IMO 2020 Sulphur Cap

From January 1st 2020 the IMO (International Maritime Organisation) will be enforcing 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 are implementing the new regulation.

These new changes are set to have a major impact on the shipping industry and will mean that shipping lines will have to use marine fuels with a sulphur content of no more than 0.5% against the current limit of 3.5% in an effort to reduce greenhouse gas emissions.

This regulation comes into effect on January 1st 2020. We have been seeing the impact of this throughout 2019 as the shipping lines make preparations. Some of the main ways they 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 will all result in increased costs for the shipping lines with no exception. Heavy penalties will be applicable from the implementation date should the new regulations not be adhered to.

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.

Shipping lines have been looking to change vessel and port rotations throughout the world routings which is beginning to impact on the length of transits. In preparation for the updated regulation changes we have already seen the implementation of surcharges to cover the initial costs as we approach January 2020.

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.

For more information; please see the below link:-

http://www.imo.org/

Should you have any questions regarding this please do not hesitate to contact us at [email protected]

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