Sulphur decision adds to woes

Malcolm Latarche
Malcolm Latarche

28 October 2016


The IMO’s decision at MEPC70 to opt for a 2020 date for the lowering of the global sulphur cap to 0.5% from its present 3.5% was widely expected given that the CE Delft report commissioned by the IMO had stated categorically that there would be sufficient supplies of low-sulphur fuel available. Others were not so certain and two other reports had come to the opposite conclusion. Some attempts were made by industry bodies to push for a stepped introduction of the lower limit and Russia had proposed a compromise date of 2023 but these appear to have been over ruled. The IMO said yesterday that the exact details of the resolution confirming the date will be released today (Friday) but given that there was just a simple choice of two dates, the need to explain may hint at some concessions. For the shipping industry there is little now to do but to come to terms with the decision and develop strategies for meeting its requirements. The choice to go with the earlier date will add to the financial pressure on ship operators coming as it does on top of the ratification of the ballast water convention. If it transpires that the quantities of ultra low sulphur fuel are insufficient to meet demand, then for new ships there is the option of selecting an engine capable of running on alternative fuels such as LNG but for existing vessels the possibility of conversion is limited to just a handful of engine types leaving a straight choice between opting for running on distillates or installing scrubbers. None of the options is cheap so some owners may have no choice but to scrap financially unviable ships. Perhaps the best that can be said is that the industry now has clarity on a matter that had been hanging like a sword of Damocles for almost a decade. Still every cloud has a silver lining and shipowners’ woes will be offset by scrubber makers’ satisfaction at the prospect of a rapidly growing market.