Some of the biggest names in shipping and oil trading are looking to raise $1bn for a vehicle aimed at profiting from a clampdown on highly polluting marine fuels, pitching the investment vehicle as an insurance policy for shipowners or airlines against a spike in fuel costs. London-based Enerjen Capital, which is run by Stephen Schueler, a former top executive at shipping giant Maersk, and advised by renowned oil trader Andy Hall, plan to use the money to create a bespoke “hedging basket” designed to profit from a price spike many fear could be triggered by new International Maritime Organisation rules.
IMO 2020, as the regulations are known, comes into effect at the end of this year and is one of the biggest changes to hit the oil industry over the past decade, with the aim of cutting emissions by forcing the majority of the global shipping fleet to switch to cleaner-burning diesel or fit emissions-cleaning systems called scrubbers. For decades most ocean-going vessels have used higher sulfur bunker fuel, which is cheaper and widely available but has been blamed for rising air pollution. The Energen vehicle aims to profit from fears that the new rules, while welcomed by environmentalists, will cause a spike in demand for diesel and send prices soaring.
Maersk, the world’s biggest shipping company, has warned the sulfur cap could see its fuel bill rise by $2bn a year. Enerjen, which was founded last year by Mr Schueler and Jake Greenberg, an ex-natural resources banker at Bank of America Merrill Lynch, argued the vehicle can be used by smaller shippers, their owners and airlines to hedge against a rise in fuel costs without having to buy over-the-counter derivatives from banks and post collateral.