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New Sulphur Law Sparks Shipping Chaos

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A new sulphur fuel requirement that is due to come into effect by 2020 is causing the shipping industry to prepare for hard hitting monetary demands.

According to the Journal of Commerce, industry leaders have said the 0.5% in sulphur for bunker fuel will result in carriers incurring tens of billions of dollars annually in higher fuel costs.

The International Chamber of Shipping stated: “For better or worse, the global cap is very likely to be implemented in 2020, almost regardless of the effect that any lack of availability of compliant fuel may have on the cost of moving world trade by sea.”

Container carriers are said to already be struggling to implement the 0.1% sulphur in fuel requirement that was applied on January 1, 2015.

Ron Widdows, World Shipping Council Chairman, said: “When you go from burning bunker to burning a distillate fuel everywhere, you’re talking about the better part of US$100 billion annually for the container industry alone. Who pays for that? The carriers today haven't yet figured out a way to pass on the full cost of bunker fuel changes.”

To reduce sulphur emissions, carriers can use scrubbers aboard ships or they can burn LNG as an alternative to low sulphur fuel.

Burning LNG fuel is a solution, however, according to Krispen Atkinson, Principal Analyst with IHS Maritime and Trade, this method doesn’t seem to be gaining much traction in the container sector.

(Source: Green 4 Sea)

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