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Industry players want more clarity on enforcement year for global 0.5% sulphur cap

Industry players want more clarity on enforcement year for global 0.5% sulphur cap
With the IMO regulation on global fuel sulphur cap looming by 2020 or 2025, industry players have called for more clarity on the enforcement year as signs are pointing to the earlier year of 2020.

A review was supposed to be up in 2018 to decide if the regulation will be enforced in 2020 or 2025 but a decision could be taken at the forthcoming IMO Marine Environmental Protection Committee (MEPC 70) meeting this month. If no decision is made at MEPC 70, the next meeting of MEPC 71 will be in May 2017.

“In looking at the latest global refinery capacity, they will not make it in time to produce enough 0.5% sulphur fuel for 2020,” Joshua Low, global head of trading, Maersk Oil Trading, told Seatrade Maritime News at the sidelines of SIBCON held in Singapore on Wednesday.

“My guess is 2020 but I think the industry has always been quite resilient and it will get itself into equilibrium,” he said. There will be immense challenge for the industry ahead as Low observed that he has not heard shipowners making significant or meaningful announcements on installation of scrubbers on their ships or retrofitting to suit LNG bunkering. “So the default way of compliance will be to blend the residual fuel with distillates to 0.5% sulphur content,” he said.

A major homegrown bunker supplier also told Seatrade Maritime News that there is a need for more clarity from IMO on this global sulphur regulation that has far reaching impact. While the industry can be coerced to comply with the regulatory requirements, he questioned if the costs incurred would be worth it.

With pressures from environmental groups and a CE Delft report recommending for 2020, a marine energy consultant said the industry has to be prepared for an early adoption of the 0.5% fuel sulphur cap regulation.

To help ease the transition to the global 0.5% fuel sulphur cap, International Bunker Industry Association (IBIA) has proposed a number of strategies, and one of them is the phasing in of the 0.5% sulphur limit for ships sailing in the Exclusive Economic Zone (EZZ) of Annex VI signatory countries, region by region and over a period rather than an instant change on a specific date so as too alleviate market distortion.

Other strategies include allowing exemptions for ships with contracts in place to fit abatement technology, confirming the issuance and acceptance of fuel oil not availability notices (FONARs) permitted under Annex VI, and allowing a period of adaption and monitoring before requiring and enforcing compliance.