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Joint Media Release: “Implementation Challenges of 2020 Sulphur Cap”

Joint Media Release following the Meeting of the Chairpersons of the Round Table of International Shipping Associations in February 2020 in Rome.

Sulphur 2020

The Chairpersons of the Round Table of international shipping associations (RT) met in Rome in February to exchange their members’ experiences with the implementation of IMO’s 2020 global sulphur regulations.

From January 1, fuels used by vessels have been required to contain a maximum Sulphur content on 0.5%, down from 3.5%. The International Maritime Organization (IMO) expects that the new limit will mean a 77% drop in overall SOx emissions from ships, equivalent to an annual reduction of approximately 8.5 million metric tons of SOx. The four shipping associations welcomed implementation of the regulation which will be good for the environment and the health of coastal populations.

With the introduction of the new limits, initial strong price differentials for various fuel options were observed, with in places cheaper marine gasoil compared to low-sulphur fuel oils. At the same time, uncertainty remained about the worldwide supply of compliant fuels and concern about the safety and compatibility of fuel options.

Two months after the introduction of the sulphur cap for fuel used by ships, BIMCO, INTERCARGO, International Chamber of Shipping (ICS) and INTERTANKO are all cautiously optimistic about the ability of shipowners to adapt to the new regulations. While the industry has barely started its 2020 journey and still needs to build experience with the new fuels, the requirement for ships to use low sulphur fuel has been a change of a magnitude never before attempted on a global scale. Shipowners are playing their part, with the new rules causing genuine concerns over the ability for ships to find compatible fuels. Owners have been working tirelessly to ensure plans are in place to source Very Low Sulphur Fuel Oil (VLSFO) where needed and many ships have had to change bunkering ports.

Dimitris Falalios, Chairperson of INTERCARGO said: “We cannot forget that we are reliant on cooperation from across the entire supply chain. This includes fuel suppliers to standardise fuel blends, Flag States to report issues to the IMO as appropriate and for Coastal States to properly train their Port State Control (PSC) personnel.”

“Shipowners have been working tireless to comply with the challenging regulation, and we thank them for their commendable efforts. We believe this major change was both timely and needed, however, this does not mean it is without inherent risks. We are determined to address the environmental impacts of shipping so that we can continue to drive global trade sustainably.”

Another point made was that despite announcements regarding how few FONARs had been issued by Flag States, this did not represent a true measure of the lack of worldwide VLSFO availability since it did not reflect situations where owners had to wait or divert to find fuel. It also failed to reflect the extreme efforts shipowners were making to plan and find compliant fuels at their intended trading ports.

The “Round Table” leaders agreed that continued sharing of experience is paramount and will  be reported to IMO as appropriate. Flag States should also be encouraged to improve their reporting to IMO. While shipowners do their part to the best of their ability, all stakeholders should uphold their responsibilities including fuel suppliers, Flag and Port States, as well as charterers.

The four associations have also launched a survey to gain a greater understanding of fuel oil quality and possible safety implications and encourage shipowners and operators to participate.


Notes to Editors

The Round Table of international shipping associations (RT) consists of BIMCO, INTERCARGO, the International Chamber of Shipping (ICS) and INTERTANKO.

Attending the meeting were President Sadan Kaptanoglu and Secretary General & CEO Angus Frew from BIMCO; Chairperson Dimitris J. Fafalios and Secretary General Kostas G. Gkonis from INTERCARGO; Chairperson Esben Poulsson and Secretary General Guy Platten from ICS; and Chairperson Paolo D’Amico and Managing Director Katharina Stanzel from INTERTANKO.