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Low sulfur marine fuel demand in Hong Kong has yet to rise, despite an incentive scheme launched in September last year encouraging use of the more environmentally friendly grade, industry sources said Thursday.

"Demand for low sulfur fuel is the same as before [the incentive scheme started in September]," said a bunker supplier based in Hong Kong.

Demand has not increased because using low sulfur fuel is not mandatory, suggested another supplier.

The Hong Kong government started a three-year incentive scheme on September 26 last year for using low sulfur marine fuel, with the maximum sulfur content below 0.5%.

This is much lower than the ISO 8217:2005 standard of a maximum sulfur content of 1.5% for marine gasoil, and this standard is widely accepted by the industry. The International Maritime Organization, however, allows the use of marine fuel oil with a maximum sulfur content of up to 3.5% except in the Emission Control Areas -- Baltic Sea, North Sea and North America.

Under the scheme, ocean going vessels calling at Hong Kong will get a 50% discount on port facilities and light dues of HK$43 ($5.55) for every 100 tons of the vessel, if they consume marine fuel with a sulfur content of less than 0.5% at the berth.

About 12% of ocean going vessels, or 839 vessels, calling in Hong Kong, applied for the incentive scheme over September-December last year, a spokesperson at the Environmental Protection Department said Thursday.

"[Emissions by] ocean going vessels while at berth accounts for about 40% of their total emissions within Hong Kong waters," said the department on its website. "The use of low sulfur fuel can substantially reduce air pollution at locations close to their berthing areas," it added.

Hong Kong sells about 500,000 mt/month of bunker fuel.