2020 sulphur cap, cheating and choices

It should be no surprise that shipping news sites will be focussing more and more on 2020 as the impact of the global sulphur cap in fuels draws closer.

This week alone there have been reports about the Exxonmobil survey which suggests 70% of shipping company respondents do not believe the industry is ready for the deadline, a potential submission to the IMO and others that possible cheating after 2020 should mean that the IMO should demand compliance with the cap purely on sulphur levels in fuel and elsewhere another report suggesting fewer than 500 ships will be fitted with scrubbers.

The issue of cheating is one that is constantly raising its head but any attempt to prevent cheating in the manner suggested is really little more than an admission by port states that they do not intend to or – for other reasons (probably economic) will not be able to – enforce the 0.5% cap in their own waters.

After all, any port state can set rules regarding the supply of fuels in their own ports if they so wished, but testing every ship sailing into their waters or calling at ports will be a very expensive undertaking that will not be financed by penalties if not enough transgressors are identified.

As for scrubber take up, the current level may be a disappointment to system makers and unlike ballast water treatment installing a scrubber is not something that can be enforced on shipowners.

The low take-up should though be a matter of concern for the IMO as the use of exhaust gas treatment was one of the pillars upon which the case for setting the 2020 date for the cap was built. A doubling or even trebling of the number of ordered systems will only just reach the very lowest level envisaged by CE Delft the report’s authors.

That there should be uncertainty over the choices available with a little over two years to go before the imposition of the cap is much more understandable. Refiners have been slow in announcing their plans and while the shipowners still hold a trump card that allows them to sail without compliant fuel if none is available even if they do not have scrubbers installed, playing it may not be as easy as they may think.

Only ships with engines that can burn LNG are properly immune from problems because for all other ships, the loophole will be dependent on them being the last to order bunkers after all stocks of complaint fuel have been bought and paid for by other owners.

Playing chicken and waiting for your competitors to blink first is not really a viable bunkering strategy.

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