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Sanctions Imposed by IMO Affect the Sulfur Market

In a landmark decision, both for environment and human health, January 1 2020 has been earmarked as the implementation date for a significant reduction in the sulfur content (0.50% mass/mass) of the fuel oil used in ships. What effect will this have on the current sulfur market? Will other environmental regulations also be affected by this?

Sulfur dioxide, SO2, is one of the major sources of global air pollution. The chemical results from the burning of either sulfur or materials containing sulfur. Adverse health effects of exposure to high levels of sulfur dioxide include breathing problems, respiratory illness, and many more. IMO has taken the decision to reduce global sulfur limit from 3.5% m/m to 0.50% m/m by 2020. According to IMO, up to 70,000 ships are estimated to be affected by the regulation.

 The recent IMO regulation seeks to control: -

  • Airborne emissions from ships;
  • Contribution of ships to local and global air pollution;
  • Human health issues and environmental problems.

Ships use fuel in the main and auxiliary engines and boilers. Exemptions are provided for situations involving the safety of the ship or saving life at sea, or if a ship or its equipment is damaged. Ships can also meet the requirements by installing exhaust-gas cleaning systems or scrubbers, which “clean” the emissions before they are released into the atmosphere.

How will this influence the production of sulfur?

Sulfur is recovered during refining operations (RES represents 90% of the sulfur produced, 60% of which is generated from the oil & gas refinery industry), while reducing sulfur concentration in refined products and fuel gases. Low concentration of sulfur in fuel gases is necessary to meet existing emissions standards for process heaters, boilers, and flue gases.

Now, due to the decision taken by the IMO, the demand for low-sulfur oil is likely to increase. This, in turn, means that the amount of sulfur extracted from crude oil is going to increase. Hence, the total output of sulfur will increase globally. Companies, such as BASF, have already started producing low-sulfur fuels that are friendlier to the environment.

A report by Mordor Intelligence, a market research firm, estimates a CAGR of 3.18% for the global sulfur market, estimated to reach a value of 73Article Search,261 kilo metric ton by 2022.

The main hurdles for sulfur market are— stringent environmental regulations being imposed on sulfur content in many products; low oil prices restricting the growth for sulfur (as most of the sulfur produced globally is extracted from crude oil).

 

Source: Free Articles from ArticlesFactory.com

ABOUT THE AUTHOR


Pulkit Tyagi is working as a research associate with Mordor Intelligence, a market research and consulting firm based in Hyderabad, India, with expertise in accurate research and analysis.



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