South Korean oil refiner Hyundai Oilbank Co. has launched a new very low sulfur fuel oil (VLSFO) brand to make headway in cleaner marine fuel market under tougher international environmental regulations and secure new growth beyond the traditional fuel.

Hyundai Oilbank will sell VLSFO product, which contains less than 0.5 percent sulfur, under the brand name of “Hyundai Star,” the company said Thursday. For the product, the refiner applied its original technology to remove asphaltene, a substance that undermines the stability of the oil compound and the vessel’s fuel economy. Hyundai Oilbank is the first refiner in the world to sell a VLSFO with a brand name, claimed the company.

The Korean refiner currently operates VLSFO manufacturing facility in Seosan, Korea, with a maximum daily refining capacity of 50,000 barrels. It is the only refiner in Korea that has a facility exclusively used for producing VLSFOs.

The company has been producing high-quality VLSFO products to meet the growing global demand for cleaner vessel fuel, said a Hyundai Oilbank official. Under the new guidelines from the International Maritime Organization, the limit for sulfur in fuel oil used on ships will be capped to 0.5 percent from current 3.5 percent, starting next month.

The company expects low-sulfur fuel addition will compensate for weakening refining business due to global economic slowdown and rapid expansion of electric vehicles. According to Korea National Oil Corp., the country’s gasoline and diesel consumption is expected to gain slightly over 2 percent this year, improving from 0.7 percent fall last year but nevertheless halved from the average annual growth of 4.2 percent marked from 2013 until 2017.

VLSFO is also much more profitable compared to regular vessel fuel oil. As of early December, the price of low sulfur oil with less than 0.5 percent sulfur averaged $560 per ton, which is about 70 percent higher compared to regular vessel fuel oil.

Industry experts forecast the low-sulfur oil to bring over 100 billion won ($84.2 million) in operating profit to the refiner every year.

Other Korean refiners are also moving aggressively into the clean fuel market. SK Innovation will start the operation of its new refining facility that it invested 1 trillion won to produce up to 40,000 barrels of low-sulfur oil daily early next year. GS Caltex will sell low-sulfur oil, which it previously used as fuel for factory operation, as fuel oil. S-Oil is ramping up the desulfurization facility in Korea.

By Won Ho-sup and Cho Jeehyun

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