Refineries in Iran Struggling to Comply With IMO Sulphur Cap

EghtesadOnline: To comply with the International Maritime Organization (IMO) new regulations for a 0.5% global sulphur cap for marine fuels, refineries are making concerted efforts to lower sulphur content in mazut production, spokesman of the Iranian Oil, Gas and Petrochemical Products Exporters' Association said.

News ID: ۷۴۸۶۷۵

09 October 2019

"Decreasing current sulphur level of 3.5% to 0.5% by January 2020 is a daunting task. Most refineries need to upgrade machinery and equipment," Hamid Hosseini was quoted as saying by ILNA.

Under the new global cap, ships will have to use marine fuels with a sulphur content of no more than 0.5% against the current limit of 3.5% in an effort to reduce the amount of sulphur oxide, particularly for populations living close to ports and coasts, he added.

According to the official, Iran's shipping fleet needs at least 2 million tons of mazut annually. Close to 15 million tons of mazut are exported to international markets every year, according to Financial Tribune.

"If we cannot meet the deadline to limit sulphur in fuel oil, it can neither be sold nor be used by the shipping industry," he noted.

Regarding alternatives to achieve a compliant fuel oil, Hosseini said as the last resort mazut can be blended with low-sulphur diesel, which is economically unfeasible.

"Several refineries including Shazand Refinery in the central city of Arak, Markazi Province are undergoing changes to either reduce mazut output or produce mazut with less sulphur," he noted, adding that ships can install exhaust gas cleaning systems, known as “scrubbers” that can help decrease sulphur content. Furthermore, ships can use engines that run on different fuels such as liquefied natural gas or biofuels.

Shazand (Imam Khomeini) Refinery receives 250,000 barrels of crude oil per day as feedstock of which 7% is converted to mazut.

Achilles’ Heel

Other refineries that earlier started to implement the ‘zero-mazut plan’ include Tehran, Isfahan and Tabriz in East Azarbaijan Province and Abadan in Khuzestan Province.

Abbas Kazemi, a former head of the National Iranian Oil Refining and Distribution Company, and other experts have warned that high mazut output from refineries is the Achilles’ heel and can substantially cut into profit margins.

According to NIORDC, Iran’s large refining capacity notwithstanding, losses of some refiners outweigh profit because they do not have access to advanced technology to convert mazut into more value-added products like gasoline.

Referring to similar problems in other countries, Hosseini said Russia, Saudi Arabia, Bahrain and the UAE have urged IMO to postpone the 0.5% limit, but it has not been accepted.

"There can be no change in the Jan. 1, 2020 implementation date, as it is too late to change the date or announce a new dateline before Jan. 1," IMO said in a statement, adding that the regulation applies to all ships whether they are in international waterways, between two or more countries or domestic shipping.

Mazut is a heavy, low quality fuel oil, used in power plants and factories. The main type of bunker oil for ships is heavy mazut, derived as a residue from crude oil distillation.

Crude oil contains sulphur which, following combustion in the engine, ends up in ship emissions. Sulphur oxide (SOx) is known to be harmful to human health, causing respiratory symptoms and lung disease. In the atmosphere, SOx can lead to acid rain, which can harm crops, forests and aquatics and contribute to acidification of the oceans.

Limiting SOx emissions from ships helps improve air quality and protects the environment.