my country is a major producer of low-sulfur fuel oil (LSFO), and state-owned enterprises dominate the market.

​​​​​According to different sulfur content, fuel oil can be divided into four categories: high sulfur fuel oil (HSFO), ultra-low sulfur fuel oil (ULSFO), very low sulfur fuel oil (VLSFO), and low sulfur fuel oil (LSFO). Low sulfur fuel oil (LSFO) refers to fuel oil with a sulfur content limit of 1%. Low-sulfur fuel is an environmentally friendly fuel and is widely used in industrial boilers, power systems, ships and other fields.

There are three main production methods of low-sulfur fuel oil, namely high-sulfur residual oil processing method, low-sulfur residual oil and various heavy fuel oil blending methods, and low-sulfur crude oil distillation method. The blending method is widely used in the production process of low-sulfur fuel oil. It has the advantages of low operating cost, rich variety of raw materials, and low technical difficulty. my country is a major producer of low-sulfur fuel, and local companies have technological leadership. According to the “2023-2028 China Low Sulfur Fuel Oil (LSFO) Industry Market In-depth Research and Development Prospects Forecast Report released by the Industrial Research Center ” shows that my country’s total low-sulfur fuel production will reach nearly 16 million tons in 2022, a year-on-year increase of nearly 40%.

In recent years, in order to ensure the safety and controllability of the supply chain in the local market, the government has implemented export quota management for low-sulfur fuel. According to data released by the Ministry of Commerce, from January to May 2023, my country’s low-sulfur fuel export quotas will be decentralized to a total of 11 million tons, a year-on-year increase of 12.8%. It is expected that in the future, as my country’s low-sulfur fuel production capacity utilization continues to increase, its export quota management restrictions will be further relaxed.

The shipping sector is the largest demander for low-sulfur fuel, accounting for nearly 80%. Global marine fuel consumption will exceed 350 million tons in 2022, setting a record high. Marine low-sulfur fuel oil is a subdivided product of marine fuel oil. As environmental protection policies gradually take effect, the industry development is facing opportunities. Since the implementation of the 2020 Global Marine Fuel Sulfur Limit Implementation Plan formulated and released by the International Maritime Organization, the global market demand for marine low-sulfur fuel oil has continued to grow. In 2022, global marine low-sulfur fuel consumption will account for nearly 70% of total marine fuel consumption.

There are many low-sulfur fuel production enterprises in my country, and state-owned enterprises dominate the market. Zhejiang Petrochemical Co., Ltd., China National Offshore Oil Corporation, China Petroleum & Chemical Corporation, China National Petroleum Corporation, and Sinochem Group Co., Ltd. are the main producers of low-sulfur fuel in my country. Sinopec is my country’s largest producer of low-sulfur fuel oil, accounting for nearly 50% of the country’s total production capacity. In the future, as local companies continue to optimize the industrial structure layout, my country’s low-sulfur fuel industry will develop in the direction of low-cost and high-quality.

          Industry analysts said that thanks to the implementation of environmental protection policies, low-sulfur fuel, as an environmentally friendly fuel, has continued to increase its market share. Marine low-sulfur fuel oil is the mainstream product in the low-sulfur fuel market. Driven by market demand, its industry development has accelerated. my country is a major producer of low-sulfur fuel, with product quality and output ranking among the world’s leaders. In the future, with the continued efforts of local companies, the market space for low-cost, high-quality low-sulfur fuel will be further expanded.