The latest revision of International Maritime Organization (IMO) regulations, known as IMO 2020, calls for cutting emissions of sulphur oxide (SOx) from ocean vessels to less than 0.50% m/m. This bold initiative, which goes into effect on January 1, 2020, will help reduce the environmental impact of the international shipping industry.
These IMO 2020 regulations require the lowest globally applied requirements of sulphur oxide emissions to date. Outside of designated emission control areas (ECAS), this is an 85% reduction from the existing limit of 3.50% m/m.
Four established emission control areas already have stricter regulations: Baltic Sea, North Sea, North American, and United States Caribbean Sea. In effect since 2015, within the control areas, the sulphur oxide emissions limit is 0.10% m/m. This will not change with IMO 2020 regulations.
As we look forward to the new year, it’s important to understand why these new regulations are taking place and how IMO 2020 will impact the global shipping market.
The effects of environmentally-friendlier fossil fuels
Ocean shipping, an efficient and cost-effective means for transporting international goods, accounts for more than 80% of global trade. That’s why it’ important to establish sustainable shipping practices for the future, especially for populations living close to ports and coasts.
The major environmental benefits to reducing marine fuel sulphur emissions to less than 0.50% include improved air quality, reduced risk for respiratory health, and reduction in acid rain and acidified water.
Very-low sulphur fuels can help reduce premature deaths
According to an IMO air pollution and energy efficiency study, over 570,000 premature deaths will be prevented between 2020 and 2025 by the introduction of these tighter sulphur oxide emission guidelines. Very-low sulphur fuel (VLSFO) creates less sooty air which reduces particulate matter in the air, resulting in fewer respiratory health problems.
Greenhouse gas emissions forecast to drop by 50%
Reducing sulphur emissions by utilizing low sulphur fuel oils in shipping vessels will help reduce greenhouse gas emissions by at least 50% by 2050 compared to 2008 requirements. That’s 8.5 million metric tons annually.
Several options available for reducing sulphur emissions
Rather than using heavy fuel oil or marine gasoil, ocean carriers have several alternatives for reaching compliance with IMO 2020 regulations. These options revolve around fuel choices or sulphur mitigation technology. Shippers must weigh the costs to upgrade with time required for compliance as well as ongoing fuel costs and equipment failure rates to meet the new marine sector emission standards.
The most efficient solution for ocean carriers looking to meet IMO 2020 compliance requirements will be to choose a low sulphur fuel, which requires costly investments in vessel upgrades. The initial quality of very-low sulphur fuel is likely to vary significantly according to local refinery configurations, as the current ISO specifications for petroleum marine fuels do not account for blended fuels. Carriers will need to watch for problems with incompatibility. It is imperative to keep different batches of fuels separate to avoid undesired reactions.
Install “scrubber” exhaust gas cleaning systems
A popular option for many ocean carriers will be to limit sulphur oxide emissions through exhaust gas cleaning systems, commonly known as “scrubbers.” These devices remove sulphur oxides from a ship’s engine and boiler exhaust, which allows an existing vessel to continue using sulphur fuel oil. But they will require an initial investment to install the upgrade equipment.
Not all flag states have approved scrubbers due to environmental concerns about exhaust gas cleaning system (EGCS) discharge. In fact, certain flag states, China and Singapore for instance, have already banned exhaust cleaning scrubber discharge within territorial waters. Carriers choosing this option will need to follow all flag state regulations.
Switch to alternative fuel options
Carriers can leverage several alternative fuel options, most of which are nonpetroleum based. Liquefied natural gas (LNG) is a credible option as it is nearly sulphur free and produces less nitrogen oxides (NOx) and particulate matter (PM) for reduced air pollution. Unfortunately, alternative fuel sources are not readily available on a large scale at this time.
The cost of IMO 2020 non-compliance
Individual countries are responsible for monitoring compliance and enforcing the new regulations. Both the state of registry of a ship and port states have rights and responsibilities to enforce compliance. According to the IMO, ships of all sizes will need to use fuel oil that meets the 2020 regulations.
At this time, the IMO does not allow exemptions to the regulations. That said, if a ship cannot obtain compliant fuel oil, they can complete a fuel oil non-availability report (FONAR). The port state control can take this into account when processing, but this does not qualify as an exemption for that vessel.
The new IMO 2020 regulations reducing sulphur oxide emissions to less than 0.50% will have a significant impact on today’s shipping industry. But it’s important to remember that these regulations are not the first sulphur oxide emissions standards. Previous requirements did not cause a significant fuel shortage or permanently increase prices.
For more information on navigating the challenges of IMO 2020, download our free guide, Preparing for IMO 2020. It’s also important to work closely with a third party logistics provider (3PL) like C.H. Robinson that offers a global suite of services with experts who are ready and able to solve your logistics problems.