From 1st January 2020, the maximum sulfur content in marine fuel, must necessarily go from 3.5% to 0.5%.
The decision was taken in October 2016 by the Commission for the Protection of the Marine Environment (MEPC) of the International Maritime Organization (IMO), revising the terms of Annex VI of the MARPOL Convention, adopted in 2009 and in force since 1st July 2010. The Commission also denied the granting of a 5-year extension for the entry into force of this new regime.
A limit placed with eminently environmental purposes and certainly less stringent than the one already in force since 2015 for the SECA areas (North America, the Baltic Sea, the North Sea, the US Caribbean), equal to 0.1%.
Shipowners will soon be forced to choose whether to use:
- IFO with 0.5% sulfur (0.5% Fuel Oil);
- MGO (Marine Gas Oil);
- High sulfur bunkers, installing on board Scrubber that allow the reduction of sulfur emissions up to a level corresponding to 0.5%;
- LNG (Liquefied Natural Gas).
The repercussions of this forecast are not overlooked by operators, not only on the shipping economy, but also on the refining industry, in terms of production and logistics.
Repercussions that indeed generate not few perplexities. The problems in which operators could incur choosing to use a bunker with a sulfur content of 0.5% are many. First of all, in terms of price, it has been estimated a surcharge of over 50% more than the current one (around 250 USD / mt), so the price of this fuel could be around 400 USD / mt in 2022; moreover, there are uncertainties not only on the availability on the market of a quantity of product sufficient to satisfy the new world demand but also for the logistics and distribution sector, generated by a sort of double regime, i.e. the simultaneous presence of a low product. sulfur content for new ships and high sulfur content for those that will use scrubbers. The absence of a technical specification of this product is also worrying, which may not be available before 2022.
However, if it is decided to use Scrubber (water or soda system), it is noted that the investment costs for these facilities (also in terms of crew specialization) are not particularly low and that the infrastructures for the disposal of waste and products resulting from the fume purification process, which can not be unloaded at sea but have to be stored on board and transferred to the reception facilities of the ports of destination of the ship, are not yet available in many ports. It is recalled that the scrubber option has already been banned in the State of California.
Unlike the case of converting the ship’s power to LNG, an intrinsically clean fuel, which allows compliance with the Marpol directives and does not produce sludge (sludge or residual sludge) in the tanks and visible smoke at the ship’s unloading. However, the use of LNG as bunker fuel poses a number of technical problems that are related to the physical properties of the fuel itself in terms of volume. Another criticality is represented by the lack of reference legislation, as there is currently no code recognized worldwide for the design of LNG-powered ships.
Given the short time that separates us from 1st January 2020, it is therefore necessary that all IMO States immediately start the procedures to organize in the most effective way the controls and checks on the sulfur content of the fuels used from ships and ensure uniform application of the legislation to avoid any distortion of international competitiveness.
A noteworthy commitment also for the Maritime Authorities and Coast Guards, which will have to verify compliance with the regulations through the Bunker Delivery Note which will report the sulfur content of the bunker delivered to the ship. Of course they will be able to sample the product used to carry out the necessary analyzes or they can use other techniques to identify potential violations also by means of drones that analyze in real time the quality of the fumes emitted. In case of violations, sanctions are provided, whose extent remains the responsibility of the State where the port that carried out the checks is located, or the flag State of the controlled vessel.
Considering the difficulties and the regulatory and environmental uncertainties both on the new bunker, on the scrubbers and on the LNG, some shipowners have indicated their intention to employ MGO (LMSGO).