Sulphur2020 News Round-Up 7 September 2020
10 featured news updates on Sulphur2020 including a Podcast and the fact that Containerships overtake tankers for the most fitted scrubbers details
Mitsubishi Shipbuilding’s marine sulphur oxides (SOx) scrubbers have been successfully installed on 22 ships across three ship types during the last 8 months.
The DIA-SOx scrubbers have been installed as scheduled despite COVID-19 restrictions. Remote commissioning conducted via close communication and cooperation with the engineers of its local partners in China and Singapore respectively enabled Mitsubishi Shipbuilding to continue with the planned installations. Read more https://vpoglobal.com/2020/09/04/mitsubishi-shipbuilding-completes-22-scrubber-retrofits/
Rotterdam Hi-5 bunker spread hits all-time low
The premium of very low sulfur fuel oil over its high sulfur equivalent at Rotterdam port fell to a record low on Aug. 21, as the latter stays resilient to bearish fundamentals in the global oil complex.
Read blog post here https://www.bunkerworld.com/news/insight/157893/Britt-Russell-Webster-James-Goldburn/Rotterdam-Hi-5-bunker-spread-hits-all-time-low
Shipper relief as ocean carriers finally scrap low-sulphur surcharges
Ocean carriers are officially scrapping the low-sulphur fuel surcharges introduced last year to mitigate the impact of the 1 January IMO 0.5% sulphur cap regulations on marine fuel.
Maintaining low-sulphur surcharges as fuel prices plunged has been a bone of contention for shippers, who have criticised carriers for being slow to ditch the additional fee. Read in full https://theloadstar.com/shipper-relief-as-ocean-carriers-finally-scrap-low-sulphur-surcharges/
Demand for HSFO at Singapore rising as more scrubbers fitted
Singapore has seen a rise in demand for high sulfur bunker fuel of late from the growing number of ships that have completed scrubber installations, given the limited availability of the grade at smaller ports, market sources said. More https://www.bunkerworld.com/news/157981
MARINE FUEL 0.5%S: Ample supply weighs on global marine fuel markets in September
Global marine fuel 0.5% prices are expected to be capped by increasing supply and depressed demand from the retail sector in September as refiners continue to grapple with weak low sulfur fuel oil margins.
Inventory levels in Asia in particular are expected to rise as an arbitrage window from the West that opened in early-August has market participants expecting at least a 500,000 mt increase in volumes landing in Singapore in September from the month before. Read the blog here https://www.bunkerworld.com/news/insight/157965/Rohan-Menon-Sarah-Jane-FlawsBeth-Brown/MARINE-FUEL-0-5-S-Ample-supply-weighs-on-global-marine-fuel-markets-in-September
South Korea tightens sulphur cap By Hwee Hwee Tan
The six ports affected by the new regulatory cap are Incheon, Pyeongtaek-Dangjin, Yeosu, Gwangyang, Busan and Ulsan. Vessels are required to switch to 0.1% sulphur fuel within an hour of anchoring or docking and do so until an hour before leaving. From January 1, 2022 ships must switch over on entering the emissions control areas Read here (subscription) https://lloydslist.maritimeintelligence.informa.com/LL1133720/South-Korea-tightens-sulphur-cap
Pricing for marine fuel 0.5%S in Balboa, Houston jumps on tight supply, wholesale values
Bullish crude complex also plays role in recent bunkers price increases. Read here https://www.bunkerworld.com/news/157960
Listen: Asian HSFO markets endure IMO 2020, coronavirus challenges
Featuring Mriganka Jaipuriyar Surabhi Sahu Oceana Zhou Commodity Oil, Shipping Length 12:12
Topic COVID 19: Coronavirus Outbreak, Environment and Sustainability, IMO 2020
Light sulfur fuel oil has been the main marine fuel of choice worldwide, but high sulfur fuel oil has held its stead in Asia. S&P Global Platts senior oil experts Surabhi Sahu and Oceana Zhou join Platts Asia Head of News Mriganka Jaipuriyar in examining the demand for HSFO particularly in Singapore, which is the world’s largest bunkering port. They also discuss China’s fuel demand and outlook, as well as the impact of the coronavirus pandemic on the Asian fuel oil markets. Link to listen https://www.bunkerworld.com/news/insight/157949/Surabhi-Sahu/Listen-Asian-HSFO-markets-endure-IMO-2020-coronavirus-challenges
Singapore LSFO-HSFO spread falls to 3-month low on rising LSFO supply
Bunker suppliers in Singapore reported fewer inquiries for low sulfur bunker fuel in the week ended Aug. 28. More here https://www.bunkerworld.com/news/157953
Containerships overtake crude oil tankers as most scrubber-fitted sector
Containerships with a collective cargo carrying capacity of 5.3m TEU are now fitted with an exhaust gas cleaning system (scrubber) to remove sulphur oxides (SOx) from the exhaust gasses generated by the combustion processes in marine engines and thereby comply with the IMO 2020 global sulphur regulation which came into force on 1 January 2020.
