A Comparative Study on SECA Compliance Options for Maritime Fuel Producers

Abstract

Abstract In January 2015, the Sulphur Emission Control Areas (SECA) regulations changed so that ships that ply the Baltic Sea and the North Sea can no longer use bunker fuel that exceeds 0.1 per cent v/v of sulphur. Many changes have been seen in the maritime sector, especially in the Baltic Sea region (BSR). From studies, the impact is still somewhat negative for some maritime stakeholders, such as small-scale fuel producing companies who must produce fuel that complies with the SECA requirements. The impact analysis of their compliance options shows that hydrodesulphurisation (HDS) option is the most viable option with a commensurable investment return rate, but it is highly risky and expensive considering the incessant plummeting of fuel price and the financial status of such companies. However, even though the situation looks bleak for the small-scale maritime fuel producers, a deeper probe revealed a chance for exceptional opportunities for growth and profit through a change of business model to the maritime energy-contracting model (MEC). The study zooms in on a case study of a fuel producing company and empirically compares the operating costs of the MEC model (as a decentralised option) and the HDS process (as a centralised option) to determine which option will be most economically worthwhile if adopted as a SECA compliance strategy to ensure a rounded and robust choice-making process for maritime stakeholders in such situations.