Home / Uncategorized / Rising Nervousness Ahead of the 2020 Sulphur Cap



While the decision to set 2020 as the start date for the 0.5% global sulphur cap has been widely welcomed for demonstrating that shipping is prepared to make tough choices, it’s becoming clear that the IMO has set the shipping and refining industries a tough technical challenge of producing and sourcing the fuel necessary to meet the 0.5% sulphur maximum.

The International Chamber of Shipping (ICS) has serious concerns that the smooth flow of global maritime trade will be seriously impeded unless the IMO resolves issues concerning the successful implementation of the low sulphur fuel cap scheduled to come into effect on 1 January 2020.
We have covered the global low sulphur fuel cap extensively in newsletters dating back over the past 12 months. International maritime media continue to report uncertainty whether sufficient quantities of compliant fuels will be available in every port worldwide by the implementation date. They also note the absence of global standards for many of the new blended fuels that oil refineries have promised – so there are potentially serious issues due to incompatible bunkers. Importantly, ships will need to start purchasing compliant fuels several months in advance of January 1 2020, but right now, no-one knows what types of fuels will be available, at what price, specification or in what quantity.

Global Sulphur Cap – Chart

And a report out last week suggests LNG is not the panacea for shipping’s fuel concerns now that the IMO has voted in favour of cutting greenhouse gas emissions from ships in half by 2050.
The report, from Vienna-based JBC Energy, states that even if the entire global shipping fleet were to switch to LNG, the industry would still be short of its CO2 reduction targets by 350m tonnes. JBC Energy said the shipping industry would need to seek out extra measures including efficiency gains, carbon capture and storage, hybrids and batteries to meet its newly set green targets
While LNG does help reduce air pollution, it is potentially worse than HFO in the context of GHG emissions. This is because methane is a potent greenhouse gas, and only a very small amount needs to escape to cancel out the combustion CO2 benefits.



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