IMO’s 2020 Implementation for Sulfur Cap on Fuel Remains Firm

Posted November 2, 2018
Category Company News
The International Maritime Organization’s Marine Environment Protection Committee (MEPC) declined to postpone implementation of a cap on sulfur emissions for ships at its meeting this week.

The IMO requirement that takes effect on Jan. 1, 2020 will reduce the sulfur content permitted in ships’ fuel oil globally to just 0.5 percent or require ships burning fuel with higher sulfur content to be equipped with scrubbers to remove sulfur from ship exhaust.

Last week the MEPC also adopted a measure prohibiting vessels without scrubbers from carrying fuel containing more than 0.5 percent sulfur for use on board. This requirement will take effect on March 1, 2020. It said that ban on the carriage of fuel will “give governments an additional tool to ensure a level playing field.”

The International Bunker Industry Association said, “We sympathize with the fears of developing countries, the least-developed countries and small island developing states that higher transport cost may have a negative impact on their economies. Industry planning and preparations are already well under way with substantial investments being made both in the refinery sector and among shipowners to meet the 2020 deadline. If we move the target now, those preparations will be thrown into disarray.”
   
To alleviate the fears of some shipowners that there could be “insufficient availability of good-quality compliant fuels”, the IMO is allowing shipowners to use the standardized fuel oil non-availability report when ships encounter genuine non-availability situations in line with Regulation 18.2 of MARPOL Annex VI to prove that they were unable to obtain compliant fuel.

The World Shipping Council, which represents the container shipping industry, has been a supporter of IMO rules to address vessel air emissions. But in an interview with American Shipper, John Butler, the group’s president and CEO, cautioned the regulation will create “a magnitude of cost that’s going to be quite noticeable in the supply chain” and “the most expensive regulation that the international shipping industry has ever seen.”

The Organization for Economic Cooperation and Development (OECD) has said, “The 2020 requirements could add annual total costs in the order of $5 billion to $30 billion for the container shipping industry.” Poulsson said, “In view of the enormity of this major change it’s likely there’ll be some teething problems immediately before and after January 1, 2020.
 
Already there are parts of the world, including the coastline of most of the U.S. and Canada, Caribbean, Baltic Sea and English Channel, where even lower cap on the sulfur content of fuel — 0.1 percent applies. The IMO said Friday there is now discussion of setting up a similar Sulphur Emission Control Area (SECA) in the Mediterranean Sea.

“According to a recent study by the IMO’s marine pollution response center in the Mediterranean, further reducing the sulfur content of marine fuels used in the Mediterranean would bear considerable costs,” said the IMO. “However, the significant health and environmental benefits, including fewer cases of respiratory diseases and premature being deaths avoided annually resulting from improved air quality, generated by a Mediterranean SECA, could outweigh the overall costs.”

One thing is clear, while the environment will benefit from the sulfur cap and the quality of life will improve, ultimately, consumers will bear the burden.  (Source: American Shipper)
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