An American President Lines Ltd. (APL) cargo ship sails past the Singapore Petroleum Co. (SPC) oil refinery in Singapore, Photographer: SeongJoon Cho/Bloomberg © Bloomberg
Stricter national regulations on pollution from motor oil and shipping fuel are reshaping Asia’s refined fuel markets, traditionally the dumping ground for high-sulphur fuels.
Trade in fuel oil, once the mainstay of Singapore’s homegrown, family-owned oil traders, is drying up ahead of a worldwide moratorium on the worst-polluting bunker fuels used by the shipping industry. The benchmark diesel contract traded in the region has already been adjusted to a higher standard, reflecting the global impact of stricter fuel standards in Europe and China.
The shifts under way in Asia demonstrate the ability of tighter standards in large consuming markets to affect the products sold in smaller, poorer markets, thus reducing air pollution that doesn’t respect national boundaries.
Platts, the pricing service that sets benchmarks for much of the physical oil trade in Asia and the Middle East, last month tightened its standards for gasoil or diesel to 10 parts per million of sulphur, from 500 ppm. “This makes the Asian benchmark essentially the same as Europe or the US. It’s easier to trade and arbitrage,” said Jonty Rushforth, Platts’ director for Asia and Middle East oil markets.
While international climate change negotiations have focused on carbon emissions, sulphur pumped from power plants, automobiles and ships also contributes to the premature deaths from air pollution, and damages crops and forests when it returns to earth in the form of acid rain. Years of tightening motor fuel regulations in developed countries, and more recently in China, have been aimed at limiting the amount of sulphur spewed into the air when cars are driven.
Stricter domestic standards meant that one-half to three-quarters of the diesel exported from China was already predominantly 10 ppm sulphur, Mr Rushforth said. And while African standards were much more lax, automotive fuels in east Africa were already largely 50 ppm, thanks to that region’s reliance on supply from sophisticated refineries in India and the Middle East. “We have an Indian Ocean market that’s essentially ultra-low sulphur diesel,” he said. Only Indonesia remains a significant market for relatively high-sulphur middle distillates.
A potentially bigger victory for the environment will come with the International Maritime Organisation’s planned phase-out by 2020 of high-sulphur fuel oil for the shipping industry, which traditionally consumed the cheap and viscous product left over after higher value gasoline, jet fuel and diesel are refined from crude oil. Fuel oil is also burnt by power plants but the bunker fuel market based out of Singapore has traditionally been the sink for fuel that can’t find a home elsewhere.
China’s independent “teapot” refineries have a complex configuration that allows them to digest any unwanted fuel oil remaining in the Asian market as demand from shippers and power plants drops.
The overall supply of bunker fuel is shrinking thanks to large new refineries in India and the Middle East that no longer produce residuals. “It’s a dying market,” said one long-time Singapore oil trader.
Additional reporting by Jeevan Vasagar in Singapore
Twitter: @HornbyLucy
http://ift.tt/2dMlRLV
Tidak ada komentar:
Posting Komentar