IMO 2020:

What’s next?
Shell can
IMO 2020: what is changing?
offer a wide In 2016, the IMO announced that the effective date for the reduction of
marine fuel sulphur will be 2020. Under the new global cap, ships will
range of have to use marine fuels with a sulphur content of no more than 0.5%S
against the current limit of 3.5%S in an effort to reduce greenhouse gas
marine fuels, emissions. The Emission Control Areas (ECAs) will remain at the 2015
standard of 0.1%S content.
lubricants
and services Sulphur limit pc
5.00
to be your 4.50
4.00

partner in 3.50
3.00

providing 2.50
2.00

low sulphur 1.50

1.00

marine 0.50

transport.
05

06

07

08

09

10

11

12

13

14

15

16

17

18

19

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21

22

23

24

25
20

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20

20

20

20

20

20

20

20

20

20

20

20

20
Global ECA

Global Residual Fueloil Demand by sector Bunker Dema

What does IMO 2020 mean for ship owners? kbd
kbd
Ship owners will soon need to decide if they want to continue using high sulphur fuel oil,
12,000 6,000
in conjunction with scrubbers or exhaust gas cleaning systems; or switch to low sulphur
fuel options, including distillates; or virtually sulphur-free LNG fuel.
10,000 5,000

8,000 4,000

6,000 3,000

4,000 2,000

2,000
1,000

0 0
1990 2000 2010 2020 2030 1990 1995 2000 2005 2010 2015 202

Bunkers Transport Own Use Natural Gas RFO: HS

ResComPub Power Generation Non-Energy MFO 0.5 Gasoil/Diesel (
Industrial

“Overmbd
200 LNG powered vessels
Global Total Bunker Demand

in6 operation and on order.”

including Fishing and Domestic Barges

– LNG
5 World Shipping, March 2017

3
 Sulphur limit pc
2.50
5.00
2.00
4.50
1.50
4.00
1.00
3.50
0.50
3.00
2.50

05

06

07

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09

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25
Why it matters? 20
2.00

20

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20

20

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20

20

20

20

20

20

20

20

20

20

20

20
1.50
 Thetransition to 0.5%S
Global willECA
cause more changes to global marine industry than the switch to the 0.1%S fuel in the
1.00
ECAs. The impact of this transition represents approximately 75% of global marine fuel demand when compared to
0.50
the demand of ECA.

05

06

07

08

09

10

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19

20
Global Residual Fueloil Demand by sector Bunker Demand

20

20

20

20

20

20

20

20

20

20

20

20

20

20

20

20
kbd kbd
Global ECA
12,000 6,000

10,000 5,000
Global Residual Fueloil Demand by sector
8,000 4,000
kbd kbd

6,000 3,000
12,000 6,000
4,000 2,000
10,000 5,000
2,000
8,000 1,000 4,000
0 0
2030 6,000 3,000
1990 2000 2010 2020 1990 1995 2000 2005 2010 2015 2020 2025 2030 2035

4,000 2,000
Bunkers Transport Own Use Natural Gas RFO: HS RFO: LS
5

ResComPub Power Generation Non-Energy MFO 0.5 Gasoil/Diesel (Exd Bio Diesel)
2,000
Industrial 1,000

0 0
1990 2000 2010 2020 2030 1990 1995 2

Shell can
mbd offer
Global Total expertise
Bunker Demand and operational
Bunkers Transport Own Use Natural
and 6 including Fishing and Domestic Barges
best practices from its ULSFO 0.1%S launch.
ResComPub Power Generation Non-Energy MFO 0.
Industrial
5

 In total 3 million barrels per day (mbd) of High Sulphur Fuel mbd Global Total Bunker Demand
4
Oil (HSFO) Bunkers will need to switch to 0.5%S fuel through 6 including Fishing and Domestic Barges
blending with gasoil, plus improved logistics segregation.
 Higher production 3 costs and increased use of gasoil in the
5
0.5%S blend may effectively drive up the fuel cost. At the
same time, a lack 2
of demand for HSFO will drive down
its price. 4
 There will be a need for a larger variability in fuel quality.

Shell can help by 1 sharing expertise and operational

3
20 2025 2030 experience
2035 from the 0.1%S ECA launch to manage
this variability. 0
RFO: LS There could be key price drivers depending on the spread 2
2019 2020
(Exd Bio Diesel)
between GO-FO and LNG-oil.
 LNG fuel can help shipRFO owners
<3.5%and
S operators
RFO 1% Smeet emissions
IMO 0.5% 1
regulations, as it contains
LNGvirtually no sulphur,
RFO 0.1%and
S offers
Distillate
reduced NOx and PM emissions. Shell LNG can also help
0
reduce GHG emissions in shipping.
 Shell LNG can be a cost competitive marine fuel choice versus 2019 2020

conventional fuels. LNG can be priced off of oil markers to

RFO <3.5% S RFO 1% S IMO 0.5%
reduce risk and ensure a level playing field. LNG RFO 0.1% S Distillate
 Technology for
What is Shell doing?
 Shell is developing a variety of fuel product offerings to the the development
shipping industry that include marine gasoil (MGO) and low
sulphur fuel oil (LSFO) supply in key bunker ports; high sulphur of 0.5%S is
fuel oil (HSFO) supply for ships with on-board scrubbers; and
liquefied natural gas (LNG). similar to what
Shell is preparing for the implementation of a 0.5%S blend using


similar analysis for the 0.1%S launch. Shell used to

Shell offers a global marine bunker network, and is developing key


supply locations to serve customers who have chosen Shell LNG fuel develop 0.1%S.
as their bunkering fuel.
 Shell has lubricants designed specifically to protect engines burning

low sulphur fuels from wear and deposits.

