A new regulation in the Mediterranean aimed at reducing pollution from shipping is set to boost diesel demand in Europe. Eugene Lindell, head of refined products at FGE, predicts a 44,000 barrels per day increase in demand for marine gasoil, a cleaner alternative to current ship fuels. The regulation will lower the sulfur content in ship fuel from 0.5% to 0.1%, leading to a shift towards cleaner marine gas oil in the region.
Despite this positive development for diesel demand, overall consumption in Europe faces challenges. Factors such as a declining car fleet share in the EU, a mild winter, and weakness in the manufacturing sector have contributed to a decrease in diesel demand this year. While the new regulation will provide some support to diesel consumption, it may not be enough to reverse the downward trend.
FGE’s forecast suggests that diesel demand in Europe is expected to continue declining, with an average drop of 30,000 barrels per day in 2025 following a decline of 140,000 barrels per day this year. The additional demand of 44,000 barrels per day in 2025 is projected for OECD Mediterranean countries and Gibraltar, driven by the increased use of 0.1% sulfur marine gasoil to comply with the new regulation.
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