IMO 2020's impact on base oils sees potentially difficult outlook for Group I

Author: Sarah Trinder

2019/02/21

LONDON (ICIS)--The International Maritime Organisation (IMO) 2020 regulations and their impact on base oils has been a topic of interest at the 23rd ICIS World Base Oils conference in London, with speakers at the conference presenting their viewpoints on the topic on Thursday.

Demand for Group I base oils from the marine industry will still remain despite the implementation of IMO 2020 low sulphur regulations at the beginning of next year, according to Sylvie Houry, ExxonMobil’s global market development manager for base stocks and specialities.

“Marine Lubricants have special requirements which will remain before and after IMO 2020. The specificity of Group I base stocks sees a lot of interest from the marine industry, and this will remain there,” Houry said.

Elsewhere, Patti Leigh, vice president, commercial strategy and support at Chevron Corporation said that IMO 2020 will test the viability of Group I plants, particularly in Europe due to the need to minimise sulphur emissions.

“Group II and Group III are advantaged as they are attached to a refining process that can remove sulphur already and benefit from access to an advantaged crude oil as well”, Leigh said.

“Group I have to compete with low sulphur diesel for feedstock and will be exposed to higher vacuum gasoil costs and potentially lower yields if a refinery switches from sour to sweet crude,” she added.

Stephen Ames, managing director at SBA Consulting is expected to speak further on the IMO 2020 regulations at the conference on Friday.