By the start of July, the share of the containership fleet with scrubbers installed exceeded that of the crude oil tanker fleet. At that time, the container shipping sector became the most scrubber-fitted amongst the main cargo carrying ship types. “In order to cut the sulphur oxides emission, shipowners who can afford to buy a scrubber have done so to a substantial extent, with investments predominantly directed towards high consumption ship types,” says Peter Sand, BIMCO’s Chief Shipping Analyst and continues – read more: https://www.bimco.org/news/market_analysis/2020/20200813containerships_overtake_crudeoil_tankers_scrubber
Bunkerspot: AMERICAS: Panama’s May bunker volumes slip back 5% year-on-year
New Panama Maritime Authority statistics show that May bunker volumes totalled 393,316 metric tonnes, and the month was notable for a surge in low sulphur marine gasoil sales, which almost touched the combined total for the first four months of the year.
Bunkerspot: AMERICAS: New joint venture will look to process heavy crude oil using Quadrise MSAR technology
Oil exploration, development and technology group TomCo Energy and Valkor have formed a joint venture, Greenfield, which will look at the development of an oil sands plant at Asphalt Ridge in Utah; Valkor has also granted Greenfield a licence to Quadrise MSAR emulsion fuel technology for the processing of heavy sweet crude oil into IMO 2020-compliant heavy fuel oil.
Bunkerspot: GLOBAL: VLSFO: ‘load it and use it,’ says LR’s Douglas Raitt
Emerging problems over the stability of very low sulphur fuel oils (VLSFOs) when stored for longer time frames were addressed in an online webinar today hosted by Integr8 Fuels, with Douglas Raitt, Global FOBAS Manager, suggesting that the fuel may not be ‘a formulation to be kept for a period of time’.
The webinar, which looked at bunker fuel in the current shipping market, featured a wide-ranging discussion between Raitt and Chris Turner, Manager – Bunker Quality and Claims with Integr8 Fuels, and the quality of the new VLSFOs was, not surprisingly, a key talking point.
Bunkerspot: GLOBAL: Presence of shale oil in VLSFO blends is on the up
Since 1 January 2020, the use of shale oil in blended very low sulphur fuel oils has been on the rise, with significant levels of Estonian shale oil – which can cause issues such as onboard filter clogging – having recently been seen in bunkers supplied at ARA ports, according to Douglas Raitt, Global FOBAS Manager, Lloyd’s Register.
Bunkerspot: ASIA PACIFIC: Australia increasing fines for pollution related incidents
The majority of Australian States are increasing their fines for pollution related incidents with effect from 1 July.
Ship and Bunker: Bunker Futures Contract starts at Shanghai Exchange
The marine fuel futures contract that launches today on the Shanghai International Energy Exchange is likely to attract strong interest, despite weakened ship fuel demand amid the coronavirus pandemic.
Shipping Gazette: Pandemic forces shipowners to shelve scrubber installation
SHIPOWNERS are postponing or cancelling the installation of scrubbers that extract sulphur emissions from their vessels as the coronavirus pandemic tightens finances, reports Reuters.
Regulations from UN’s agency the International Maritime Organisation (IMO), which took effect in January, were viewed by the oil and shipping industries as one of the first worldwide efforts to enforce environmental change.
