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IMO upholds the 2020 date for global low sulfur marine fuel requirements

28 October 2016

The International Maritime Organization (IMO) has decided to uphold the 1 January 2020 implementation date for the next-stage reduction in the sulfur content of the fuel oil used globally by ships. The decision to implement a global sulfur cap of 0.50% (m/m) in 2020 was taken by the IMO during its Marine Environment Protection Committee (MEPC) meeting for its 70th session in London.

Further work to ensure effective implementation of the 2020 global sulfur cap will continue in the Sub-Committee on Pollution Prevention and Response (PPR), said the IMO. The current global sulfur limit in marine fuels, effective from 1 January 2012, is 3.5% (m/m).

“The reductions in sulfur oxide emissions resulting from the lower global sulfur cap are expected to have a significant beneficial impact on the environment and on human health, particularly that of people living in port cities and coastal communities, beyond the existing emission control areas,” said IMO Secretary-General Kitack Lim.

Regulations governing sulfur oxide emissions from ships are included in Annex VI to the International Convention for the prevention of Pollution from ships (MARPOL). Annex VI sets regulations to control emissions from ships, including SOx and NOx. The date of 2020 was agreed in Annex VI amendments adopted in 2008. However, the deadline was a subject to review—that had to be completed by 2018—to assess whether sufficient compliant fuel oil would be available to meet the 2020 date. If not, the date could be deferred to 2025. That review, commissioned by the IMO and conducted by CE Delft, was completed in 2016 and submitted to MEPC 70. The review concluded that sufficient compliant fuel oil would be available to meet the fuel oil requirements.

In its base case scenario, the CE Delft study forecasts that the global demand for marine fuel oil would reach 320 million tonnes in 2020, an 8% increase from the 2012 demand—according to the Motorship (the IMO intends to make the CE Delft report available to the public after MEPC 70). 70% of this demand would be for fuel oil with 0.1-0.5% sulfur, and 30% for oil below 0.1% sulfur. The study also projects that 3,800 vessels would have scrubbers installed by 2020, making available around 36 million tonnes of low sulfur fuel due to their continued use of heavy fuel oil. The uptake of alternative fuels, including LNG, was concluded to have an insignificant impact on marine fuel demand by 2020.

The findings of the CE Delft study were contradicted by a study commissioned by BIMCO—a shipping industry association—and conducted by Navigistics and EnSys Energy. The study predicted a big strain on markets, with major implications for the cost of light fuels, and called for a phasing-in of the rule. The industry has been experiencing a prolonged period of economic slowdown due to over-capacity in international shipping.

Under the new global cap, ships will have to use fuel oil on board with a sulfur content of no more than 0.50%, against the current limit of 3.5%. The interpretation of “fuel oil used on board” includes use in main and auxiliary engines and boilers. Exemptions are provided for situations involving the safety of the ship or saving life at sea, or if a ship or its equipment is damaged.

Ships can meet the requirement by using low-sulfur compliant fuel oil. Ships may also meet the SOx emission requirements by using approved equivalent methods, such as exhaust gas cleaning systems known as “scrubbers”.

The IMO, while setting marine emission and fuel quality regulations, does not establish enforcement mechanisms, such as sanctions or fines for noncompliance. The enforcement of the regulations is the responsibility of the individual State Parties of the IMO.

Source: IMO