By Nick Arthur
In a decision that has huge ramifications for the global shipping fleet, the IMO’s Marine Environment Protection Committee (MEPC) has confirmed that a global 0.5% sulphur cap for marine fuel will enter force on 1 January 2020.
In practice this will mean that within the next 26 months only ships using abatement – or scrubber – technology will be able to burn heavy fuel oil (HFO) – the fuel of choice for the shipping industry for over 60 years. It is expected that a majority of ships that don’t install scrubbers will use a low sulphur blend of distillates (marine diesel oil or marine gasoil) and HFO. Alternatives, initially taken up on a smaller scale, will include LNG, methanol, battery power and biofuels – all of which will likely make a growing contribution to vessel propulsion beyond 2020.
The CE Delft ‘Fuel Availability” study commissioned by the IMO, and used as the basis for the 2020 ‘global cap” stated that there are likely to be some market impacts and logistical challenges. Nevertheless, a majority of those addressing the MEPC meeting in late October accepted the verdict of the report’s recommendations: that the existing technical challenges were not significant enough to delay implementation beyond 2020.
Shipping is currently enduring historically challenging conditions, and this change will inevitably bring additional complexity to the market. Nevertheless, with the Delft report citing a further 200,000 premature deaths if the decision were delayed to 2025, the IMO’s decision should be commended and has provided the industry with the much-needed clarity it had asked for.
For shipping’s environmental record, the decision is profound. For the industry, which has been much maligned for its environmental record, it will be able to reflect on the fact that as of 2020 its contribution to the world’s air pollution will fall from an estimated 5% to 1.5% and will save millions of lives in the coming decades.
For a number of our clients the decision represents a seminal moment and, for many, an opportunity. For organisations involved in the marine fuel supply chain, the challenge now is to deliver quality bunker fuel that meets new sulphur specifications without interruption to the supply chain. Those offering fuel-efficiency solutions will be examining the implications for the payback period on their technologies, while scrubber manufacturers and alternative fuel providers can finally communicate with certainty over the timeline for implementing a compliance solution – and the concurrent benefits that their products can deliver. One thing is for sure, with 1,155 days to go until 1 January 2020, the hard work to adapt starts here.