Shipowners Finally Waking up to Impact of IMO2020

Shipowners Finally Waking up to Impact of IMO2020

Shipowners are starting to seriously consider how their operations might be effected under the global sulfur cap on bunker fuel coming into force in 18 months’ time.

And to meet rising concern about the rule change’s adverse effects, mutual marine insurer North Protection and Indemnity club mounted an information day for its shipowner membership.

Anecdotally, the club’s deputy director Tiejha Smyth said the membership enquiries on the issue are up.

“There’s been a bit of a groundswell in enquiries on the impact of IMO2020,” she said speaking in London on Wednesday.

While uncertainties on bunker fuel composition and price post-2020 remain, Symth pointed to charterparties – the agreements between shipowners and charterers – as worthy of inspection in the light of the rule change on bunker fuel compensation.

Under a timecharter arrangement bunkers are paid for at the start of the contract to be sold back at the end. But with changes to fuel grades and composition, shipowners could find themselves out of pocket.

“All clauses [in the charterparty agreement] related to bunkers need to reviewed,” Symth siad.

This would include the terms used in a contract to describe bunker fuel. Low sulfur and high sulfur fuel oil have generally been understood to refer to distillates and 3.5% residual fuel respectively but those descriptors can longer be relied upon as multiple fuel types emerge, the executive added.

From the start of January 2020, all ships must use maritime fuel capped at 0.5% sulfur unless the vessel is equipped with emissions abatement technology that allows it to continue to use high sulfur product.

Protection and indemnity clubs provide third-party insurance to shipowners.


Survey: Shipping industry divided on top 2020 SOx solutions

The shipping industry is still considering several options for meeting the regulations of IMO’s global sulphur cap in 2020, according to a recent survey by The Strategy Works. Around 81% of senior technical managers from shipping companies and nearly 60% of lubricant makers and OEMs favour ultra-low sulphur fuel oil to comply with the sulphur limit. Scrubber technologies are the favourite choice of lubricant companies and OEMs with a 67% approval rate whereas only 41% of shipping company employees votes for scrubbers. Distillates fuels and LNG rank in third and fourth positions. Furthermore, the survey revealed fuel oil availability and price as the top concerns among the representatives of shipping companies.

Read more here: Marine Propulsion

ExxonMobil commits to work with shipping industry on multi-fuel landscape

The international oil and gas company ExxonMobil will still be engaged with the shipping industry as the market changes into a multi-fuel landscape under the global sulphur cap regulation from 2020. As Iain White, ExxonMobil Marine Fuels and Lubricants global marketing manager said ExxonMobil is going to be involved in making all the options of the multi-fuel scenario available including LNG, high sulphur fuel oil use with abatement technology, 0.1% and 0.5% sulphur fuel oil as well as blends and distillates.

Read more here: Marine Propulsion

Training – the hidden cost of environmental regulation

When thinking about how to comply best with the new regulations of the sulphur cap in 2020 not only costs for upcoming retrofits should be taken into account, but also the costs for necessary training. As for the LNG and scrubber option there will be some training needed with these as well, this should be addressed early, before any decision is made.

Read more here: ShipInsight