IMO 2020 News Round-Up 16 December 2019 – 15 days to 1 January 2020
Ship and Bunker:
Singapore: HSFO Still Most Popular Marine Fuel in November
But HSFO now less than than 50% of the total volume as distillate & LSFO sales hit record highs. Read in Full
Top 10 Bunker Suppliers for 2020
This report jointly developed by Ship and Bunker and SeaCred insight into key bunker industry players for 2020 in light of IMO Sulphur 2020 cap.
Infomarine – EPA moves to ease availability of IMO 2020 compliant fuel
The U.S. Environmental Protection Agency (EPA) is revising key regulatory text to ensure that U.S. refiners and suppliers can permissibly distribute IMO 2020 compliant marine fuel for use in ships operating outside read in full
Lloyd’s List – Trafigura sees inefficiencies in bunker delivery supporting freight
The Geneva-based company needs to debunker up to eight ships with high sulphur fuel oil ahead of the IMO’s low sulphur rule deadline, which takes effect on January. More https://lloydslist.maritimeintelligence.informa.com/LL1130343/Trafigura-sees-inefficiencies-in-bunker-delivery-supporting-freight (subscription)
SINGAPORE DATA: Nov bunker fuel sales rise 4% to 4.08 mil mt
Firm demand for the low sulfur bunker grade had boosted overall sales, with more shippers procuring cleaner fuel ahead of IMO 2020. In Full https://www.bunkerworld.com/news/155953?tag=1-472238-28690183-0-BW (free subscription)
Sri Lanka’s Lanka Marine Services starts VLSFO delivery ahead of IMO 2020
“We carried out the first delivery on December 11 directly loaded from the floating storage,” the company said. In Full https://www.bunkerworld.com/news/155950?tag=1-472238-28690183-0-BW (free subscription)
Lloyd’s Loading List – Ocean freight prices rebounding after post-peak dip
Spot rates showing signs of recovery with several lanes seeing freight rates surpassing their levels in November, due to changes on both the supply and demand side – notably higher fuel surcharges ahead of IMO 2020 more https://www.lloydsloadinglist.com/freight-directory/news/Ocean-freight-prices-rebounding-after-post-peak-dip/75631.htm#.XfeoZZP7SJA
Shipping Watch: Container rates soar ahead of 2020
Container rates increased 9 percent last week, show data from the SCFI. Jefferies says scrubber retrofits and new bunker surcharges inflate rates, while SeaIntelligence Consulting CEO Lars Jensen mainly sees effects tied to preparations up to 2020. More https://shippingwatch.com/secure/carriers/Container/article11795129.ece (subscription needed)
Maritime Executive: Nautilus: Mariners Risk Criminal Charges for IMO2020 Noncompliance
Mariners’ union Nautilus International is concerned that the new IMO 2020 sulfur regulations could lead to criminal penalties for officers in the event of non-compliance, and it has called on vessel operators to ensure high levels of training and preparation in advance of the impending switchover. More https://www.maritime-executive.com/article/nautilus-mariners-risk-criminal-charges-for-imo2020-noncompliance
Tradewinds: Problems with global sulphur cap still linger, Greece warns
Greece, one of the most influential voices in the IMO, has warned that shipping is not yet ready for the global 0.5% sulphur cap, which is set to take effect next month. “A month before the implementation, availability, compatibility, safety and quality issues of the new fuels have not been resolved yet,” Greek Shipping Minister Yiannis Plakiotakis said at the 19th Navigator Conference.
Safety4Sea: The second SAFETY4SEA Singapore Forum was successfully concluded on Wednesday 14th of November 2019 at Marina Bay Sands Expo & Convention Center, Singapore, attracting 250 delegates from 120 organizations.
Mr. Nick Makar, Senior Vice President, Maritime Administration / Regulatory Affairs, International Registries (Far East) Limited discussed the existing regulatory framework for the enforcement of air emission standards under MARPOL Annex VI, and looked at the various measures incorporated into national maritime policies for achieving 2020 compliance. Watch the presentation
Hong Kong Daily News – full article below http://www.shippingazette.com/:
Maersk to sack 200 in face of 25pc fuel price hike result of UN edict
THE world’s biggest shipping company, AP Moller-Maersk, will lay off some 200 people to cut costs as it faces a 25 per cent higher fuel costs because of a United Nations mandate to cut sulphur emissions, reports the Wall Street Journal.
“We have announced internally the need to save cost in our head office functions and that it will also lead to reductions both in and outside Denmark,” a Maersk spokesman said.
Sources say jobs will be cut at the company’s headquarters in Copenhagen and at Hamburg Sud, the German container operator that Maersk bought in 2017.
Maersk is to focus more end-to-end logistics, warehousing and customs clearance. “Maersk needs to build up our non-ocean services and this will affect ocean services,” one person familiar with the plan said.
