Economist article criticises IMO 2020 sulphur rule

Malcolm Latarche
Malcolm Latarche
ShipInsight

26 October 2018


While the IMO has been further debating and voting on measures around the 2020 sulphur cap changes this week at MEPC 73, some articles in the non-shipping press are appearing that could undermine any resolutions made.

For example, an article in this weeks print edition of the Economist, some of the effects of the ban are discussed and the IMO 2020 rules come in for severe criticism. The article which can be found at here says the rules to make ships cleaner will impose crippling costs on the industry while worsening global warming.

Echoing comments made by US President Trump, the article says “Most shipowners will switch to pricier low-sulphur fuels. But if all ships did so in 2020, demand for them would double and the industry’s fuel bill would rise by $60bn, roughly the entire sum spent in 2016, say analysts at Wood Mackenzie, a research firm. It would also have a dramatic impact on aviation and road transport. Ships run on a heavy residue that remains after petrol, diesel and other lighter hydrocarbons are extracted from crude oil in refining. Competition for lighter fuel that clean ships require could raise the price of diesel for lorries by 50% and for jet fuel by 30-40% in 2020, reckons Philip Verleger, an energy economist. The resulting spike in global transport costs, he says, would hit world trade and wipe a staggering 3% off America’s GDP and 1.5% off the whole world’s in 2020.

The article is also critical on any attempt to reduce SOx emissions and quotes another publication saying “Some studies find that by burning heavy marine fuel the industry is slowing global warming, as the cooling effects of sulphur emissions outweigh the warming caused by those of carbon dioxide. Scientists at the Centre for International Climate and Environmental Research in Oslo calculate that shipping in net terms reduced man-made warming by 7% in 2000. The IMO’s new rules will undo much of this effect. The paper in Nature Communications found that the use of lower-sulphur fuels after 2020 will reduce the cooling effect from shipping by around 80%”.

The article closes by saying “The IMO does not accept that this might kill more people in the longer term than the number who succumb each year to air pollution. “This is the IMO's biggest impact in its 60-year history,” beams Kitack Lim, the organisation’s secretary-general. Alas, for efforts to combat climate change, it is an impact of the wrong sort”.

The decision by the IMO to push forward with 2020 on time and in full has been seen by some as a way for the organisation to underline its ability to push through environmental regulation, the irony is that this time around comments by world leaders supported by articles in the main stream media may actually succeed in turning public opinion against the measures proposed