Shell will continue to offer solutions across the spectrum including: residues, distillates and LNG at selected ports.

Ship owners will have a number of choices of how to comply

with the new Sulphur specifications

0.1/0.5%S Scrubber LNG

MGO/DMA
Fuel Oil New/Retrofit New Build/Retrofit

 Minimise operational  Convenient and  Cheaper fuel and  Proven technology

difficulty and cost widely available quick payback and reduction SOx,
 Variability of quality  Operational experience  Limited operating NOx and PM
of blends per supplier in industry experience  Lower GHG emissions

 Only a few suppliers  Higher cost  Ship stability and space  Growing availability

can offer reliable  Thermal shock and  Safe sludge handling  Cost advantage to

supply lubricity issues and disposal necessary MGO/DMA

Shell will supply MGO/DMA will Shell can supply Shell holds industry
differentiated LSFO remain key products HSFO 3.5% leadership in LNG
for Shell

LUBRICANTS FOR CROSSHEAD DIESEL ENGINES (2 STROKE)

 Alexia S3, 40*  Alexia S3  Alexia S3  Alexia 50 (70*), S6 (100*), 140*

LUBRICANTS FOR TRUNK PISTON ENGINES (4 STROKE)**

 Argina S2, S3  Gadinia S3  Mysella S3 N, S5 N  Argina S3, S4, S5
Global Shell Marine Fuels Trading Network

Vancouver Rotterdam, Antwerp

Montreal
Sarnia New York
New Orleans

Houston Freeport
Fujairah
Antigua

Singapore

Durban, Richards Bay

Buenos Aires

Global LNG Marine Bunker Network

LNG bunker location

Shell bunker location

Shell bunker location

in development
Bunker location data provided courtesy of DNV GL as of 3 April 2017 (in operation, bunker ship
loading or local storage. Tank to ship bunkering or ‘other bunker facilities’. Not including inland.)

LNG as a marine fuel is expanding globally

with bunker locations growing and
LNG fuelled ship segments broadening.
 What’s Next?
IMO 2020 regulations
Below is a timeline of critical meetings where 2020 implementation items may
be discussed.

2020 critical implementation plan meetings

MEPC 70: 2020

SUPPORTED MEPC 72 PPR6 2020 IMPLEMENTATION
MEPC 71

Jan 2017 Jan/Feb 2018 Autumn 2018 Spring 2019

Oct 2016 July 2017 Spring 2018 Jan/Feb 2019 Jan 2020

PPR5
PPR4 MEPC 73 MEPC 74

As of April 2017

Compliance
There are still many uncertainties on how ship owners and operators are
expected to comply with the 2020 regulatory framework. Shell can help
support in determining the right fuel selection for you and your organization.

2020 Critical Implementation Plan meetings

MEPC 70: 2020

SUPPORTED MEPC 72 PPR6 2020 IMPLEMENTATION
MEPC 71
Jan 2017 Jan/Feb 2018 Autumn 2018 Spring 2019

Oct 2016 July 2017 Spring 2018 Jan/Feb 2019 Jan 2020
Moving Forward
PPR5
The shipping industry must prepare for a future with lower
PPR4 MEPC 73 MEPC 74 *As of April 2017
transport emissions.

An efficient and successful transition towards cleaner marine

transport greatly depends on strong collaboration between
governments, energy companies, engine manufacturers, charterers,
fleet owners and many others.

You can count on Shell as your partner to supply marine fuels.

As a worldwide and reliable supplier of various marine fuels and
services, we can offer a complete portfolio and customised solutions. Shell LNG can help
For questions or more information please refer to our website meet current and
www.shell.com/marine future shipping
regulations.
Information as of April 2017

The companies in which Royal Dutch Shell plc directly and indirectly owns investments are separate entities. In this brochure “Shell”, “Shell group” and “Royal Dutch Shell” are sometimes used for convenience
where references are made to Royal Dutch Shell plc and its subsidiaries in general. All statements in this brochure, other than statements of historical fact are, or may be deemed to be, forward-looking statements.
Forward-looking statements are statements of future expectations that are based on management’s current expectations and assumptions and involve known and unknown risks and uncertainties that could cause
actual results, performance or events to differ materially from those expressed or implied in these statements. All forward-looking statements contained in this document are expressly qualified in their entirety by the
cautionary statements contained herein. Readers should not place undue reliance on forward-looking statements.