Bunker fuel is one of the key enablers for global trade as it powers the ships that carry over 90% of world trade. Often called heavy fuel oil or residual fuel oil, bunker fuel is a dense viscosity oil that remains after the distillation and cracking process in oil refineries. It is primarily used by ocean-going vessels for their main and auxiliary engines. However, bunker fuel is also one of the ‘dirtiest’ fossil fuels owing to its large carbon and pollutant footprint. With growing awareness about climate change, environmental regulations on bunker fuel are being tightened across the world.
Composition and Quality of Bunker Fuel
Bunker fuel is typically composed of various residues from crude oil distillation including heavy volatile oils along with asphaltenes and heavy metals. Its high viscosity and density make it an ideal fuel for ship engines where power and fuel storage are more important than emissions. However, its poor quality also makes it heavily polluting. Bunker fuel contains higher sulfur, particulate matter and nitrogen oxides compared to other fuels. It can contain up to 3.5% sulfur, which is nearly 35 times higher than diesel fuel allowed for road vehicles in many countries. The International Maritime Organization (IMO) has progressively lowered the cap on sulfur content in bunker fuel in a phased manner.
Coherent Market Insights examines what bunker fuel is, how it impacts the environment, regulations on emissions, and alternative fuel options in Bunker Fuel Market.
Emissions from Bunker Fuel Use
The usage of high-sulfur bunker fuel by ships leads to significant air pollution. When burned, it emits large amounts of sulfur and nitrogen oxides, particulate matter and soot which are known health and environmental hazards. Sulfur oxides emitted can travel thousands of kilometers, returning to earth as acid rain that can damage forests, crops and aquatic life. Particulate matter which includes black carbon is a major contributor to global warming and also impairsvisibility and health. Overall, it is estimated that ship emissions account for 15-30% of global sulfur oxide emissions and 5-15% particulate matter and nitrogen oxide emissions. The environmental effects are most acute in coastal regions and port cities with heavy shipping traffic.
Regulations to Cut Emissions
In view of the adverse impacts, the IMO has introduced a global 0.50% sulfur cap on bunker fuel which came into effect on January 1, 2020 under the International Convention for the Prevention of Pollution from Ships (MARPOL). This represented an over 80% cut from the previous 3.50% sulfur limit. The new norms are bringing cleaner bunker fuels into wider use. Further, special emission control areas with even stricter 0.10% sulfur limits have been designated along coastlines. The EU and China also have their own emissions policies for vessels. However, ensuring compliance remains a challenge. Some ship operators attempt to circumvent rules by using illegal bunker fuel mixtures. Port state control regimes are being strengthened worldwide to check malpractices.
Alternative Fuels and Technologies
While low-sulfur fuel oil remains dominant bunker fuel, alternative marine fuels are gaining wider acceptance to slash emission levels. Liquefied natural gas (LNG) as a marine fuel has significant environmental advantages over oil and pilot LNG-fuelled vessels have emerged. Biofuels produced from waste oils and agricultural residues offer another low-carbon option. Ammonia is also emerging as a zero-carbon fuel if produced from non-fossil sources. Hybrid and battery-electric ship prototypes indicate emission-free designs are viable. Further, scrubbers that remove sulfur from exhaust streams let ships still use high-sulfur bunker fuel within emission limits. Overall, a mix of cleaner fuels, emission abatement devices and new designs promise cleaner shipping in the long run.
For more details on the outlook of the global bunker fuel market, please refer to the report published by Coherent Market Insights. The report provides in-depth analysis of various factors such as drivers, restraints, opportunities and industry-specific challenges that influence the growth of this market. It also discusses the prominent trends in key regions and countries. While some regions are witnessing positive growth, certain factors might impede the demand in other areas. The report analyses various micro and macro factors responsible for the current and future scenario of this market.
In summary, bunker fuel has been a workhorse for global seaborne trade. However, its heavy emissions also exert toll on environment and public health. With tightened regulations and efforts towards decarbonizing shipping, cleaner bunker fuels and new marine technologies are gaining ground. While the transition presents technical and financial challenges, a gradual shift seems inevitable for sustainable development and protection of oceans and coastal communities. Adoption of stringent but practical emission control strategies holds the key to curbing pollution from marine vessels.