The newly introduced IMO2020 fuel regulations are expected to increase costs by $1 billion according to an international shipping and container company.
Rolf Habben Jansen, Hapag-Lloyd CEO, said last week that although the new fuel regulations had pushed the shipping industry to combat climate change, they had also brought a host of new challenges for the industry to work around.
“The costs involved in converting vessels and using the new fuel will be high. Since the lion’s share of our fleet will sail with the new low-sulphur fuel oil, we expect additional costs of around one billion US dollars per year,” he said.
The International Maritime Organisation’s 2020 Sulphur cap, which came into effect on 1 January, restricts the shipping industry to fuel with a maximum sulphur content of 0.5%.
On top of IMO2020, the shipping industry is set to come under considerable pressure this year, with many organisations taking a hard stance against climate change.
“For example, with its ‘Green Deal’, the European Commission is considering extending emissions trading to the shipping industry. This means that shipping companies would have to pay for their CO2 emissions in the future,” said Jansen.
Despite this, Jansen added that he was optimistic about the future of the industry, reaffirming Hapag-Lloyd’s commitment to expanding its global reach.
“We will continue to invest heavily in digital products and services. And we will continue to concentrate on expanding our business in growth regions such as Africa, the Middle East and India.” – Bjorn Vorster
