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IMO 2020 regulations

25 / 10 / 18

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On January 1st 2020, the sulphur limits regulation sets by the IMO (International Maritime Organization) should be applied to every vessel. The main aim is to drastically reduce sulphur emissions in order to protect the environment and the ocean’s biodiversity. Mr. Kitack Lim, IMO Secretary-General, explains that the objective is ‘‘to have a significant beneficial impact on the environment and on human health, particularly that of people living in port cities and coastal communities’’.

The current sulphur emission of marine fuel is limited at 3.5% and from January 2020 it has to drop to 0.5% or less (Regulation 14.1.3, MARPOL Annex VI).

There are three mains solutions and option of fuel for ship-owners:

  • Keep using the current fuel HSFO (High Sulphur Fuel Oil) only if “scrubbers” are placed on the vessel. The scrubber system “cleans” the gas emissions before their expulsion in the air.
  • By using alternative fuels like LNG or methanol
  • By using Low-Sulphur Fuel Oil (LSFO) and marine gas oil compliant with the new regulation

According to Bernard Dahdah, Senior commodities analyst at Natixis, “For the LSFO the main problem users will face is that the fuel is a blend so unless they are taking a regular route calling at the same port, they will face problems finding a consistent grade. Marine Gasoil is consistent but will be priced well above HSFO levels. As for scrubbers, one has to calculate carefully the cost of installation and maintenance and time spent dry docking”. 

The real impact will definitely be for seafarers and also refineries producing HSFO. This new regulation will have a deep impact and will reshape the market oil industry. The companies will need to adapt .The estimate of vessels being ready for 2020’s regulations is under 1%, this also points out that we definitely have a long way to go in this process.

IMO 2020 regulations

25 / 10 / 18

Share Article on 

 

On January 1st 2020, the sulphur limits regulation sets by the IMO (International Maritime Organization) should be applied to every vessel. The main aim is to drastically reduce sulphur emissions in order to protect the environment and the ocean’s biodiversity. Mr. Kitack Lim, IMO Secretary-General, explains that the objective is ‘‘to have a significant beneficial impact on the environment and on human health, particularly that of people living in port cities and coastal communities’’.

The current sulphur emission of marine fuel is limited at 3.5% and from January 2020 it has to drop to 0.5% or less (Regulation 14.1.3, MARPOL Annex VI).

There are three mains solutions and option of fuel for ship-owners:

  • Keep using the current fuel HSFO (High Sulphur Fuel Oil) only if “scrubbers” are placed on the vessel. The scrubber system “cleans” the gas emissions before their expulsion in the air.
  • By using alternative fuels like LNG or methanol
  • By using Low-Sulphur Fuel Oil (LSFO) and marine gas oil compliant with the new regulation

According to Bernard Dahdah, Senior commodities analyst at Natixis, “For the LSFO the main problem users will face is that the fuel is a blend so unless they are taking a regular route calling at the same port, they will face problems finding a consistent grade. Marine Gasoil is consistent but will be priced well above HSFO levels. As for scrubbers, one has to calculate carefully the cost of installation and maintenance and time spent dry docking”. 

The real impact will definitely be for seafarers and also refineries producing HSFO. This new regulation will have a deep impact and will reshape the market oil industry. The companies will need to adapt .The estimate of vessels being ready for 2020’s regulations is under 1%, this also points out that we definitely have a long way to go in this process.