Stakeholders in the marine energy supply chain are grappling with a vast array of complex issues and unanswered questions as the IMO’s 2020 sulphur cap deadline approaches. In less than 11 months shipowners, operators, refiners, bunker suppliers, ports and regulators will be forced to implement preplanned strategies to demonstrate compliance.

Industry veteran Adrian Tolson, a senior partner at US consultancy 20|20 Marine Energy, offers answers to some of the most common questions that he’s encountered in advance of the upcoming TradeWinds IMO 2020 Disruption Forum below.

Q. What do you see as the greatest challenge facing shipowners as we approach the deadline for IMO 2020?

A. Understanding the impact that the regulation will have on the value and earnings of their owned assets is the biggest challenge that owners are facing at this particular moment in time. In addition, since initial decisions about scrubbers have largely made, attention is turning towards decisions about the type of low-sulphur fuel to use, and verifying that it will be available when it’s needed, where it’s needed at a reasonable price.

Q. Will refiners be able to meet demand for low-sulphur fuel?

A. Yes. On a global basis there is enough fuel­ — or there will be enough fuel­ — to meet the demand. Will it be in the right place and at the right time? This is a more difficult question to answer. It took more than half-a-century to create an (imperfect) global supply chain for marine fuel pre-2020, and it will take at least a few years to create a reliable supply chain post-2020. Refiners are only a part of the equation — it will be up the intermediary traders and suppliers to build the new structure.

Q. In terms of enforcement, what should owners and operators expect?

A. Much remains to be seen but I do expect that the IMO will provide more guidance in the months ahead. We will, ultimately, see a gradual transition from flag state to port state control. That said, the IMO has a lot of members so I don’t expect to see a perfect, uniform enforcement scheme on 1 January 2020.

Q. From an operational standpoint, what are the biggest hurdles that shipowners will need to clear?

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This article represents a collaboration between the content marketing team at NHST Global Publications, the publisher of TradeWinds, and advertisers. NHST penned the questions and 20|20 Marine Energy provided the responses.

A. Getting ships ready for the new regulations by making the requisite modifications, cleaning fuel systems, tanks etc., is going to be a headache for many operators. Learning how to operate engines with new fuels, how to prevent problems related to fuel quality and how to deal with periodic non-availability will be equally challenging. Leaning how to operate, maintain and fix scrubbers won’t be easy either, for operators that have opted to take this route.

Q. For investors sitting on the sidelines, what are the most attractive investment opportunities?

A. Look for the crude oil producers and refiners that will suffer the most damage or be the greatest beneficiary of the regulation.In the products markets, they should keep an eye out for signs that the balance between supply and demand for compliant marine fuel is not what we anticipated. On the shipping side, identify the assets that are advantaged or disadvantaged by the new regulation. In the marine fuel value chain, look for the suppliers, traders, terminal operators and small tanker operators well positioned for change.

Tolson is poised to discuss these topics, and others, at length during the TradeWinds IMO 2020 Disruption Forum in Manhattan on 21 February 2019. Other speakers include:

· Anthony Gurnee, President & CEO, Ardmore Shipping
· Gary Vogel, CEO & Director, Eagle Bulk Shipping
· Paul Pathy, President & CEO, Fednav Limited
· Shane Guidry, Chairman & CEO, Harvey Gulf International
· Ed Coll, CEO, Pangaea Logistics Solutions
· Justine Fisher, Vice President, Goldman Sachs
· Jason Breslaw, Senior Originator, BP Products North America
· Andrew Smiley, Vice President of Shipping, Koch Supply & Trading
· Erik Broekhuizen, Head of Tanker Research, Poten & Partners

The full lineup can be found HERE. You can sign up for the conference, which will convene at the New York Yacht Club on Thursday, 21 February 2019, by clicking on registration button below. Use Promo Code 2020ME to receive the early bird rate.