One of the greatest challenges facing shipowners is how to comply with new environmental regulations adopted by governments by IMO. The International Chamber of Shipping ICS is concerned about the safety of compliant fuels and possible new regulations looming
The immediate challenge is planning for the implementation of the 0.5% global sulphur in fuel cap on 1 January 2020[ds_preview]. There are still big questions as to whether or not oil refiners will be able to supply adequate quantities of compliant fuel. Or the extent to which they may satisfy demand using 0.1% distillate or with new 0.5% sulphur products including blends.
But when we pass the implementation date, only a relatively small number of ships will be using alternative compliance options such LNG or scrubbers. The vast majority will have to comply using low sulphur fuels.
ICS is seeking clarity from governments on a number of technical issues to avoid compromising safety or unfairly penalising individual ships. At a special IMO meeting on sulphur issues in July, ICS co-sponsored a number of proposals to help ensure smooth and consistent implementation of the sulphur cap.
Although there is still much work to be done, we think these recent IMO discussions were positive. Most important is that governments have acknowledged the safety concerns raised by industry about the use of compliant fuels including possible incompatibility. The International Maritime Organisation has now agreed that these critical issues should be urgently addressed by the IMO Maritime Safety Committee in December 2018.
ICS has also greatly welcomed an important statement to IMO made by the International Standardisation Organisation (ISO) which has said that the existing industry standard for marine fuel oils, ISO 8217, already addresses the new 0.5% fuel blends that will be used by many ships to comply in 2020. But it will be vital for shipowners to have confidence that new fuels will indeed be safe and compatible before taking delivery, which they will need to start doing several months in advance of January 2020.
During last month’s IMO meeting on the sulphur cap, it was again made clear that there is absolutely no possibility that the legal date of implementation will be postponed. It is therefore of the utmost importance that shipping companies and charterers proceed with their implementation planning without delay.
The other major challenge of our age is reducing CO2. In April 2018, IMO adopted a high level strategy for the further reduction of shipping’s greenhouse gas emissions. The result is a truly ground breaking agreement – a »Paris Agreement for shipping« – that sets a very high level of ambition. ICS is confident this will give the industry the clear signal it needs to get on with the job of developing zero CO2 fuels, such as hydrogen or batteries using renewable energy, so that the entire sector will be in a position to decarbonise completely, consistent with the 1.5 degree climate change goal.
The IMO objective of cutting the sector’s total greenhouse gas by at least 50% by 2050, as part of a continuing pathway of further reduction, is very ambitious indeed, especially when account is taken of current projections for trade growth.
A 50% total cut by 2050 can realistically only be achieved with the development and widespread use, by a large proportion of the fleet, of zero CO2 fuels. If this goal is successfully met, the wholesale switch by the industry to zero CO2 fuels should therefore follow very swiftly afterwards.
Most importantly, the new IMO strategy includes a list of possible candidate measures to achieve further CO2 reduction, including some additional short term measures that could be ready for implementation before 2023.
This list of candidate measures contains a number of proposals by governments for potential new regulations, some of which may prove controversial.
These include the possibility of mandatory speed restrictions or (as the industry would prefer) speed optimisation measures. The list also includes the possibility of operational indexing of individual ships – something to which ICS is completely opposed. Less controversially, the list also includes consideration of further improvements to the existing IMO Energy Efficiency Design Index for the construction of future ships. What is most important is that the IMO agreement will be sufficient to discourage those – such as the EU – that mistakenly advocate regional measures which, as well as being very damaging to global trade, would not be effective in helping the international shipping sector to further reduce its total CO2 emissions are already about 8% lower than in 2008 despite a 30% increase in maritime trade.
As a result of this historic IMO agreement, the International Chamber of Shipping now expects discussions at IMO to begin in earnest on the development of additional CO2 reduction measures, including those to be implemented before 2023. ICS is currently developing proposals for short term CO2 reduction measures which we are submitting to the next round of IMO CO2 discussions this October.
Simon Bennett
