Page 17: of Maritime Logistics Professional Magazine (Q2 2014)

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and IMO Marpol Annex VI also obliges a reduction of the fuel sulfur limit from the current 3.5% to 0.5% by 2020 at sea; a reduction that can allow continued use of a low sulfur heavy fuel oil. That ship using low sulfur heavy fuel in turn would switch to low sulfur diesel oil or gas oil when entering the ECA. Despite those regulations being in place, we see the

IMO infl uenced by the refi neries around the world to extend ECA designations and force a move away from heavy fu- els as the diesel fuel used for land-based transport contains only 0.0010% sulfur and the refi nery path is already in place.

The cost of refi nery investments and blending modifi cations are high, mak- ing it more profi table to produce more low sulfur diesel instead of blending low sulfur HFO. We make this state- ment as many industry reports predicted a shortage of low sulfur distillates when the IMO regulations were fi rst put into place are now reporting the refi neries are more than capable of meeting the demand. 1-17 Q2 MP2014.indd 17 5/16/2014 2:49:47 PM