As of Jan. 1, 2020, the International Maritime Organization (IMO) will begin enforcing a new regulation that caps the allowable sulfur content of all marine fuels from its current level of 3.5% mass/mass (m/m) to 0.5% m/m. While this new limit will not change the lower limits in existing sulfur Emission Control Areas (ECAs), it will inevitably have wide-ranging implications on oil refiners and the shipping industry, as well as force significant changes in the demands for certain bunker fuels.
As a result, demand for the widely used 3.5% m/m high-sulfur fuel oil (HSFO) is expected to drop as shipowners seek alternatives to power their vessels. There has been global debate about IMO 2020 being delayed or phased in but as of now there has been no indication of any delay in the scheduled implementation. As if to underscore their position, in October 2018, the IMO adopted an additional ban on ships even carrying high-sulfur marine fuels starting in March of 2020 unless they have the required equipment on board to use them.
Globally, marine vessels account for about 4% of global oil demand and are a critical part of the global economy, moving more than 80% of global trade by volume and more than 70% by value.