This source said there are overlaps in jobs at the information technology department following the merger with Hamburg Sud, which originally saw its workforce cut by 200 people to around 900 after Maersk’s takeover.
Maersk employs 75,000 people in more than 120 countries. The parent company this month reported a net profit of US$520 million in the third quarter, up 30 per cent year on year.
Ship and Bunker – 3 articles:
IMO 2020 the “Perfect Storm” for Litigators
The new cap will put a lot more focus on what has happened to the bunkers onboard, says Hill Dickinson Partner, Beth Bradley. Read in Full https://shipandbunker.com/news/world/256137-imo-2020-the-perfect-storm-for-litigators
IMO2020 Fuel Switch ‘Done by December 10’
Shipowner expects distillate demand to be buoyand over short term. Read in Full
New Report Provides Insight into the World’s Top 10 Bunker Suppliers for 2020. The new report has been jointly produced by Ship & Bunker and SeaCred.
Read in Full https://shipandbunker.com/news/world/421955-new-report-provides-insight-into-the-worlds-top-10-bunker-suppliers-for-2020
Bunkerspot: OilChart ‘positioned and ready’ to meet IMO 2020 fuel demand
The group says it can supply all IMO 2020-compliant fuels and is also offering a buy back scheme for remaining high sulphur fuel oil on board vessels as the end of the year approaches. More https://www.bunkerspot.com/europe/49492-europe-oilchart-positioned-and-ready-to-meet-imo-2020-fuel-demand
DREWRY PUBLISHES FIRST LOW-SULPHUR BAF REFERENCE PRICE
With the new IMO 2020 start-date now less than a month away, maritime consultancy Drewry has published its first low-sulphur reference bunker index tracker.
The new index will be updated quarterly. Philip Damas, head of Drewry Supply Chain Advisors, commented: ‘Our new low-sulphur bunker price tracker is intended to standardise, clarify and simplify the adjustment of Bunker Adjustment Factors (BAFs) between shippers and carriers or forwarders.
Lloyds List: Bunker tool seeks to standardise low-sulphur charges
As carriers start loading low-sulphur bunkers, they have begun passing on costs to customers. A new index provides a standardisation process. Confusion and concern remain about the timing and transparency of carriers’ low-sulphur cost recovery mechanisms. More https://lloydslist.maritimeintelligence.informa.com/LL1130260/Bunker-tool-seeks-to-standardise-lowsulphur-charges subscription required
Safety4Sea: 2020 sulphur cap: Litigators to face storms of fuel-compliance issues
Although the shipping industry has been preparing for the upcoming 2020 sulphur cap, international maritime law specialist Hill Dickinson comments that it will be a challenging period for litigators as they will have to deal with disputes between owners, charterers and bunker suppliers in cases of non-compliance
S&P Global Platts: Nigeria’s low-sulfur Egina crude sees IMO 2020 boost
Nigeria’s Egina crude has seen values rise as its low-sulfur qualities make it attractive to refiners ahead of the International Maritime Organization’s stricter 0.5% sulfur cap on marine fuel coming into force from January 1, sources said. https://www.bunkerworld.com/news/155902 subscription required
Gazprom Neft plans launch of distillate-based 0.5% fuel in 2020
Russian oil major Gazprom Neft plans to supply 0.5% sulfur marine fuel from its Omsk refinery in 2020, company officials said in an interview on the company’s website. https://www.bunkerworld.com/news/155911 subscription required
Lloyd’s List: The Interview: Hugo De Stoop
Mr De Stoop leads one of the largest crude oil tanker companies in the world. Over the past couple of years, Euronav has positioned itself as an environmentally conscious company that wants to help the wider industry combat its emissions. Mr De Stoop talks to Lloyd’s List about what the future has in store and what the company learned in preparing for the global sulphur cap. https://lloydslist.maritimeintelligence.informa.com/LL1130267/The-Interview-Hugo-De-Stoop
Handy Shipping Guide
Maritime Advisory Group Introduces Low Sulphur Fuel Index Tracker
Variable Bunker Costs Post Cap Addressed
As part of a series of initiatives aimed at bringing greater transparency to fuel costs resulting from the new IMO 2020 low-sulphur regulation, maritime advisory, statistics and research group Drewry has published its first low-sulphur reference bunker index tracker.
Drewry says that in recent months, both shippers and forwarders have expressed confusion and concern over the timing and transparency of the new charges being introduced by carriers as they transition from IFO 380 (intermediate fuel oil) to the new, low-sulphur fuel standard. Others have complained about what they consider unfair Bunker Adjustment Factor (BAF) charges.
