Abstract
Fuel oil is an important derivative of crude oil used mainly in marine transport and power generation. The environmental impact of this important energy vector continues to be a major challenge due to its high sulphur and carbon content. In this work, we analyse the impact of sulphur cap and CO2 price on the inter-competition between fuel oil and alternative low-sulphur low-carbon fuels. It was found that the increase in crude oil prices enhances the cost-effectiveness of using middle distillates compared to using fuel oil with scrubbing systems. In addition, we found that imposing a CO2 price between $50-150/TonCO(2) leads to reducing the emissions from fuel oil combustion by up to 87 per cent by 2040. In comparison with previous literature, we show that fuel oil will represent at least 56 per cent by 2030, under the low oil price scenario, if scrubbing systems are implemented in the shipping industry.