Refinery operators around the world are bracing for IMO 2020 – that is, the introduction of new marine fuel rules by the International Maritime Organization – at the end of this year. According to Srinivasalu Thangapandian, the CEO of Essar Oil UK, the policy shift will be especially hard on certain European refineries.
Thangapandian told Bloomberg in an interview published September 10 that IMO 2020, which bars most operators from using high-sulfur fuel oil (HSFO) as of January 1, 2020, poses a threat to small and relatively simple European plants. He did not single out any specific refineries but said plants that produce mostly gasoline and HSFO were under intense pressure.
“Post the shift, I believe some of these old weak refineries will have to shut down,” he commented. “Fuel oil is going to be negative, and [with] gasoline, you see margins of almost zero sometimes.”