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ROUND TABLE LOOKS AT LOW SULPHUR FUEL CHALLENGES

Monday, March 9, 2020 

BIMCO reports that a recent Round Table discussion held in Rome, between heads of international shipping associations BIMCO, Intercargo, the International Chamber of Shipping (ICS) and Intertanko, concluded that the IMO’s expected 77% drop in overall sulphur emissions from ships looks highly likely.

The meeting exchanged members’ experiences with the implementation of IMO’s 2020 global sulphur regulations, expected to result in a drop in emissions equivalent to an annual reduction of approximately 8.5 million tonnes 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.

BIMCO, Intercargo, ICS and Intertanko are all cautiously optimistic about the ability of shipowners to adapt to the regulations. While the industry still needs to build experience with new fuels, the requirement for ships to drastically cut sulphur emissions has been a change of a magnitude never before attempted on a global scale. The new rules have, however, caused 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.”

Another point made was that despite announcements regarding how few fuel oil non-availability reports (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 launched a survey to gain a greater understanding of fuel oil quality and possible safety implications and encourage all shipowners and operators to participate.

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