With ramifications for shippers, the International Maritime Organisation (IMO) has ruled that from the 1st January 2020, the marine sector will have to reduce sulphur emissions by over 80%, by cleaning existing fuel systems (using scrubbers) or switching to more expensive lower sulphur fuels.

It is still not clear how IMO 2020 will play out. The expectation had been that most vessels would switch to the cleaner fuel from next January, but it now appears that more vessels than expected, including Maersk and Hapag-Lloyd, will eventually have scrubbers fitted, as operators and crew can use a fuel they know and are used to operating with and engines will be using a fuel they are used to.

While the possibility of a two-tier BAF, low-sulphur fuel or scrubber-fitted, cannot yet be discounted, a major shipping line chief is predicting that by the 1st January, only 6-7% of container ships would be fitted with scrubbers and would not need to use the new, low-sulphur fuels which lines are expected to start introducing as soon as late in the third quarter.

With the difference in price between bunkers currently in use and the new fuels possibly increasing by as much as $500 per tonne, he said lines would need to pass all the costs on to shippers.

Not surprisingly the global shippers forum take a contradictory view, with their secretary general stating that sustainable solutions to the environmental challenges faced by global shippers need to be found without stifling economic growth. A measure that will incentivise technical and operational measures to reduce CO2 and not simply pass on additional costs to shippers or significantly increase transit times.