Comprehensive Guide to Marine Fuels: MGO, HSO, LSFO, ULSFO, Sulphur Cap, 180cSt & 380cSt

A Comprehensive Guide to Marine Fuels: MGO, HSO, LSFO, ULSFO, Sulphur Cap, 180cSt & 380cSt

Marine fuel is primarily categorized into two types:

--- distillate fuels (diesel)

--- residual fuels (fuel oil).

These are further subdivided based on sulphur content, viscosity, and application, heavily influenced by international regulations such as the "Sulphur Cap". The following analysis breaks down the classification, characteristics, applications, and market trends.

1. Distillate Fuels (Diesel)

Definition & Classification

Commonly known as diesel, these are divided into MGO (Marine Gas Oil) and MDO (Marine Diesel Oil).

MGO (Marine Gas Oil): With the lowest viscosity, MGO is suitable for high-speed diesel engines. Its sulphur content is ≤0.1% m/m, making it ideal for specific emission control areas (ECAs), port operations, or auxiliary machinery.

MDO (Marine Diesel Oil): Possessing higher viscosity than MGO, it is used in medium-speed diesel engines, typically in special operational zones. However, due to converging prices with MGO (Clarkson database ceased MDO price updates post-2012), MGO is often used directly in actual operations.

Applications

Primarily used for main engine maneuvering (entering/leaving port, narrow channels, bad weather), auxiliary engines, and boiler startups. Its advantages include rapid ignition and clean emissions, though the cost is relatively high.

2. Residual Fuels (Fuel Oil)

Definition & Classification

Commonly referred to as IFO (Intermediate Fuel Oil) or HFO (Heavy Fuel Oil), this is a mixture of cracked residue and straight-run residue. It is characterized by high viscosity and high non-hydrocarbon content.

By Sulphur Content:

HSFO (High Sulphur Fuel Oil): Sulphur content ≥3.5% m/m (some up to 4.5% m/m). It is the cheapest option but highly polluting.

LSFO/VLSFO (Low/Very Low Sulphur Fuel Oil): Sulphur content ≤0.5% m/m, compliant with the global sulphur cap regulation.

ULSFO (Ultra-Low Sulphur Fuel Oil): Sulphur content ≤0.1% m/m, matching the sulphur grade of MGO with a similar price point.

By Viscosity:

120cSt, 180cSt, 380cSt: Higher numbers indicate higher viscosity.

380cSt: The market mainstream. It has high viscosity (operating temperature 130℃～145℃) and lower cost but poor fluidity.

180cSt: Lower viscosity (operating temperature 110℃～120℃), better fluidity, and causes less engine wear, though it is slightly more expensive.

Note: There is no 380cSt low-sulphur heavy fuel oil globally. Low-sulphur and ultra-low-sulphur heavy fuels are 180cSt or below.

Applications

Residual fuels are mainly used as fuel for main engines during ocean voyages due to their low cost. However, they require heating to reduce viscosity, and high-sulphur variants require scrubbers or a switch to low-sulphur fuel to meet regulations.

3. The Sulphur Cap & Industry Response

International Regulations

Global Sulphur Cap (Effective 2020): Limits marine fuel sulphur content to ≤0.5% m/m globally, or ≤0.1% m/m in Emission Control Areas (ECAs).

Carriage Ban: Ships without scrubbers are prohibited from carrying fuel with sulphur content >0.5% m/m.

Compliance Strategies

Using Low-Sulphur Fuels/MGO: Directly switching to LSFO/VLSFO or MGO. However, the price difference between high and low-sulphur fuels is approximately $ 150/ton, significantly increasing long-term operational costs in ECAs.

Installing Scrubbers: Allows continued use of HSFO. With an initial investment of about $ 1 million (Chinese manufacturers), the cost can be recovered within a year. However, this comes with maintenance costs and restrictions on washwater discharge (some countries ban open-loop scrubber discharge).

Switching to Alternative Fuels: LNG, methanol, and ammonia can solve emission issues entirely. However, limited supply chains and high costs remain challenges, currently adopted only by dual-fuel vessels.

4. Market & Price Trends

Major Bunkering Hubs

The world's four major marine fuel markets are:

Asia: Singapore, China, Korea, Japan

Europe: ARA (Amsterdam, Rotterdam, Antwerp)

Mediterranean: Fujairah

US East Coast

(Note: Singapore is the world's largest consumption hub)

Price Comparison (Singapore Example)

MGO/ULSFO: ≤0.1% Sulphur, highest price (～ $ 773/ton).

LSFO/VLSFO: ≤0.5% Sulphur, mid-price (～ $ 628/ton).

HSFO: ≤3.5% Sulphur, lowest price (～ $ 490/ton).

Price Spread Impact: When the price gap was small in 2020, scrubber installation was less attractive. With the current widening spread, the economic viability of scrubbers is prominent.

5. Conclusion & Outlook

Short Term: Given the large price disparity between high and low-sulphur fuels, installing scrubbers or using LSFO has become the mainstream choice.

Long Term: With stricter decarbonization regulations, LNG and green fuels (methanol, ammonia) will gradually replace traditional fuels, pending solutions for supply chain and cost issues.

Industry Recommendation: Shipowners should select fuel strategies flexibly based on routes, vessel types, and policies, while keeping an eye on scrubber technology upgrades and new fuel developments.

Engineering vessels operating in coastal waters—such as Cutter Suction Dredgers (CSDs), Trailing Suction Hopper Dredgers (TSHDs), Grab/Clamshell Dredgers, Backhoe Dredgers, Split Hopper Barges, Floating Cranes, and Piling Barges... etc , —are typically prohibited from using higher-polluting fuel oils like MDO (Marine Diesel Oil), IFO (Intermediate Fuel Oil), or HFO (Heavy Fuel Oil).

This restriction is due to their operational proximity to ports, urban areas, and environmentally sensitive zones. Instead, these vessels generally use Chinese Grade 0 diesel, which corresponds to Marine Gas Oil (MGO) with a sulfur content of ≤0.1% m/m, complying with domestic emission control requirements.