2020 emissions cap certain to cost owners more

There was unanimous agreement at a Sea Asia 2017 panel on Navigating Challenges: The Way Forward, with International Chamber of Shipping secretary-general Peter Hinchliffe's statement that "categorically", the deadline will not move, and that the cap on sulphur emissions will come into effect as scheduled in 2020.

In line with this, Hinchliffe gave a likely scenario of what would happen. Whether there would be sufficient supply of low sulphur fuel remained an unknown, he said but suggested that at the very least, there will be a price differential between the usual heavy fuel oil (HFO) and low sulphur fuel oil (LSFO), leading to a price spike for LSFO.

"If you want my gut feeling, I think there will not be enough fuel, but it will be relatively short-lived," Hinchliffe said. In addition, it would not be a problem of a lack of an absolute amount of fuel, but just a matter of having enough at the right location which will prove to be the disrupting issue.

To add to the concerns of ship owners is the continuing uncertainty of implementation of various abatement technologies between different jurisdictions, he said. For example it is unknown which countries will allow discharge water from scrubbers to be discharged into their port as well as reliability issues with different systems and increasingly higher unit prices for systems that have yet to ne operationally proven.

"One thing we do know is there is going to be a price differential between HFO and the low sulphur alternative and that's about the only thing you can hedge your decision on," Hinchliffe concluded.

With the tremendous amounts involved, Intertanko Asia Pacific manager and environment director Tim Wilkins pointed out that whatever solution regulators decide on must be kept relatively stable. Giving the example of making a firm decision on what is to be done with waste water from scrubbers, he said: "let's protect those owners who have gone ahead and invested for the right reasons".

Posted 28 April 2017

© Copyright 2018 Seatrade (UBM (UK) Ltd). Replication or redistribution in whole or in part is expressly prohibited without the prior written consent of Seatrade.

Vincent Wee

Asia Editor, Seatrade Maritime News

Whitepaper on UAE Storybox