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The Global Bunker Fuel Market is estimated to be valued at US$ 28.84 Bn or Mn in 2023 and is expected to exhibit a CAGR of 7.1% over the forecast period 2023 to 2030, as highlighted in a new report published by Coherent Market Insights.
Market Overview:
Bunker fuel or bunker oil is a type of fuel oil used aboard ships. It is typically used in ship bunkers to power large cargo ships, tankers, and bulk carriers. Bunker fuel provides the advantage of being very cost-effective for ships and is commonly used to power their main engines and electric generators.
Market key trends:
In order to reduce emissions, there has been a growing shift toward use of low sulfur bunker fuel. In 2020, International Maritime Organization introduced regulations to limit sulfur content in marine fuels to 0.5% globally. This has led many shipping companies and fuel suppliers to introduce very low sulfur fuel oil (VLSFO) and ultra-low sulfur fuel oil (ULSFO) variants. Over the forecast period, stringent IMO regulations regarding sulfur emissions from ships are expected to drive greater demand for compliant low sulfur bunker fuels. Many ports are also introducing emission control areas where fuel sulfur content cannot exceed 0.1%, further boosting sales of low sulfur bunker fuels.
SWOT Analysis
Strength: Bunker fuel has high energy density and is cost effective making it an affordable option for ships. It requires less volume compared to other fuels enabling ships to carry more cargo and earn higher revenue.
Weakness: Bunker fuel is one of the dirtiest burning fossil fuels and emission from ships significantly contribute to air pollution. It releases particulate matter, nitrogen oxides and sulfur oxides which cause health and environmental issues.
Opportunity: Strict emission regulations by IMO are pushing shipping companies to adopt alternatives like LNG and demand for cleaner compliant fuel is growing. Development of scrubber technology also provides an opportunity to reduce sulfur emissions and comply with sulfur cap regulations.
Threats: Alternative low sulfur fuels are increasingly available which can replace bunker fuel. Carbon taxes on marine fuels are being considered which will increase operating costs for ships. Developing nations and emerging economies with growing trade also pose competition in the shipping industry.
Key Takeaways
The Global Bunker Fuel Market Size is expected to witness high growth, exhibiting CAGR of 7.1% over the forecast period, due to increasing seaborne trade and transportation of goods globally. Asia Pacific region accounts for more than 50% of total bunker fuel demand led by China, Singapore and Japan. The region is expected to continue dominating the bunker fuel market over the coming years.
Regional analysis
Asia Pacific dominates the global bunker fuels market with China being the largest consumer of bunker fuels accounting for about 20% of global demand.Other major bunker hubs in Asia Pacific are Singapore and Japan. North West Europe is the second largest regional market led by demand from Germany, Netherlands and Belgium. Stringent emission norms are driving adoption of compliant fuels in regions like Europe and North America.
Key players operating in the Bunker Fuel Market are Chemoil Energy Limited, Aegean Marine Petroleum Network, Inc., World Fuel Services Corporation, Gulf Agency Company Ltd., Gazpromneft Marine Bunker LLC, BP Marine Ltd., Exxon Mobil Corporation, Royal Dutch Shell plc, Bunker Holding A/S, and Lukoil-Bunker LLC. The key players are focused on expanding supply and offering a wide range of marine fuels to support evolving regulatory framework.
*Note:
1. Source: Coherent Market Insights, Public sources, Desk research
2. We have leveraged AI tools to mine information and compile it
