Russ Green

Sulphur cap deadline a tough ask for shipowners

The challenges of implementing and enforcing the IMO Sulphur cap. / By Russ Green

The International Maritime Organization’s (IMO) ruling to cap ships’ sulphur emissions to 0.5% by 2020 was applauded by environmentalists. This will reduce SO2 emissions from shipping by 85% compared with today’s levels, and save millions of lives in the coming decades. However, the challenge comes in implementing and enforcing this decision.

There are also concerns about the costs shipowners will face when switching from high to low sulphur fuel, availability of cleaner fuels, use of scrubbers, and upgrading or ordering of new vessels.

The use of technology to measure emissions could be one solution for enforcement. However, questions remain – who will pay for this and who will check that shipowners are not exploiting loopholes and switching back to heavy fuel oil (HFO). HFO currently dominates the market and has a high sulphur content. Surveillance in IMO-mandated emission control area (ECA) zones will be easier because technology to measure emissions already exists.

There are several options available for shipowners to comply with the emissions cap. They can install scrubbers, use low sulphur fuel oil (LSFO) such as marine gas oil/marine diesel oil (MGO/MDO) or new ECA fuels, or refit the vessel to use liquified natural gas (LNG).

LNG vessels are environmentally-friendly as they emit virtually no sulphur, but it may not be economically viable as switching to LNG is not cheap. Whereas for scrubbers, besides the investment and maintenance costs, there are other not-so-obvious problems such as loss of cargo room when fitting the system into a ship.

LSFOs have their issues too. There may be operational problems when using such fuels in engines that are optimised for HFO use, especially when the engine is running for a long period. It is up to the shipowners to look at the advantages and disadvantages of the different systems.

Switching from HFO to LSFOs such as Gas Oil will mean extra costs for shipowners, which can mean there is 50-60% difference in the cost of the two oils and this can add up to between US$10,000-$20,000 to bunker costs per voyage.

“In 2020, the entire world will be an Emission Control Area, so there are no cheap options left,” said BIMCO’s chief shipping analyst.

One of the key issues for ships using LSFOs is the distribution of such fuels. It seems many ports will not be able to deliver these fuels in satisfactory amounts by 2020. The International Bunker Industry Association (IBIA) has warned that many ports and countries will not be able to replace the current supply level of HFO with LSFO in time, resulting in the need to import bunker fuel from distant refineries.

Sulphur emission is a health scourge, and the move towards a cap of 0.5% is welcome, but it seems unlikely that all ships would comply with the ruling by 1 January 2020.

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