 2016, up by 0.13% from 2.45% in 2015, according to data provided to the International Maritime Organization (IMO) from four providers of sampling and testing services.

Of the 143,141 samples tested, 0.53% exceeded the current 3.50% sulphur limit applying outside emission control areas (ECAs). The share of samples testing at or below 0.50% sulphur, meanwhile, was 1.81%.

The sulphur distribution showed that 3.25% of the samples tested in the 0.50% to 1.00% sulphur range, 3.86% tested in the 1.00% to 1.50% sulphur range and 7.57% tested in the 1.50% to 2.00% sulphur range.

The test data suggest that supply of residual fuel meeting the upcoming 0.50% sulphur limit without significant blending is very limited.

The vast majority of the residual fuel oil samples tested between 2.00% and 3.50% sulphur, with 20.83% testing in the 2.00% to 2.50% sulphur range, 29.91% testing in the 2.50% to 3.00% sulphur range and 32.23% testing in the 3.00% to 3.50% sulphur range.

The 143,141 samples tested were taken from a total of 123,171,609 tonnes (123 million) of residual fuel oil supplied for use on board ships, giving an average stem size of 860 tonnes. Both the quantity and number of samples tested in 2016 was higher than in 2015, when the sulphur average was based on 131,160 test results taken from 114,344,642 tonnes of residual fuel oil supplied to ships, however the average stem size in 2015 was higher at 872 tonnes.

Surprisingly, there was no increase in the global average sulphur content of residual fuel oils in 2015, when the global annual average dropped by 0.01% to 2.45%. An increase in the average sulphur content had been anticipated in 2015 as the ECA sulphur limit fell from 1.00% to just 0.10%, meaning most ships switched from low sulphur residual fuel oil blends used to comply with the ECA previously to mainly distillate fuels. Some residual fuel products entered the market in 2015 that met the 0.10% sulphur limit.

As for distillate fuels, data provided to IMO showed no change in the sulphur average from 2015, holding at 0.08%. The share of tested distillate fuels meeting the 0.10% sulphur ECA limit was 93.71%, while 0.82% of the samples tested exceeded 0.50% sulphur.

Already in 2013, 80% of all distillate samples tested met a 0.10% sulphur limit, rising to 83% of all distillate samples tested in 2015. The high share of distillates meeting a 0.10% sulphur limit was most likely due to the requirement for ships in the European Union to use fuels with no more than 0.10% sulphur while at berth, in force since 2010.

The total number of distillate samples tested was up from 62,555 in 2015 to 71,901 samples in 2016. However, the corresponding quantity of distillate fuel was down from 11,387,079 tonnes (11 million) in 2015 to 11,362,954 tonnes, meaning the average distillate stem size in 2016 was 158 tonnes, compared to 182 tonnes in 2015.

The number of distillate fuel samples tested and the corresponding quantity jumped in 2015 compared to 2014, when the number of samples tested was 37,973 taken from 4,144,945 tonnes of deliveries to ships, with an average stem size of 109 tonnes.

Main takeaways:

There is very little residual fuel oil that would meet a 0.50% sulphur limit without significant blending.
The vast majority of tested distillate fuels meet a 0.10% sulphur limit and have done so since before the 2015 drop in the ECA limit.
Tested quantity of distillate fuels has more than doubled from around 4 million tonnes in 2014 to around 11 million tonnes in 2015 and 2016.
The number of distillate samples tested has increased from around 38,000 in 2014 to almost 72,000 in 2016.
The test data indicate a reduction in average stem sizes for both residual fuel oil and distillate fuels in 2016, to 860 tonnes and 158 tonnes, respectively.

Report by Unni Einemo: unni@ibia.net