After years of preparation in the shipping industry, low-sulfur fuel has emerged as the dominant option for complying with the International Maritime Organizations stringent new global emissions regulation, which went into effect the first of this month.
The new marine pollution rules have lowered the sulfur cap on marine fuel oil from 3.5 percent to 0.5 percent mass by mass. The rule is intended to achieve major health and environmental benefits globally.
In a survey of 16 marine shipping companies operating a total of 1,783 vessels, The Strategy Works found that 87 percent of operators plan to predominantly use LSFO in their vessels, including marine gas oil. Three operators will use liquid natural gas in some ships, but those account for just 17 vessels or 1 percent of the total fleet operated by those surveyed.
Now that the shipping industrys approach to compliance is clearer, marine lubricant producers can ramp up efforts to formulate oils that will keep LSFO-burning engines in tip-top shape. While marine gas oil has been used for five years in emission control areas requiring fuels with 0.1 percent sulfur or less, use of 0.5 percent LSFO is relatively new.
The only serious challenger to low-sulfur fuels has been scrubbers. November 2019 data from risk management consultancy DNV GL shows 3,755 scrubbers installed or booked for 2020 delivery, which is higher than anticipated just 18 months ago. This has been driven by two factors:
Concerns exist over the compatibility of blended LSFO from different origins-the co-mingled properties of bunker fuels of aromatic and paraffinic compositions. This has encouraged some shipping companies to test scrubbers on part of their fleet. Cruise companies, notably Carnival and Royal Caribbean, have been the main operators to prioritize retrofitting their ships with scrubbers over switching to LSFO.
The fourth quarter of 2018 through the second quarter of 2019 saw a surge in scrubber sales as shipping companies, predicting a price gap between LSFO and high-sulfur fuel oil of somewhere between $150 and $200 per ton, viewed the economics of scrubbers as compelling. According to Argus Media, the price gap had reached $262.50 in November (see graph on Page 26)-up to then its highest point-endorsing those earlier commercial decisions.
But in the third and fourth quarter of 2019, demand for scrubbers began to wane, primarily because shipyard capacity was too full to install them by January 2020. Some people invested rather late, then when they made their decision, the capacity wasnt there, said Graham Calder, senior technical manager at Gulf Oil Marine.
The price gap between the fuels widened more at the end of 2019. If this gap extends into 2020 and shipyard retrofitting capacity is restored, another boost to scrubber sales may be kick-started early this year. Others may wait and see if the differential holds up. By mid-2020, if it seems to have stabilized, that could trigger fresh decisions.
Chinas new emission control areas-mirroring those already in place in United States and Caribbean coastal areas and the North and Baltic seas-are also affecting market behavior. Part of the China Air Pollution Prevention and Control Law, port incentives to reduce to 0.1 percent sulfur fuels have been extended from the Bohai Sea and Yangtze and Pearl River deltas to encompass all Chinese port areas and river basins.
To toughen up compliance, an international carriage ban for HSFO begins March 1. Ships can still carry HSFO as cargo, but will not be permitted to have HSFO in fuel tanks unless scrubbers are being used. This is expected to significantly discourage non-compliance in international waters and strengthen the powers of Port State Control (which allows inspection of foreign-registered ships) to detain ships carrying non-compliant fuel, reports DNV GL on its website.
The challenge the shipping industry faces now is a range of 0.5 percent sulfur fuel oils, which will differ depending on which part of the world the ship is sailing and what crude slate a refinery is using.
To prepare for January 2020, additive company Lubrizol tested several 0.5 percent sulfur fuels available in China, alongside blends created in their own laboratories. The tests confirmed some concerns about stability and variability of fuel characteristics in 0.5 percent fuel blends. They also confirmed that BN 40 marine engine oil is the most appropriate base number for use with 0.5 percent sulfur fuels.
Joseph Star, aviation and marine offer advisor with ExxonMobil, agrees: I hear the same concerns when I speak to ship owners and operators about compatibility and stability issues.
Cleanliness Takes Precedence
With less sulfur from fuel to neutralize, marine engine oils are likely to have a high enough BN-a measurement of alkalinity-for compliant vessels. BN is not the issue anymore; it is the cleanliness, said Calder.
