I t remains anyone’s guess the impact the International Maritime Organisation’s sulphur cap will have on South African exports – but one thing is certain, it will cost more to move bulk cargo. Much of the focus of the IMO 2020 regulation to date has been on the impact on container vessels. Set to become effective on 1 January 2020, the new regulation caps global sulphur for marine fuels at 0.50%. This means vessels are required to use marine fuels with a sulphur content of no more than 0.50% against the current limit of 3.50%. Ship owners, ship operators and ship managers can either opt to use lower sulphur fuel or install Exhaust Gas Cleaning Systems (EGCSs), otherwise known as “scrubbers”. Experts FTW contacted all said this was important in the bulk context as it would create a differentiation between those vessels that were using lower sulphur fuel and those with scrubbers. According to the International Bunker Industry Association (Ibia) lower sulphur fuel will cost significantly more than high-sulphur fuel, which is used on vessels fitted with scrubbers. South African supply for coal and iron ore relies largely on Capesize and Panamax vessels although coal uses Supramax as well. It is big tonnage that all comes in ballast, according to a shipper who preferred not to be named. “Some Panamax vessels also carry grain, which adds cost. It will ultimately come down to which vessels have scrubbers and which don’t,” he said. Whilst bulk vessel fuel consumption is a lot lower than that of container vessels because they travel at slower speeds, IMO 2020 will impact the cost of bulk transport. This is critical for a country like South Africa, which exports some 130 million tonnes of coal and iron ore per annum. Internationally it seems owners of dry bulk ships, particularly large bulkers, are all opting for scrubbers, and investment into this equipment has run into millions of dollars. At this stage the message from bulk vessel owners is clear – no matter whether a vessel is scrubber-fitted or not, IMO 2020 will increase cost and it will be passed on to bulk shippers. According to Unni Einemo, Director of Ibia, there is continued uncertainty around IMO 2020, despite ongoing preparations across the maritime sector. Speaking in Cape Town, Einemo said it was necessary to reduce the maritime industry’s carbon footprint, making IMO 2020 nonnegotiable, but for all intents and purposes it would be increasing the complexity of the marine fuel supply chain.
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It is necessary to reduce the maritime industry’s carbon footprint, making IMO 2020 non-negotiable – Unni Einemo
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