Drewry’s new low-sulphur BAF index, which will be updated quarterly, provides a simple indexing mechanism to help determine changes in BAF charges during the lifetime of a contract. http://www.handyshippingguide.com/shipping-news/maritime-advisory-group-introduces-low-sulphur-fuel-index-tracker_12521
Safety4Sea – 2020 sulphur cap: Precaution of ‘Compatibility’ and ‘Cold flow properties’ for compliant fuels
In the wake of the fast approaching implementation of the 2020 sulphur cap, the production method of the compliant fuel oils is expected to become more diverse than at present. As such, the Japan P&I Club noted five properties of residual fuel oils that should be further paid attention when using compliant fuel oils.
These are the five properties of residual fuel oils that should be further paid attention when using compliant fuel oils:
- Cold flow properties
- Low viscosity
- Cat-fine (contents of Aluminum and Silicon)
- Ignition and combustion quality
RIGHTSHIP LAUNCHES COMPLIANCE “TEMPERATURE CHECK” AHEAD OF 2020 SULPHUR CAP
To support improved industry management of risk and safety ahead of the implementation of the 2020 Sulphur Cap, RightShip is asking the operators of vessels over 8,000 DWT to confirm their compliant fuel choices and ship implementation plans in a new compliance assessment, the company has announced today. More https://www.rightship.com/press-release/rightship-launches-compliance-temperature-check-ahead-of-2020-sulphur-cap/
Lloyd’s List – Fuel price spread hit record this month By Hwee Hwee Tan
Argus Media’s price assessments showed the price spread between 0.5% sulphur fuel oil and 3.5% sulphur fuel oil reaching a record high on November 14 before easing off this week. If this indicative price spread continues to hold above $200-per tonne, it may encourage shipowners to reassess scrubber installations (subscription) https://lloydslist.maritimeintelligence.informa.com/LL1130091/Fuel-price-spread-hit-record-this-month
Lloyd’s Loading List – Ocean freight customers face significant fuel price rise next month
Shippers and freight forwarders are preparing to help carriers cover the extra cost of next year’s cleaner, low-sulphur fuel from next month, for which prices look set to be around 34-38% higher than the level paid for the current IFO 380 (intermediate fuel oil) fuel. And although transitional or ‘emergency’ bunker charges were only expected to apply to spot rates and to contracts of less than three months, customers with annual contracts have also been requested by some carriers to start paying an IMO BAF from 1 December, container shipping analyst Drewry noted. More https://www.lloydsloadinglist.com/freight-directory/news/Ocean-freight-customers-face-significant-fuel-price-rise-next-month/75458.htm
Ship and Bunker – IMO Ready to Support PSC Regimes on Sulfur Cap Enforcement
Particularly in respect to capacity building and training. https://shipandbunker.com/news/world/297678-imo-ready-to-support-psc-regimes-on-sulfur-cap-enforcement
Hong Kong Daily News – full article below http://www.shippingazette.com/:
Many problems will arise from low-sulphur fuel use, says researcher
THE more one gets into the nuts and bolts of low greenhouse gas fuel, the more problematic it becomes, says Anders Valland, research chief at SINTEF, one of Europe’s largest independent research organisations.
While there is no perfect fuel, says Mr Valland, the most applicable and with the least greenhouse gas emissions are methanol, ethanol, butane, LNG, LPG and propane.
The problem, is that many of these fuels have lower energy densities than heavy fuel oil and marine diesel oil, requiring more space to provide the same energy, he told London’s Vessel Performance Optimisation (VPO) during a tour of his lab in Trondheim, Norway.
“It is more challenging for these fuels to bring the required energy for the operation of larger ships, and those that contribute the highest emissions,” he said.
Liquid hydrogen from renewable energy is one of the cleanest fuels, but it has a very low energy density and a large storage volume.
“If you have low energy density fuel, you will probably only be able to carry enough for one or maybe two legs of your journey. This means coming into port with low fuel supply,” he said.
Mr Valland went onto say that these large ships will fuel wherever the fuel is cheapest. The supplier knows these ships are looking for the cheapest fuel.
“If you change this and say that any vessel coming into port is going to have to refuel, you put him into a seller’s market rather than a buyer’s one. This has huge implications,” he said.
“There are also consequences if ships have to refuel much more often than they do today. We already have congested harbours that will become even more congested. Fuel stations will pile up because of this.
An alternative is LNG, a fuel that contains no sulphur and emits very low levels of CO2. However, its release of unburned methane has led to widespread debate around LNG as a long-term sustainable fuel suited to achieving the IMO’s 2050 target.
The release of methane, a greenhouse gas, is up to 30 times more than standard bunker and low-sulphur blends. But LNG is twice the volume compared to the same energy stored in the form of heavy fuel oil.
While alternative low-carbon fuels like hydrogen offer the potential to make shipping cleaner, emissions during their production before onboard use, should also be considered. “Today, 80 per cent of hydrogen production is from natural gas. It means there really is a lot of carbon emissions,” Mr Valland said.
