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Clean ships

Sulphur cap

Shipowners

“From 1 January 2020 onwards, shipowners will have to use more expensive low-sulphur fuels or install expensive scrubber equipment. Keeping the playing field level is paramount – cheaters must not be allowed to make economic gains!”

Priority KVNR: to maintain a level playing field with upcoming stricter sulphur standards

ALP Striker towing Hilli FLNG from Singapore to North Sea
Nick Lurkin 150.JPG
Contact

 

Nick Lurkin
Climate and Environment

+31 10 2176 275
lurkin@kvnr.nl

Nathan Habers 150.JPG
Press inquiries

 

Nathan Habers
Public Relations

+31 6 5200 0788
+31 10 2176 264
habers@kvnr.nl

Context

As decided in 2016 by the International Maritime Organization (IMO), the maximum permitted amount of sulphur in ships’ emissions worldwide will be reduced to 0.50% from 3.50% from 1 January 2020 onwards. One of the options open to shipowners from 2020 is to switch to low-sulphur fuel. This is expected to be 70-100% more expensive than the currently-used Heavy Fuel Oil.

Other available options are the installation of exhaust gas cleaning systems such as scrubbers, or switching to cleaner alternative fuels (LNG, for example). However, for a substantial amount of ship owners, these are (still) not feasible options because they are not always technically possible or require significant investment.

In addition, there are numerous uncertainties regarding the implementation and enforcement of the stricter sulphur regulations. This is obviously of great importance, especially considering the potential market disruption that would occur if unscrupulous shipowners continue to use cheaper high-sulphur fuel is. This disparity would have a negative effect on the competitive position of honest shipowners as well as the state of the environment.

Finally, outside Europe in particular, it remains to be seen whether an adequate, qualitative and consistent supply of low-sulphur fuels can be provided. It is notable that oil producers cannot yet give a definitive answer on this subject.

The challenge

As mentioned above, it is important that there is a level playing field for all shipowners. Unscrupulous operators who (deliberately) do not comply with the sulphur regulations may not be allowed to make economic gains. To prevent this from happening, enforcement must be strict and sanctions must be fitting.

A good example of how to accomplish this has been suggested by the shipping sector itself. The proposed solution prohibits having fuel with a sulphur percentage higher than 0.50% on board after 1 January 2020. Exceptions to this rule would be if a vessel is equipped with a scrubber, or if it could be demonstrated that low-sulphur fuel was unavailable.

If no low-sulphur fuel is not available at in a particular port, a globally unified procedure must be implemented that shipowners can follow without being penalized. The IMO member states must provide clarity on this matter before 1 January 2020!

State of play - 18 April 2019

The KVNR is closely monitoring discussions within the IMO and is committed to guaranteeing the effective and impartial implementation and enforcement of global sulphur regulations by member states. It is expected that the next assembly of the IMO-Committee MEPC 74 will make decisions regarding the implementation and enforcement mid May 2019.