When the IMO 2020 sulfur cap took effect in January 2020, vessel operators rapidly shifted toward low-sulfur fuel oil (LSFO) to comply with the new 0.5% sulfur limit. This regulation fundamentally reshaped global bunkering demand and refinery supply chains.
Bunker fuel refers to the fuels supplied to ships for propulsion, and prior to IMO 2020, high-sulfur fuel oil was the dominant marine fuel. Compliance options included switching to compliant fuels or installing exhaust gas cleaning systems, commonly known as scrubbers.
In the early stages of IMO 2020, LSFO adoption surged, particularly in Singapore, the world’s largest bunkering hub and a bellwether for global trends. LSFO sales there climbed from under 1% of total volumes in 2018 to more than 60% in 2020 as operators sought immediate compliance solutions.
Distillate fuels such as marine gasoil also saw increased usage, though to a lesser extent. Since 2020, distillate bunker demand has stabilized and typically represents between 6% and 8% of total bunker sales.
Higher fuel costs associated with LSFO accelerated investment in scrubber installations across the global fleet. Scrubber-equipped vessels are able to burn lower-cost high-sulfur fuel oil while remaining compliant with IMO emissions standards.
As scrubber adoption has increased, bunker consumption patterns have continued to shift. While LSFO remains the leading marine fuel grade, higher-sulfur fuels have regained market share, now accounting for more than one-third of global bunker volumes.
