From January 1st 2020 the IMO (International Maritime Organisation) have enforced a new global cap on Sulphur usage.
Currently ships run on fuel that contain sulphur. Using this fuel emits Sulphur oxides into the air. Sulphur oxide can be harmful to humans and lead to other atmospheric problems, such as Acid Rain. This is why the IMO have implemented the new regulation.
These new changes are having a major impact on the shipping industry and means that shipping lines are having to use marine fuels with a sulphur content of no more than 0.5% against the previous limit of 3.5% in an effort to reduce greenhouse gas emissions.
This regulation came into effect on January 1st 2020. Some of the main ways that shipping lines are looking to reduce their sulphur content are by:
• Using a new blend of fuels to create a new fuel that would meet the sulphur requirements.
• Fitting ships with engines that can use different types of fuels like liquefied natural gas, or biofuels.
• Installing an exhaust gas cleaning system (known as a scrubber) – The scrubbers are designed to remove the sulphur oxides from the ship’s engine and boiler exhaust gases. This will allow the shipping line to continue using higher sulphur fuels.
The above options all result in increased costs for the shipping lines. Heavy penalties will be applicable should the new regulations not be adhered to with no exceptions.
The consequence of the IMO 2020 will inevitably see an increase in freight rates to cover the shipping line costs. IMO 2020 will also see slower transit times worldwide and potentially more transhipments due to the need for refuelling. Port rotations will also be likely to try to alleviate the slower transit times.
In order to try and mitigate these charges for our customers, we will continue to look at all available options to ensure the most competitive services are utilised.
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