THIS IS NOT A CASE OF WAITING AND HOPING: THIS IS 2020 WE’RE TALKING ABOUT!

We keep reading and being told that the IMO 2020 sulphur cap kicks off on January 1 2020. We are told that on that date compliance is the key to successful shipping and will kickstart another level of concern and action for the environment. The trouble is, if you are a ship owner, operator or manager, you don’t have less than 18 months to go before doing anything – by now you should be looking at your 2020 operations and how to ensure you are up and running with them well before the end of 2019. There is just one fly in the ointment – or rather two – and both are delaying concrete plans for compliance. Those two imponderables seem to be: when will the new fuel be ready and where will it be bunkered?

Look at your options for compliance: you can fit expensive scrubbers, burn the new fuels that will be on offer, try alternatives such as LNG, use new blended fuels or simply do nothing. But the  other solution is to use a recognised fuel treatment, an additive that will be cheaper, cost-effective and much easier to use. Choice is never a bad thing but in the case of IMO 2020 and all it stands for, the lack of clarity with less than 18 months to go is more than confusing. You begin to suspect that if the refining of the new fuel, the new blends and the availability of alternatives are not in place before the run in to the end of 2019, then non-compliance might be the only way forward in the initial period. Nobody is going to want to drift on this and yet unless we know more than just the chemical properties of these fuels we are not going to be sure this whole process will start smoothly. Blended fuels don’t seem at the moment to be inspiring too many people and thoughts of damage to engines and operations crop up in these conversations.

We are still saying that these issues need sorting and soon. Owners and operators need to know where and when: bunkers need to be identified and new fuels, blends and alternatives need to be made known. There is a lot we need and a lot the industry needs. Trouble is, to be ahead on planning ….. we need it now!Freight Ship

WHEN WILL THE DEMAND FOR HSFO DROP OFF?

The global sulphur cap comes with so many side issues – scrubbers, insurance and compliance – that ship owners and operators will need to be on their toes well before the regulations actually come into force on 1 January 2020. The lack of compliant fuel has always been seen as a major stumbling block in the short-term; where will the bunkers be that can offer this fuel and when will it be widely available? We have looked at this issue before: ships being stranded because lack of compliant fuel and concerns that some ships might have to use non-compliant fuel if there is an initial shortage – all these are worries ship owners and operators will face in the early stages of the compliance changeover.

One pressing thought: when will the demand for HSFO drop off? This will happen at some stage in 2019 and then the other question is – when do you start cleaning your tanks ready to accept the new fuel? Bunkering is the issue and so is the refining process. The demand for new fuel will almost certainly be high in the latter part of 2019 and the first month of 2020. The refining process and production of low sulphur fuel is placing demands on both sides of the industry. The trick for ship owners and operators is making the date for transition work in terms of cost and operational supply.

Recent report have suggested African bunker fuel markets could struggle to implement the IMO sulphur cap and the suggestion is this could be down to extensive competition from Mediterranean ports and the question of marine fuel quality. Once again the question of quality of the product rather than the initial price is the issue. Availability and compliance are not always natural bedfellows in any industry but when it comes to the 326 million cubic miles of ocean, the world’s ships are expecting more than a sign saying “No Fuel Today!”

2020 WILL BE A BURDEN BUT YOU NEED TO BE READY

The 2020 IMO sulphur cap will be a regulatory burden to many and yet the begrudging acceptance that many seem to have for it means it will be less of an issue in the long-term; the real issue is the short-term. Under this global cap ships will have to use marine fuels with a sulphur content of no more than 0.5 percent by Jan. 1, 2020. The aim is to  cut sulphur emissions in the shipping industry by 85 percent compared to today’s levels, with the aim of improving air quality and protecting the environment. The latest news is that following a meeting in February 2018, the IMO decided to move forward with a ban on the carriage of fuel oil on board ships that do not comply with the new low sulphur limit.But the real issue in this initial period concerns the supply side and the question is, will there be sufficient compliant fuel oil in bunkering ports to meet the demand for the same.

There is still no definitive word on this and despite the calming utterances from some of the refiners and the claims from some owners and ship managers that this is the most serious part of the equation, the industry is waiting for an answer that will mean calmer waters for all. There is no turning back from this and yet we are sailing towards a deadline with no real agreement on how much and where the new compliant fuel will be.

Many ship owners, operators and managers are still thinking about this and wondering how they will source the new fuel: this is a worry but have they thought about the preparation that is needed by the middle of 2019 to be ready to accept this low sulphur mixture? Think about tank cleaning and it brings a whole new dimension to timetables for compliance. The cap has a start date of January 1 2020: ship owners should have a compliance deadline of mid-2019 to be truly prepared.

Availability of low sulphur fuel a top concern for ship owners

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Not only remains uncertainty around the regulatory implementation of the global sulphur cap but also concerns regarding the low sulphur fuel availability in 2020 as highlighted during the Greener Shipping Summit 2017 in Athens, Greece. Kostas Vlachos, COO of Spiros Latsis-backed Consolidated Marine Management said that the changeover cannot occur “overnight” without serious economic consequences. “All stakeholders, regulators, refineries, owners, associations, makers and states, have to play a very important and critical role for the effective, efficient and soft implementation.”

Read more here: Seatrade Maritime