Bimco has published conclusions from an official report stating that due to the new International Maritime Organisation (IMO) global sulphur emissions legislation, there may not be enough marine fuel available by 2020.
The new IMO study states that global sulphur needs to be capped at 0.5% from 3.5%, Bimco however, voiced concerns over the fact they have not addressed key issues.
They state that a level playing field is commercially critical for owners. Failing to ensure uniform compliance with the sulphur emission limits within any segment of shipping would significantly distort the competition between ship owners globally, as it will not be sustainable for compliant ships to compete with those operating in non-compliance. In BIMCO’s view, a robust enforcement of applicable sulphur limits is essential.
Bimco also believes the consequences of allowing some to operate in non-compliance due to lack of enforcement must be an essential element of the forthcoming debate and decision in IMO on fuel availability.
Bimco supports an early consideration of the 2018 IMO Availability Study of fuels with maximum sulphur content of 0.50%. Thorough analysis of the expected availability of fuel in 2020, which is going to be the key element of the study, should clearly include the knock-on impact ashore as shipping demand will occupy a sizable portion of the global middle distillate production capacity.
They believe this will have a knock-on impact on the price of distillate fuel ashore and could deprive vulnerable areas of the world from access to affordable fuel.
Bimco believes it is critical that the IMO decision on whether to implement the 0.5% limit in 2020 should take into account these crucial issues of cost and compliance so as to ensure a sustainable way forward for both the shipping industry and society in general.
Lars Robert Pedersen, Deputy Secretary General at Bimco, said: “It is clear that the IMO study is flawed, meaning it is not possible to determine from the study that there would be sufficient fuel available in 2020. On that basis, our opinion is that it would be irresponsible for IMO to make the decision to go for 2020 at MEPC 70 in October.
“There is clearly a need for additional analysis to ensure the supply chain for global trade is not seriously disrupted and developing nations are not hit hard by a lack of affordable energy
“This is not about the cost of low sulphur fuel for ships – that has long been known. We know that the shipping industry will buy the fuel they need. But if it is in short supply, the cost will rise not just for shipping but for all users of the fuel. This will price those in poorer economies out of the market.
“It’s a complex issue – but the difficulties in ensuring sufficient refinery capacity and the disruption caused by an overnight introduction have to be thoroughly taken into account”
The IMO recently conducted a study which predicted that if not addressed, shipping emissions could be the cause of 200,000 premature and preventable deaths by 2025. The study took into account heart disease and lung cancer, but not other non-deadly diseases also caused by pollution from emissions.