News
08/05/25
HSFO defies the green tide
HSFO defies the green tide
New York, 8 May (Argus) — High-sulphur fuel oil (HSFO), once seen as a fading
relic, is proving remarkably resilient (see table) despite the maritime sector's
push toward decarbonization. The fuel remains economically attractive thanks to
persistent scrubber investments and regulatory frameworks that fail to fully
penalize its use. Under the EU notation, HSFO and very low-sulphur fuel oil
(VLSFO) are assigned the same calorific and greenhouse gas emission values. This
equivalence means that ships fitted with scrubbers — systems that strip out
sulphur oxides — face no additional penalties for choosing HSFO over VLSFO. As a
result, greenhouse gas fees under FuelEU Maritime and the EU emissions trading
system (ETS) offer no disincentive for scrubber users to stick with cheaper
HSFO. In March 2025, the VLSFO-HSFO spread in Singapore narrowed to just $44/t,
the lowest since the IMO 2020 sulphur cap took effect. At that level, a scrubber
on a capesize bulker pays for itself in under two years. When the spread
averaged $122/t in 2024, the payback period was about eight months. Even in
regulated markets like Europe, economics favor HSFO. Under the EU ETS, ships
operating in, out of or between EU ports must pay for 70pc of their CO2
emissions in 2025. In Rotterdam, bunker prices including ETS surcharges still
favor HSFO: $575/t for HSFO, $605/t for VLSFO, and $783/t for a B30 Used cooking
oil methyl ester blend. While biofuels, methanol and LNG are inching forward in
market share, they remain cost-prohibitive. In the meantime, HSFO, with scrubber
backing, continues to punch above its environmental weight. By Stefka Wechsler
Selected ports marine fuel demand t % Chg 1Q 25-1Q 24 1Q 2025 less 1Q 2024 1Q
2025 1Q 2024 Singapore HSFO 1.0% 33,160.0 4,898,372.0 4,865,212.0 VLSFO/ULSFO
-13.0% -1,005,951.0 6,829,667.0 7,835,618.0 MGO/MDO -5.0% -49,012.0 907,874.0
956,886.0 biofuel blends 187.0% 237,552.0 364,418.0 126,866.0 LNG 34.0% 25,935.0
101,856.0 75,921.0 Rotterdam HSFO 1.0% 11,169.0 829,197.0 818,028.0 VLSFO/ULSFO
14.0% 118,670.0 976,249.0 857,579.0 MGO/MDO 3.0% 9,662.0 393,071.0 383,409.0
biofuel blends -60.0% -158,597.0 104,037.0 262,634.0 LNG 7.0% 7.0 104.0 97.0
Panama HSFO 22.0% 65,266.0 362,388.0 297,122.0 VLSFO/ULSFO 25.0% 177,296.0
878,776.0 701,480.0 MGO/MDO 22.0% 27,097.0 150,980.0 123,883.0 — Maritime and
Port Authority of Singapore, Rotterdam Port Authority and Panama Canal Authority
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