The rules aimed to make ships use fuel with a sulphur content of 0.5 per cent, compared with 3.5 per cent previously. Operators had the alternative option to install devices – scrubbers – to strip out the pollutant.
In the run-up to IMO 2020, dozens of traders and shipowners, bet on installing scrubbers hoping to make a profit from buying cheaper high-sulphur fuel as the newly developed 0.5 per cent alternative would be in tight supply.
But with an average cost of US$2 million to install just one, the stakes were already high for fleet operators often facing investments of more than $100 million.
Now the industry financial squeeze, caused by a decline in demand for shipping due to the Covid-19 crisis, may mean scrubbers become less of an option for ship owners to comply with regulations.
Leading Norwegian firm Wallenius Wilhemsen, which transports cars and other vehicles, told Reuters it had cancelled scrubbers for nine ships in the past few months and postponed an additional eight until later this year or 2021.”As a result primarily of the Covid-19 pandemic, customers have significantly reduced their output of vehicles,” a spokeswoman said. “With that comes a reduction in revenues and we are taking all necessary steps to reduce cash outflows.”
Clarksons Research said it recorded a significant slowing in the number of ships already in service installing scrubbers, estimating there were under 100 vessels undergoing retrofits versus over 300 at the start of the year.
Clarksons said the number of ships pending retrofits was 750 – some of which may be postponed or cancelled – versus a peak of over 2,000 pending in the middle of 2019. They estimated there were now 3,015 ships fitted with scrubbers, from 506 at the start of 2019.
Shipping Gazette: Cargo, low fuel bright spots in worst year for aviation: IATA
THE year 2020 will go down as the worst financial year in the history of aviation because of the Covid-19 crisis, a fact that justifies an industry-wide government bailout, according to the International Air Transport Association.
IATA’s director general and CEO Alexandre de Juniac, former CEO of Air France, saw only one ray of hope. “Strong cargo operations and comparatively low fuel prices will also give the industry a boost,” he said.
“But every day of this year will add US$230 million to industry losses. In total, that’s a loss of $84.3 billion. That’s why government financial relief is crucial,” he said.
“Provided there is not a second and more damaging wave of Covid-19, the worst of the collapse in traffic is likely behind us. A key to the recovery is universal implementation of the re-start measures agreed through the International Civil Aviation Organisation (ICAO) to keep passengers and crew safe,” he said.
“Airlines will still be financially fragile in 2021. Passenger revenues will be more than one-third smaller than in 2019. And airlines are expected to lose about $5 for every passenger carried. The cut in losses will come from re-opened borders leading to increased volumes of travellers.
“That will translate into strong incentives for travellers to take to the skies again. The challenge for 2022 will be turning reduced losses of 2021 into the profits that airlines will need to pay off their debts from this terrible crisis,” he said.
Reuters: China to be self-reliant in IMO-compliant fuel – official
Chinese refiners have the capacity to produce 18.1 million tonnes of low-sulphur fuel oil (LSFO) this year, which would make the country self-sufficient in the new shipping fuel, an official with state major PetroChina said on Monday.
Ship & Bunker: Petrobras low Sulfur Focus Fuels Exports’ Rise
Big monthly increase over a year ago.
Ship & Bunker: Singapore Bunker Margins Almost Double in a Week
The premium for delivered very low sulfur fuel oil in Singa
pore over local cargo prices jumped to $25.72/mt on Friday, from $13.98/mt a week earlier.
Ship & Bunker: Singapore Sees Marginal Decline in Bunker Demand in May
Total demand at the world’s largest bunkering hub fell to 3.925 million mt in May, down by 2% from a year earlier and by 4.6% from the previous month.
Bunkerworld: EIA says total US ULSD stocks draw for first time since March
Ultra low sulfur diesel stocks in the US drew for the first time since the week that ended March 27, falling 1.22 million barrels to 160.78 million barrels during the week that ended June 12, US Energy Information Administration data released June 17 showed.
Bunkerworld :TENDER DATA: India’s HPCL sells HSFO loading July 6-8 from Mumbai
HPCL is an occasional seller of high sulfur fuel on a spot tender basis, according to market sources.