“The overall emissions of fuels depends on how you produce it. At the moment there are no zero greenhouse gas fuels on a well to wake basis.”
LNG is produced in much higher quantity than what is currently used by shipping. In contrast, the production of methanol and hydrogen would need to increase to meet shipping’s energy needs.
Some 70,000 ships of the 90,000 in the global fleet could adopt alternative propulsion solutions such as batteries, fuel cells, hydrogen or methanol fuel to reduce greenhouse gas emissions.
But the challenge, he says, is that the other 20,000 ships, 22.5 per cent of the 90,000, are the biggest emitters and are least suited to alternative fuels and propulsion systems, he said.
Shipping today consumes 250 million tons of fuel annually, with 75 per cent of fuel consumption from heavy fuel oil, 23 per cent being distillates and two per cent being liquefied natural gas (LNG) and other alternative fuels.
Lloyd’s List – Greece urges IMO to consider delaying sulphur cap
The 0.5% sulphur cap is just a month away from coming into force but the controversy surrounding it is far from over. Greece’s shipping minister has made a high-profile appeal to governments and the IMO to consider postponing the 2020 sulphur cap implementation. But the IMO is clear that a delay is not possible (subscription) https://lloydslist.maritimeintelligence.informa.com/LL1130133/Greece-urges-IMO-to-consider-delaying-sulphur-cap
Ship and Bunker IMO2020: Managing the Risk of Commingling VLSFO Bunkers
The probability of two VLSFO fuels being incompatible remains low, but the consequences can be extreme, writes NSI’s Michael Donaldson-Badger. More https://shipandbunker.com/news/world/111978-imo2020-managing-the-risk-of-commingling-vlsfo-bunkers
S&P Global Platts:
Monjasa ups credit facilities by $160 million in preparation for IMO 2020
At current crude oil prices the bunker industry may need as much as $4 billion more working capital to meet the higher fuel bills next year, Lina Molfetas, senior bunker trader at KPI Bridge Oil, said in October. (Subscription) https://www.bunkerworld.com/news/155855
HSFO crack spreads at record lows as IMO 2020 looms
Global cracks for high sulfur fuel oil have weakened sharply over the past two months after a year of abnormal strength. https://www.bunkerworld.com/news/155853
Lloyd’s List – Majority of German owners turn to low-sulphur fuel
With just over a month to go until the introduction of IMO 2020, German owners are still concerned about availability and costs of compliant fuels (subscription) https://lloydslist.maritimeintelligence.informa.com/LL1130186/Majority-of-German-owners-turn-to-lowsulphur-fuel
ShipInsight – CSSC Marine Service to tackle 2020 fuel pumping problems
CSSC Marine Service Co (CMS), the equipment service subsidiary of China State Shipbuilding Corp (CSSC), is using its expanded network of service stations to deliver a retrofit solution to engine starting problems that may occur with less viscous low-sulphur fuels.
Some two-stroke engines using common-rail injection report problems reaching and maintaining high enough fuel rail pressure due to wear of fuel pumps, starting air problems or leaking injection control units. The concern is amplified when using fuels that are lighter and less viscous than heavy fuel oil, such as many of the very low sulphur fuel oil blends ship owners are likely to use to comply with IMO’s sulphur cap from 1 January 2020. Less viscous fuels require higher pumping pressure or engines can fail to start.
Fathom – Fuel quality on marine engines still a key 2020 issue
Parker Kittiwake regional account manager Scott Herring says his company has been urging owners to take catfine and fuel quality issues more seriously. notes that: “There are significant concerns around how these new fuels will affect marine engines, which is why testing for compatibility and cat fines, for example, is increasing.” https://fathom.world/fuel-quality-still-key-2020-issue/
Maritime Executive – Survey: Most German Shipping Companies will use LSFO
The vast majority of ships in the German fleet will run on low sulfur fuel oil (LSFO) from January 1, according to a survey undertaken by the German Shipowners’ Association (Verband Deutscher Reeder, VDR).
81 percent of the companies surveyed will be using LSFO with a sulfur content of 0.5 percent in the future. 11 per cent will continue to use heavy fuel oil (HFO) and scrubbers. Six percent of respondents indicated that they will be using other fuels, such as those prescribed for Emission Control Areas in the North Sea and the Baltic Sea – fuels with a sulfur content of 0.1 percent. More https://maritime-executive.com/article/survey-most-german-shipping-companies-will-use-lsfo
Ship and Bunker – VLSFO Prices: One Size Does Not Fit All
Currently there are 3 significantly different VLSFO spec clusters being sold. More https://shipandbunker.com/news/apac/733571-vlsfo-prices-one-size-does-not-fit-all