IMO 2020 Happened. Is Everyone OK?
The International Maritime Organizations sulfur reduction regulation that went into effect on Jan. 1 has been described by some as the biggest change to ships since they got rid of sails and by others as the most disruptive planned event the downstream industry has ever seen.
What does it mean for fuels producers? Im not a refinery manager, but if I were, Id be throwing everything I had at the low-sulfur marine fuel streams to plug what could be a substantial short-term supply shortage of compliant fuels. How will the lubricants industry be affected? For one, marine lubricant formulators will need to balance the lack of sulfur in fuels with lower base number levels in cylinder oils.
We also kick off 2020 with news that the European Commission implemented a quota for API Group II base oil imports, slapping a 3.7 percent duty on volumes above 400,000 metric tons per year on 150 N and 600 N grades. Some producers must be rather pleased with the decision, while those not located in Europe are less so.
Meanwhile, the seemingly exponential rise of electric vehicles and e-mobility continues to throw spanners into the works of the finished lube market. 2020 is off to
a raucous start.
Happy New Year to you all!
– Simon Johns
Simon@LubesnGreases.com