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

Report no. 2/06: Annex VI of the IMO's MARPOL convention is coming into force in 2006 for the Baltic Sea and 2007 for the North Sea, imposing a 1.5% m/m sulphur cap on residual 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 EU port.

These provisions are subject to further review in the near future, opening the possibility of further sulphur reductions. In this context CONCAWE undertook a study to evaluate the impact of these measures on EU refineries and the consequences for RMF cost. The study concludes that, faced with the prospect of desulphurising residual streams, refiners would have a clear incentive for full conversion.

This would push the price of low sulphur RMF well beyond the costs related to desulphurisation, close to the price of gasoil.