Ship owners and ship managers in Cyprus are bracing for new emission rules that kick-in worldwide from January 2020, with the global umbrella group International Chamber of Shipping saying that the industry will need to detach itself from fossil fuels ahead of ambitious decarbonisation targets set for 2050.
“The 2020 global sulphur cap will be the regulatory game changer of the decade with profound implications for the economics of shipping,” ICS Chairman Esben Poulsson told members of the shipowning lobby in London.
“But there are even more profound changes to come. We are rapidly moving into a multi-fuel future to be followed we hope, in the 2030s, by the arrival of commercially viable zero CO2 fuels suitable for global application.”
As the 1 January, 2020 deadline for the sulphur cap approaches, ICS members meeting in London reviewed progress in persuading the UN International Maritime Organisation (IMO) to take measures to address expected implementation problems.
This includes outstanding safety and fuel compatibility issues associated with the use of new 0.5% sulphur blends and continuing uncertainty over the availability of compliant fuels in every port worldwide, a particular challenge for tramp trades.
The ICS board concluded that it will be vital for the IMO Marine Environment Protection Committee (MEPC) to complete this work at its meeting in May, as shipowners begin ordering compliant fuels.
A Cyprus Shipping Chamber official told the Financial Mirror that despite the concerns raised by the shipping industry in relation to safety, quality, compatibility and availability of the new fuels that will be introduced into the market, “the Chamber supports and is committed to successfully implementing the new sulphur limit”.
“The decision on how to comply with the requirement is a commercial one and it is up to each company to assess its fleet and make the appropriate decisions.”
Deputy Minister for Shipping Natasa Pilides made similar comments during a press briefing last week to mark the first anniversary of the junior ministry’s establishment.
“The sulphur cap will be regulated by the installation of scrubbers on board ships and we will accept all proposals set by the IMO,” Pilides said.
“As the authority that will supervise the specific regulations, and the CO2 emissions in a few years after that, we are ready to adopt all the necessary procedures, depending on what option shipowners choose to reduce emission levels,” she added.
“While fuel suppliers must play their part in providing sufficient quantities of safe and compliant low sulphur fuels, shipowners must urgently prepare their ship specific implementation plans for 2020,” said ICS Chairman Poulsson.
“This should be carried out using the IMO template adopted at the industry’s request and the detailed advice prepared by ICS which we have just updated to take account of other recent IMO decisions. This will be vital to reducing the possibility of teething problems or in the event of initial Port State Control difficulties due to factors beyond the shipowner’s control.”
Green ships
The CSC official explained that the IMO has been regulating emission levels from shipping – such as sulphur oxides (SOx), nitrogen oxides (NOx), ozone-depleting substances (ODS), volatile organic compounds (VOC) and shipboard incineration – since the 1960s.
To address air emissions from shipping in 1997, the IMO adopted Annex VI to the International Convention for the Prevention of Pollution from Ships (MARPOL Convention) that entered into force on 19 May 2005.
Under the revised MARPOL Annex VI, the IMO MEPC decided that as of January 1, 2020, the global sulphur cap will be reduced from the current 3.50% to 0.50% m/m.
Under the new sulphur limit ships will have to use fuel oil onboard with a sulphur content of no more than 0.50% m/m and from 1 March 2020 ships will not be allowed to carry non-compliant fuel onboard. A company can, however, continue to carry and burn onboard fuel oil with content higher than 0.50% if they have fitted on board alternative approved equipment, such as scrubbers.
The CSC official added that the various methods to be implemented by ships for compliance with the new sulphur limit include the switch from high-sulphur fuel oil (HSFO) to marine gas oil (MGO) or distillates; the use of very-low-sulphur fuel oil or compliant fuel blends; the use of alternative fuels such as LNG or other sulphur-free fuels; and, to install exhaust gas cleaning systems (scrubbers), which allows operation on regular HSFO.
At the same time, the IMO is working to ensure that additional measures are developed to promote consistent implementation of the regulation, that measures are applied to support the implementation of the new sulphur limit and to ensure fuel oil availability and fuel oil quality.
“At the upcoming 74th MEPC session in May, it is expected that a number of guidelines and revised regulations will be implemented by IMO member states to assure consistent implementation and global availability of the new sulphur limit,” the CSC official said, adding that at this stage it is not anticipated that an extension of the 1 January 2020 date will be considered by the IMO.
“To achieve successful implementation, the fuel suppliers must ensure making available globally sufficient quantities of safe and compliant fuel well before 1 January 2020. The Chamber believes that it is vital for countries to collect and report as soon as possible to the IMO on the availability of compliant fuel, cases where fuel oil is of unacceptable quality and details of safety incidents where fuel oil quality is identified insufficient.
“This data then needs to be properly analysed by the IMO to inform any future discussions and decisions. The information collected should also be made available to the industry to safeguard the safety of seafarers and ships,” the CSC official said.
With regard to achieving the ambitious greenhouse gas reduction targets agreed by IMO last year, including a 40% efficiency improvement by 2030 and a 50% total cut in the sector’s greenhouse gas (GHG) emissions by 2050, the ICS board also endorsed the finalisation of proposals to IMO on short term measures.
These include tightening of the Energy Efficiency Design Index (EEDI) for new ships – which already requires ships built in 2025 to be 30% more efficient than those delivered before 2013 – as well as proposals for a ‘Super SEEMP’ whereby existing Ship Energy Efficiency Management Plans could be subject to mandatory external audits, probably as part of the ISM Code.
“We need IMO to make progress with short term GHG reduction measures as soon as possible to achieve measurable additional GHG reductions by 2023, in addition to the 8% total reduction already achieved by the sector since 2008, despite a massive increase in maritime trade over the same period,” Poulsson said.
“But while these short term measures are very important we want the IMO to move on to developing the critical long term measures that will truly help the industry to decarbonise completely.”