Bunkerworld: S Korea marine fuel 0.5%S differential plunges to 10-month low on weak demand
Poor demand for delivered marine fuel 0.5%S in South Korea has pushed its differential against the FOB Singapore 10 ppm gasoil assessments to a 10-month low of minus $45.35/mt on June 17, S&P Global Platts data showed.
Bunkerworld: Bunker fuel trader Glander sees FY2019-20 revenues soar amid IMO 2020 transition
Glander International Bunkering reported a 19.4% rise in total revenue in its 2019-20 fiscal year amid an eventful year for the bunker industry, the marine fuel trader said in a statement June 18.
Bunkerworld: OIL FUTURES: Crude rises as OPEC+ compliance hopes overshadow virus risks
Crude futures settled higher June 19 as the market shrugged off concerns of a coronavirus pandemic resurgence amid tighter supply outlooks.
Bunkerworld: Bunker Fuels Need to be Treated Cautiously as Dangers for Engines Can Lurk in Low Sulphur Products
As the saying goes ‘There’s no such thing as a free lunch’, and that seems to be the case with the International Maritime Organization’s mandatory legislation on the sulphur content allowable in marine fuels, at least according to specialist fuel treatment firm Aderco.
Aderco has recently released a new fuel guide intended to improve fuel performance and prevent damage to maritime diesel engines. The report follows a series of tests conducted in Belgium and Singapore on low sulphur fuels over recent months. The authors claim that the tests show that incorporating a fuel additive can help mitigate problems such as commingling whilst improving fuel stability, reducing sludge and removing water from the new fuels.
Khaleej Times: Pandemic forces ship owners to shelve anti-pollution gear
Ship owners are postponing or cancelling the installation of “scrubbers” that extract harmful sulphur emissions from their vessels as the coronavirus pandemic tightens finances.
Regulations from United Nations agency the International Maritime Organization (IMO), which took effect in January, were viewed by the oil and shipping industries as one of the first worldwide efforts to enforce environmental change.
Khaleej Times: Three Steps for a Smooth Transition to IMO 2020: Preparation, Flexibility and Timing
During late 2019, the maritime industry was gearing up to IMO 2020. The logistical complexity and financial repercussions were going to be huge. While living and working through this step change, Hafnia Bunkers found that preparation, flexibility and timing were all essential for a smooth, efficient transition into this new reality.
22 Industry insights into bunkering and rates, interestingly not everyone agrees to how rates will fair over the coming months.
US Bunker Demand Drop “as Much as 30%” Globally, both larger ports and larger players fairing better than their smaller counterparts, says IBIA. Ship & Bunker read in full https://shipandbunker.com/news/world/698867-us-bunker-demand-drop-as-much-as-30
Integr8 Notes Bunker Prices Declining Relative to Other Refined Products. While spreads between products may be heading back towards previous levels, the bunker market should not expect outright prices to do the same yet, according to Integr8. Ship & Bunker read in full https://shipandbunker.com/news/world/921684-integr8-notes-bunker-prices-declining-relative-to-other-refined-products
Oil Up On OPEC Hopes As Virus Declines and Demand Builds Dominate The Business Landscape. Russia even suggests a crude shortage could occur next month. Ship & Bunker read in full https://shipandbunker.com/news/world/282194-oil-up-on-opec-hopes-as-virus-declines-and-demand-builds-dominate-the-business-landscape
High MGO bunker prices at Colombo pushes demand to Indian ports. “We are still receiving steady interest for MGO because of the lower prices in Mumbai,” said a bunker supplier in Mumbai. In Full https://www.bunkerworld.com/news/157194
Singapore gasoil/LSFO spread slides from 6-month high on returning marine fuel demand. The Singapore low sulfur swaps market has been gaining strength recently after a pretty quiet May when demand was muted, a trader said. https://www.bunkerworld.com/news/157193
Oil edges higher, but remains under pressure from OPEC+ uncertainty. Stepped-up stimulus efforts further supported demand outlooks, placing a floor under oil prices. In Full https://www.bunkerworld.com/news/157204
