With just 18 months to go to before the International Maritime Organisation’s 0.5% sulphur cap regulations kick in, there are increasing concerns that shipping lines do not have clear compliance strategies.
The deadline for the regulations, known as IMO2020, is January 2020. Mike Wackett, editor of the shipping news resource company The Loadstar, wrote in a blog last week that shipping lines’ “wait and see” approach to IMO2020 had investors worried – especially as ocean carriers had a track record of rolling out surcharges to cover additional costs and, ultimately, absorbing the extra expense into their freight rates.
A survey by maritime analyst Drewry found that while 66% of ship owners o believed the regulation would become enforceable as planned in 2020, 25% thought that the deadline would need to be postponed due to a lack of readiness. The Drewry survey highlighted concerns ranging from the availability of low sulphur fuel, scrubber installation capacity, LNG infrastructure, and potential further changes to legislation that would make it difficult to comply by the 2020 deadline.
A media spokesperson for the IMO told FTW that the shipping industry had known about the January 2020 implementation date since October 2016.
“Of course it is important that everything is done to ensure consistent implementation of the requirements,” she added, which was why the IMO was working to develop relevant guidelines. She said an inter-sessional group – under the auspices of the IMO Sub-Committee on Pollution Prevention and Response (PPR) – would meet from July 9-12 this year to work on these guidelines which included, amongst others, how vessels could prepare for implementation.
“By October this year, the Working Group will report directly to the Marine Environment Protection Committee (MEPC 73) on the development of ship implementation planning for 2020,” she said. She confirmed that IMO2020 compliance had a cost implication for the shipping industry.
“It is important to remember though that freight costs are a very small proportion of the cost to the end user. Seafreight is the most cost-effective way of transporting large quantities of goods and commodities around the world.”
She said IMO was working with member states as well as industry to identify and mitigate any potential transitional issues to enable shipping lines to meet the new requirements. FTW reached out to a number of shipping companies locally but none had responded by the time of going to print.
