An analysis of available solutions for commercial vessels to comply with IMO strategy on low sulphur

June 30, 2020 IMO

The IMO’s lower sulphur limit for marine fuels effects good or bad for the shipping industries, countries and other groups. Advantages of IMO 2020 are making strongest benefits of public health and encourage development of green power generation. However, It also brings about adverse effects: Large majority of commercial fleet in the world will switch from high sulphur fuel oil (HSFO) to marine gas oil (MGO) or distillates, resulting in high pressure to refiner to increase crude oil to maximize distillate, increasing distillate prices. It is expected that the potential cost of compliant fuel for IMO 2020 will be a big difference from cost of HSFO, creating ship-owners to install scrubbers on board or using alternative fuel like blended fuels or switch to LNG. Therefore, the estimating implications of one option decision for the IMO 2020 on changing the maritime activities will be discussed by using thematic analysis combined with PLEETS analysis through different aspects (Figure 1).

Possible implications

Firstly, the changes in the geographical aspect after implement of the Kra Canal, which are new maritime routes can be developed. They are for instance: Northern region (Hai Phong port) – Hon Khoai – Kra – Middle East/Europe; Central region (Van Phong port) – Hon Khoai – Kra – Middle East/Europe; Southern region (Ba Ria – Vung Tau) – Hon Khoai – Kra – Middle East/Europe. Vietnam has a priority strategy for developing international gateway port for vessels of larger than 100,000 DWT in Hai Phong, Ba Ria – Vung Tau and Khanh Hoa, developing comprehensive navigation facilities in all channel systems. Interestingly, Hon Khoai Project was approved by Vietnam’s Prime Minister that it would build a deep-water seaport, named Hon Khoai Port, on the Southeast of Hon Khoai Island 15 km off the coast of Ca Mau province. According to the opinions of various experts, Hon Khoai Port will be invested to become the largest seaport in Vietnam, making the main link, opening new gateway connection port of global goods and services in Vietnam, especially coal, petroleum and container. The “Investment report on Hon Khoai general seaport project”, prepared by VIP, determined the total estimated investment of US$ 5 billion, of which US$ 3.5 billion for the “super port” and US$ 1.5 billion for the logistics. It is expected that the Hon Khoai Port will have the capacity to transport 800 million tons of cargo each year.

Secondly, after developing the Kra Canal, the geographical advantage of the Hon Khoai Port, it is predicted that the Hon Khoai Port will be one of the target destinations that will go significant benefits from the increase foreign ships calls as global logistics hub for the handling of import and export cargo of Mekong Delta River as well as transhipment cargo.

Currently, Vietnam is enhancing on waterway between Ho Chi Minh City and Ca Mau to facilitate the operations of barges of more than 2,000 tons, upgrading Xa No Canal and the Dai Ngai-Bac Lieu-Gia Rai sea route, modernizing large river ports for containerized goods including Binh Long, An Phuoc, Long Binh and Cai Lay Ports, upgrading project to dredge and expand Cho Gao Canal to 80 meters, etc.

The Hon Khoai Port becomes the new shipping hub as a special trade zone; it attracts investment of various production companies and providing opportunities to business as well as development of regional economy.

Pros and cons implications of option for the IMO 2020

Obviously, four options above also have pros and cons when considering political, legal, economic, environmental, technological and sociological aspect. In this section shows the results of option using LNG and option using blended fuel oil as potential trend of Vietnamese ship-owners.

According to plan for development of the gas industry of Vietnam by 2025 with vision to 2035 (Prime Minister Decision No 60/QD-TTg 2017), research, find markets and accelerate the construction of port infrastructure facilities to be ready to receive and import LNG with the reaching 1–4 billion cubic meter per year in the period of 2021–2015 and reaching 6–10 billion cubic meter per year in the period 2026–2035. Using LNG or sulphur-free fuel for Vietnamese commercial fleet will have both pros and cons implications of new energy. Through a data collection process or direct interviews with experts, the information is showed on the Table 2 as below. It is note that using LNG as alternative fuel oil will be potential development of new ship building which encourage for Vietnam shipping.

Source: tandfonline


VAT:BG 202572176
Rakovski STR.145
Phone ( +359) 24929284
E-mail: sales(at)