HES Wilhelmshaven Tank Terminal starts up LSFO unit. HES Wilhelmshaven Tank Terminal (HWTT), Germany’s largest independent liquid bulk terminal, has started up its low sulphur fuel oil (LSFO) production unit, with a capacity of 2.5m t/y. https://www.tankstoragemag.com/2020/06/04/hes-wilhelmshaven-tank-terminal-starts-up-lsfo-unit/
Thailand bunker supply tightens on run cuts, rise in domestic demand: sources. Bunker fuel supply in Thailand has tightened since refiners are cutting run rates, while domestic bunker demand is rising amid easing lockdowns, market sources said on June 3. In Full https://www.bunkerworld.com/news/157191
Bunkering body eyes spread of bunker licensing systems at hubs. Advocates of the system say it provides a more consistent standard of service. S & P Platts Blog post here https://www.bunkerworld.com/news/insight/157177/Tom-Washington/Bunkering-body-eyes-spread-of-bunker-licensing-systems-at-hubs
Crude prices creep higher on OPEC+ extension optimism. Russia has indicated it supports at least extending the reductions by one month through July. In Full https://www.bunkerworld.com/news/157180
Jiujiang Petrochemical joins Sinopec’s foray into producing 0.5% sulfur fuels in China. Domestic refiners continue to ramp up supply, lower China’s dependency on imported bunkers. https://www.bunkerworld.com/news/157168
Singapore’s LSFO-HSFO spread narrows to 1-month low amid tepid demand. More competitive bunker prices at other Asian ports remains key factor. More here https://www.bunkerworld.com/news/157170
Record Monthly Gains For Crude As Demand Continues To Grow Worldwide. But analysts warn that demand recovery will still be long and painful. Read in full https://shipandbunker.com/news/world/520565-record-monthly-gains-for-crude-as-demand-continues-to-grow-worldwide
Indian Bunker Suppliers Lower Prices to Take On Sri Lanka. Over the past two weeks the discount for very low sulfur fuel oil at Mumbai to Colombo’s levels has widened by $21/mt, reaching $42/mt on Thursday, according to Ship & Bunker pricing. Ship & Bunker read in full https://shipandbunker.com/news/apac/873041-indian-bunker-suppliers-lower-prices-to-take-on-sri-lanka
Less Advance Warning Needed for Spot Bunker Sales as VLSFO Availability Improves. Integr8 is now allowing a lead time of around 8.5 days on average for VLSFO stems, down from 10 days at the start of the year but still much higher than the 5-6 days needed for high sulfur fuel oil (HSFO) in the past. Ship & Bunker read in full https://shipandbunker.com/news/world/541406-less-advance-warning-needed-for-spot-bunker-sales-as-vlsfo-availability-improves-integr8
Bunkerspot: EUROPE: HES Wilhelmshaven begins LSFO production
HES Wilhelmshaven Tank Terminal in Germany has begun the operation of its low sulphur fuel oil production unit, which has a nameplate capacity of around 2.5 million tons per year.
Fathom.world: NAMEPA launches maritime sustainability passport Award: Cargill gets first
On the occasion of World Oceans Day, NAMEPA (North American Marine Environment Protection Association) has launched the first known comprehensive CSR/ESG (Corporate Social Responsibility/Environment, Social, Governance) program designed expressly for the maritime industry, with its corresponding “Maritime Sustainability Passport” (MSP) awarded to companies, organizations and individuals who meet the requirements of the platform. The program encompasses the three pillars of CSR/ESG: corporate governance, environment and the human element. The launch was designed to coincide with World Oceans Day.
Fathom.world: “Realizing Zero-emission Waterborne Transport to the benefit of future generations”
A partnership comprising key players within the European waterborne transport sector, working together within the Waterborne Technology Platform 1 , propose a new Research and Innovation Partnership which over a period of seven years will implement R&I which will by 2030 demonstrate the feasibility of zero-emission waterborne transport applicable for all main services and ship types.
Fathom.world: Aker BP and Yxney Maritime to chase offshore emission cuts
Press Release: Maress will enable Aker BP to get a detailed insight into the fuel consumption and emissions from the fleet of advanced offshore vessels operating on the Norwegian Shelf. The Maress software provides a foundation for making informed and data-driven decisions on how to decarbonize operations.
