Friday, October 20, 2017 | ISSN 0719-241X

Global Sulphur Cap: The 2020 ambition

IMO regulation looks to reduce emissions in shipping industry
Edition of June 01, 2017

Environmental concern has risen to the top of the agenda in all transport-related industries. A clear example is the IMO regulation that looks to reduce sulphur emissions from the current 3.5% to a minimum of 0.5% by 2020, and its all anybody can talk about.

For certain, it’s a very ambitious goal, especially considering the implementation costs associated. Several documents have addressed the related issues. The International Chamber of Shipping (ICS) in its annual review 2017 dedicated extensive analysis to the many problems the industry will have to face in order to comply in this race against time. Among some of the issues carriers and shipper will have to face will be the “development of a standard format (a standardized system) for reporting fuel oil non-availability that may be used to provide evidence if a ship is unable to obtain complaint fuel oil and also the development of guidance to assist Member States and stakeholders in assessing the sulphur content of fuel oil delivered for use on board ship, based on the means available for verification that fuels supplied to ships meet the specified sulphur limit as stated on the bunker delivery note.”

The alternative fuels alternative

According to an extensive analysis conducted by energy and commodities information provider S&P Global Platts, “the shipping industry’s annual bunker costs could rise by up to $60 billion in 2020 with full compliance with the IMO’s sulfur cap. They made the assumption that the majority of the world fleet would switch from high sulfur fuel oil to a gasoil-based fuel.”

Shippers have a variety of options in how they choose to address this sharp rise in fuel costs in less than three years. Shifting to buying 0.5% sulfur bunker oil is likely to be the mainstream option, in particular when the shipping industry’s current inertia and financial problems are considered, but owners also have the option of investing in emissions-cleaning technology, shifting to cleaner alternative fuels or even ignoring the rules entirely and hoping they don’t get caught.

Liquefied Natural Gas (LNG) and methanol are the most popular options for CO2 reduced emission compliance. However, this alternative, although cheaper than exhaust-gas cleaning systems, also comes at a high implementation cost for existing vessels that have to change their entire combustion system for new fuel. LNG is growing in popularity and could turn out to be the most used solution by 2020, especially since LNG bunkering facilities are now starting to be established in a growing number of ports worldwide. The one big problem vessels fueled by LNG would have to face is the complexity and cost of LNG containment systems, together with size and location of bunker tanks and their impact on cargo carrying capacity and/or the operating range of the ship.

On the other hand, methanol is a very clean and much cheaper fuel, but there are much bigger concerns about safety and the risks involved in carrying the highly flammable alcohol-based chemical.

Technology to the rescue?

Exhaust gas cleaning systems, also known as ‘scrubbers’ are the alternative for those who do not wish to swith off oil, however, there are still significant questions about cost, reliability and environmental performance. There are also occupational health considerations involved, with seafarers potentially being exposed to the waste residue, especially if this has to be stored on board ship, should discharge into the sea be prohibited and ships have to opt for ‘hybrid’ or ‘closed loop’ systems.

There are currently a handful of ships using this technology, such as board passenger ships and ferries. However, the situation could change in the run up to 2020, especially with respect to younger ships, although this will greatly depend on the price of low sulphur fuel.

By MundoMaritimo

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