The International Maritime Organisation (IMO) has confirmed that
new a global cap on the sulphur content in shipping fuel will
be introduced on 1 January 2020. Since 1 January 2012, the global
limit has been 3.5% mass/mass (m/m) which will decrease to 0.5% m/m
when the new cap takes effect. The cap will apply to all fuel used
in main and auxiliary engines as well as boilers.
The shipping industry is the biggest emitter of sulphur oxides
(SOx). The new cap is intended to reduce the harmful impact that
shipping has on the environment and human health from emissions and
is expected to reduce relevant emissions by around 85%.
The implementation of the new cap is the result of the revised
Annex VI of the International Convention for the Prevention of
Pollution from ships (MARPOL) which was adopted in 2008. Annex VI
envisages a progressive reduction in global emissions of SOx and
nitrous oxides (NOx). MARPOL also introduced designated SOx
Emission Control Areas (ECAS) such as the Baltic Sea and the North
Sea areas. Since 1 January 2015, sulphur limit for fuel oil in the
ECAS has been 0.10% m/m. The new global cap will not affect the
emission cap already in place in ECAS.
Alternatives for the shipping industry
Instead of using low-sulphur compliant fuel oil, alternative
options available to shipowners include LNG gas; methanol
(currently used on some short sea services); and the use of exhaust
gas cleaning systems or 'scrubbers' which 'clean'
the emissions before they are released into the air. Shipowners
wishing to use scrubbers must have the approval of the vessel's
A report into the availability of low-sulphur fuel which was
delivered to the IMO prior to its meeting last week, confirmed that
there will be sufficient quantities of the fuel available to
shippers but did not focus on the purchase price. However, previous
reports estimated that the cost of low-sulphur compliant fuel could
be more than 50% higher than the cost of residual fuel (with a
sulphur limit of 3.5% m/m) which is currently used outside of the
ECAS. Much will therefore depend on whether oil prices increase or
remain the same. The implementation of the cap in 2020 may also
affect decisions on whether or not ships are sent for early
The IMO now has to consider how the new global cap will be
implemented and who will regulate it. Two requirements already
envisaged are: (1) ships using fuel oil must obtain a bunker
delivery note which sets out the sulphur content of the fuel oil;
and (2) ships must be issued with an International Air Pollution
Prevention Certificate by their flag state. The certificate would
confirm that the ship is using fuel oil which does not exceed the
applicable cap as documented by the bunker delivery notes or an
approved equivalent arrangement (e.g. scrubbers). Sanctions for
non-compliance with the new requirements will be established by the
state parties to MARPOL (i.e. flag and port states) and it is yet
to be seen how state parties propose to enforce the new regime.
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guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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