VPO: LUKOIL’s ECA-compliant cylinder oil retains approval from major OEMs
LUKOIL’s NAVIGO MCL Ultra remains one of few low BN cylinder oils that still have a valid ‘No Objection Letter (NOL)’ with all major OEMs.
Recently a leading OEM withdrew their approvals for almost all low BN oils in the market, while NAVIGO MCL Ultra has retained its status, and continues to be fully approved by all other major OEMs.
Bunkerspot: GLOBAL: Total signs up to the Getting to Zero Coalition
‘As a major energy player, Total is already developing cleaner fuels for the maritime industry – we share the ambition to get to net-zero emissions by 2050, together with society, for our global operations,’ says Patrick Pouyanné, President and CEO of Total.
The Getting to Zero Coalition is aiming, through its members, at getting commercially viable deep-sea zero-emission vessels powered by zero-emission fuels into operation by 2030.
Total said that it would contribute to the Coalition’s focus areas, including fuels, marine lubricants, and ship zero-emission technologies.
Ship & Bunker: Container Line CMA GCM Continues to Waive Low Sulphur Surcharge
French container line CMA GCM will continue to waive its low Sulphur surcharge designed to pass on the higher fuel costs for very low Sulphur fuel oil (VLSFO) to its customers, the company said Wednesday.
20 April – 16 stories in our News Round-Up this week, including the effect of Covid-19, Scrubbers and Low Sulphur fuel the economics.
Sulfur Out, Scrubbers In
IMO 2020 marks the start of shipping’s journey toward sustainability.
When it comes to environmental pollutants, carbon dioxide is public enemy number one. Yet new regulations from the International Maritime Organization (IMO) target a different toxic molecule: sulfur dioxide.
Monitoring compliance on the backburner
The Covid-19 pandemic is masking the true picture of sulphur 2020 compliance, according to maritime consultancy Hill Dickinson.
GLOBAL: Teekay reiterates IMO 2020 compliance strategy; still says ‘no’ to scrubbers
In its 2019 Sustainability Report published this week, Teekay says, ‘The scrubber in its present form is not an optimal solution to deal with the stringent and growing limitations to sulphur emission.
AMERICAS: NYC Ferry takes delivery of low-emission ferries
Hornblower’s NYC Ferry operation has taken delivery of two low-emission, Tier 4 compliance passenger ferries designed by Incat Crowther.
Ultra-low sulfur diesel is entering into competition with jet fuel and gasoline for floating storage as onland locations across Europe reach capacity amid a sharp fall in diesel demand and a very steep contango making the economics potentially workable, according to industry sources.
The fuel oil swap product comparing high sulfur fuel oil values in Northwest Europe against its Mediterranean counterpart, known by many as the Med/North, hit record lows Wednesday as HSFO came under pressure from falling bunker demand.
Argentina’s use of oil refining capacity rose to 80.1% in February from 71.7% in the year-earlier month, as rising local crude production made more supplies available for processing, a government report showed Thursday.
How 2020 sulphur rules are turning out
One of the biggest concerns brought about by 2020 sulphur rules is unexpected – the availability of traditional fuels at traditional prices. There are also concerns about mixing non compatible fuels and decreased lubricity, writes Neil Graham, technical director of Royston.
Carbon dioxide emissions under the EU Emissions Trading System fell by an indicative 8.9% in 2019 from the previous year, according to an analysis of initial figures released by the European Commission Wednesday. https://www.bunkerworld.com/news/156857
Monjasa reaps fruit from IMO 2020 preparations
Danish bunker company Monjasa reported an improved business performance on the back of the sulphur cap regulation that entered into force on January 1, 2020, marking a global transition of ships to cleaner fuels. https://assafinaonline.com/maritime-news/assafina-news/offshore-2/monjasa-reaps-fruit-from-imo-2020
Major shippers like Lego and Ikea demand climate action after coronavirus
Some of the biggest customers of container lines, like Nestlé, Lego and Ikea, demand that politicians prioritize climate change mitigation once the corona pandemic is beaten. And not to do as they did after the financial crisis, the companies emphasize.
