ICS tasks maritime stakeholders on 2025 low sulphur deadline

THE International Chamber of Shipping (ICS) has warned that a low sulphur fuel cap is “very likely” to be imposed in 2020 globally, five years before it is expected.

Meanwhile, INTERTANKO has welcomed the recent European Maritime Safety Agency (EMSA) Sulphur Inspection Guidance, supporting the implementation of Council Directive 1999/32/EC (The EU Sulphur Directive).

EMSA’s guidance aims to support a harmonised approach for the inspection of ships to ascertain their compliance and applying control procedures for enforcement, reports London’s Tanker Operator.

Looking into the more distant future, the low-sulphur cap of 0.5 per cent in bunker fuel is scheduled to take effect in 2020, but Annex VI of United Nations convention allows for the possibility that implementation of the global cap can be deferred until 2025. 

That now appears less likely, said the ICS, according to the Newark’s Journal of Commerce. “While postponement of the sulphur global cap until 2025 is still a possibility, the shipping and oil refining industries should not assume this will not happen simply because they are unprepared,” said ICS chairman Masamichi Morooka.

Said World Shipping Council (WSC) chairman Rod Widdows: “When you go from burning bunker to burning a distillate fuel everywhere, you’re talking about the better part of $100 billion, annually for the container industry alone.”

Maersk Line in January gave an update on its progress in gaining acceptance for its low-sulphur fuel surcharge, saying that many of its customers were accepting it, reports Newark’s Journal of Commerce. 

Said Maersk product manager Jacob Sterling: “During the last months of 2014, we have spent much time and energy explaining to our customers why we are putting in place the low sulphur surcharge, and how it will affect them. We think this has been instrumental for the general acceptance of the surcharge.”

Carriers can use scrubbers onboard ships to reduce emissions, or burn liquefied natural gas as an alternative low sulphur fuel, which is twice the price of standard bunker fuel, going as $283-$331 a tonnne, according to Bunker World.

Said IHS Maritime and Trade analyst Krispen Atkinson: “It is our belief that scrubbers may become common onboard containerships. Any containership on Asia-Europe service will spend an additional six days within an emission control area on each leg from Suez Canal to the ECA in the English Channel.” 

Atkinson expects Europe to enforce a low-sulphur cap regardless of the UN’s International Maritime Organisation (IMO) decision in 2020 in the Mediterranean.

Given the costs, Hong Kong’s Seaspan chief Gerry Wang has expressed doubts about a widespread role for LNG for container lines long-term. Only 18 containerships have been ordered with LNG tanks.

Under MARPOL (Marine Pollution) Annex VI, sulphur oxide, or SOx, content was reduced globally from 4.5 per cent to 3.5 per cent in 2012, and as of 2020, the SOx content in marine fuel will be cut to 0.5 per cent, subject to a feasibility study in 2018. 

But the ICS said the feasibility study is being delayed by member states. “If supply problems are identified at the end of 2018, this will be far too late for governments to take action,” said the ICS.

Limits inside the designated emission control areas in North America and Europe were reduced to one per cent in 2010, from 1.5 per cent, and were reduced again to 0.1 per cent on January 1.

Carriers in the US trades are not applying low-sulphur fuel surcharges uniformly, which creates confusion. One said: “We are publishing it as a pass-through charge, though we have to admit there is some confusion as some carriers have pretty much applied it to every single lane out there, while others are going lane by lane.”