Lubricants for low-sulfur fuel blends will require a higher level of cleaning or deposit handling capability than traditional BN 40 lubricants, which have mainly been used with distillate fuels that do not have the deposit-forming potential of residual fuels-let alone residual fuels that may be less stable.
Most detergents also have high alkalinity, which can make it challenging to blend a lubricant with low BN and high deposit handling capability. Lubricant companies can address this by using dispersants in balance with detergents. Dispersants have been proven in several applications, but the balance and type of additives used must achieve acceptable engine cleanliness with 0.5 percent sulfur fuels.
Logically, the less sulfur you have in the fuel, the lower the base number you need to neutralize it, said Star. But reduced BN doesnt always have to mean reduced detergency. Typically, the additives that help with the BN and acid neutralization inherently have some detergency. However, you can formulate low-BN lubricants with additional detergency.
Reducing the BN by simply adjusting the over-based detergents without rebalancing the formulation with additional deposit control additives will severely affect the lubricants ability to keep the engine clean, warned Harriet Brice, technical manager with Lubrizol. She stressed that adjusting BN alone is not the solution for low-sulfur fuels.
Star agreed. BN is just one part of the formulation of a lubricant. You have to have other pieces in there to make sure the performance is optimal and that the keep-clean properties are appropriate for the oils application.
Marco Corradi, marine lubricants portfolio manager with Infineum, sees a toolkit of options going forward. You might wish to reformulate with different detergent systems, mixing high, medium and low base to find a performance solution.
Different types of dispersant chemistries could be added to the formulation for cleaning and keeping deposits in solution. Or, you can utilize ashless soap type chemistries, top treating your detergent chemistry with neat surfactant, bringing additional cleaning power with no additional base-creating a variety of paths to follow, Corradi elaborated.
Regarding reformulation, Calder sees a precedent with the lube formulations already established in ECAs, where MGO is commonly burned. ECA oils were not diluted down versions of the main grades. They were rebuilt from the beginning, because BN was not seen as so relevant anymore. You need some of it, but the relevance is about lubricity and cleanliness in engine operation, and thats the driver, he added.
Some formulators are borrowing from other sectors of the industry, according to Star. We see lots of the technology that we already have for on- and off-highway applications come over into the marine sector, and that obviously isnt centered on base numbers.
For example, weve seen some fairly substantial extended drain intervals [in marine applications] with some of our Mobil Delvac heavy-duty diesel engine oils, which are directly taken from our off-highway portfolio.
Lubricant manufacturers regard the change to 0.1 percent fuels-usually MGO-in China as the least troublesome to implement because of the five years of experience in previously established emission control areas where the same requirements have been in place since 2015. Those lubes are expected to transition into China and other markets without any problem.
Lubricant analysis is critical in the early months of the transition period. I really cant over-stress the requirement for everyone to be able to monitor the condition of their cylinder and engine oils on-board, especially during the transition to a low-sulfur future, said Star.
Sara Lawrence, global technical manager of Shell Marine, cautioned that there is no quick solution if compatibility problems with new fuels and lubricants emerge. The biggest challenge remains that the approval process for new lubricants requires a field trial, ranging from 1,000 to 4,000 hours, she said. In order to decrease the time needed to get new products to market, an alternative approval mechanism would be needed.
Both Shell and ExxonMobil offer lubricant monitoring services.
The key parameters that have consistently been monitored in the used oil analysis are iron and BN, Lawrence continued. For two-stroke engines, a significant increase in iron … or BN could indicate a potential problem. For four-stroke engines, viscosity increase could also indicate that the oil needs to be sweetened or replaced.
Sustainability and reducing greenhouse gas emissions will continue to be a challenge for shipping. Although shipping only creates something like 3.5 percent of global climate change emissions, it is under the microscope due to air quality in port areas. It is a hot topic, said Calder.
As a variety of new alternative fuels enter the market, understanding their combustion characteristics and what challenges they may bring to engine condition will be key to effectively formulating cylinder lubricants to suit multiple new shipping industry requirements.
Michael Herson is managing director of London-based The Strategy Works, a strategy consultancy specializing in original insight on a global basis within the lubricants, shipping and other business-to-business sectors. Contact him at firstname.lastname@example.org.