The VLSFO price spread between the most and the least expensive of the top four bunker ports narrowed by $7.50/mt to $23/mt on Monday.
Asia LSFO market draws clean fuel feedstock on flagging gasoline demand
The Asian low sulfur fuel oil market is drawing in feedstocks for blending into the marine fuel 0.5% pool that typically go into making clean fuels like gasoline, especially low sulfur vacuum gasoil, market sources said Tuesday.
Bunker fuel inspections expected to drop as coronavirus measures take center stage in shipping
The transition to the International Maritime Organization’s global low sulfur mandate and the high sulfur fuel oil carriage ban has been relatively smooth so far but inspections are set to drop as the focus has shifted to containing the coronavirus’ spread, with safe bunkering practices, crew changes and continuity of the global supply chain in shipping receiving more attention, sources say.
Coronavirus’ spread hurts scrubbers outlook in short run: EGCSA
The coronavirus pandemic has created a grim outlook for scrubbers in the short term as some shipowners prepare to divert their capital for other uses while a few defer planned installations either due to a narrowing high/very low sulfur fuel oil spread or a shortage of manpower at shipyards, Exhaust Gas Cleaning Systems Association Director Donald Gregory said in an interview with S&P Global Platts. https://www.bunkerworld.com/news/insight/156832
Carriers cancel low-sulphur surcharges as fuel prices drop – along with demand
Container spot rates from Asia to Europe remained stable this week and, having withdrawn around a third of headhaul capacity for April, carriers will hope they have done enough to match the collapse in demand.
COVID-19 and the unsung heroes – our seafarers
Javed Ali and Sarah Barnes highlight some key points to assist shipowners in protecting their seafarers’ mental health during the unprecedented COVID-19 pandemic.
It will be difficult to ascertain a full picture of how well the international shipping industry is complying with the new sulphur 2020 environmental legislation and judge the effectiveness of enforcement measures until sometime after the Covid-19 pandemic has receded, says maritime law specialist Hill Dickinson.
Introduced on January 1st this year, the implementation of Regulation 14.1.13 of Marpol Annex VI, was a key issue for the shipping industry, particularly in respect to how the sulphur cap was being observed and enforced. The horizon issue was the Carriage Ban, effective on 1 March 2020, which prevented any vessel not fitted with an exhaust gas cleaning system from carrying marine fuel with a sulphur content in excess of 0.50% m/m for use on board.
Beth Bradley, a Partner with Hill Dickinson, explained: “While a few issues arose concerning the quality of the low sulphur fuel, particularly some blended fuels having a propensity to sediment, and around marginal breaches of the cap, the implementation of the global sulphur cap was progressing smoothly with reports of high levels of compliance.
“Three months on and the disruption to international shipping caused by Covid-19 has pushed sulphur cap issues well and truly from the headlines. Regulation 14.1.3 remains in force – however, where Port authorities globally are prioritising health and the movement of freight, enforcement action will perhaps be less of a priority.”
The impact of the pandemic has led to serious delays to existing orders for the retro-fitting of exhaust gas cleaning systems, particularly for those vessel where the work was to take place in Chinese shipyards, or to cancellations as owners and operators seek to cut costs.
In addition, the collapse in the oil price has eroded the price differential between high sulphur and low sulphur fuel oil, making the immediate prospect of a larger uptake of exhaust gas cleaning systems doubtful, particularly if prices remain low for a significant period of time.
The UK’s Maritime and Coastguard Agency (MCA) recently announced that it was suspending vessel checks for compliance with low sulphur fuel regulations in order to keep freight moving, although it made clear that it will still inspect vessels where information is received indicating that an inspection would be appropriate. This is unlikely to be the last such announcement, predicts Ms Bradley.
Ms Bradley commented: “While the sulphur cap and the carriage ban remain in force such that owners risk enforcement action if they carry marine fuel with a sulphur content in excess of 0.50% m/m for use on board, the disruption caused by Covid-19 may reduce that risk where port state control is under pressure on other fronts. It also will make it difficult to ascertain a full picture relating to compliance and enforcement until sometime after the pandemic has receded.”
Source: Hill Dickinson