The Yangshan Free Trade Zone in the Lin-gang Special Area in Shanghai has been encouraged to provide services related to the blending of high and low sulfur fuel oil, according to the recently released policy by the State Council to advance the high-level institutional opening-up of the Shanghai FTZ.

The global annual consumption of marine fuel oil is more than 300 million metric tons, but the annual bonded marine fuel oil refueling volume of Shanghai Port, the world's largest container handling port, is only three million tons, much less than Singapore, which has an annual refueling volume of nearly 50 million tons. This is because Singapore is a global distribution center of ship fuel resources and their price is lower than Shanghai.

The new policy will help the zone improve competitiveness in international ship refueling business.

The demands for low sulphur fuel oil have been increasing in recent years as the International Maritime Organization had in 2020 set a standard which states the sulfur proportion of marine fuel oil must be less than 0.5 percent. Based on advanced refining technology, the sulfur proportion of domestic product is about 0.3 percent and the price is lower than imported low sulphur fuel oil.

"If we blend the high and low sulphur fuel oil, the product will still meet the international standard, but the cost will decrease by 3 to 5 percent," said Bai Jinsheng, general manager of Shanghai Chimbusco Marine Bunker Co Ltd.

Huang Yue, officer from the Lin-gang Special Area Administration, also explained that they had already contacted enterprises to speed up the implementation of the policy to improve the zone's competitiveness in marine fuel oil price.

The Yangshan Free Trade Zone in the Lin-gang Special Area is located in East China's Shanghai. [Photo/VCG]