Possibly the major preoccupation of the shipping industry will be the
IMO 2020 sulphur cap regulations effective January 1, 2020. Compliance with
this regulation requires that sulphur cap on marine fuel is 0.50%. And the
global commodity giants say that the shipping industry is not ready and
prepared for this IMO regulation.
“ Do you think the market is perfectly prepared? Absolutely not,” FT
reported Trafigura’s Ben Luckok, co-head
of group market risk as saying during the recent FT Commodities Global Summit
Speaking at the same event, FT
quoted Franco Magnani, chief executive of Eni Trading and Shipping as saying
there was still a lot of uncertainty
surrounding the position of the shipping industry on IMO2020 with
clarity over the number of vessels opting for scrubbers as their compliance
route a particular case in point.
Offering an answer to this was Bjarne Schieldrop , chief commodities
analyst at SEB who pointed to a report by him firm indicating 2,000 of an
18,000 strong group of crude, dry cargo and box ships would have scrubbers by
IMO, in its original estimate as part of the official fuel
availability study, had previously predicted
that world-wide there would be 3,800 scrubber equipped vessels.
Lourdes Rodriguez , executive director of trading at Respol,
meanwhile, said during the first two years
of the new sulphur cap compliant fuels will be the dominant choice for
ships. “Time is not enough to have a different solution” she reasoned.
The IMO 2020 sulphur cap being a matter of utmost concern for the
industry, many shipping-related international bodies have had detailed
discussions on it analyzing the pros and cons of the regulation with a primary focus on the feasibility of the
regulation being effectively implemented and the possibility of the industry
taking to full compliance. Almost all
discussions ended in suggestions not against the regulation which is not
desirable and possible but to ease the industry of the difficulties involved in
moving towards compliance. One suggestion was to postpone the year for making
the regulation effective in force from 2020 to 2025. Pushing back the
implementation to 2025, it was argued, would save the industry somewhere
between $30 billion and $50 billion a year; this idea was expressed by media
and communications manager at the International Bunker Industry Association
Unni Einemo said in the Platts conference in 2016.
The industry also pointed out the massive cost involved in getting
ready to comply with the regulation. The industry was not already in a
brilliant phase as it was before 2008.
Overcapacity and declining freight rates have turned the market
depressive. To the question ‘Why do it?’, the simple direct answer was human health.
It was pointed out that about 50,000 premature deaths occur in Europe alone
each year because of air pollution from shipping.