IMO Archives - SHIP IP LTD

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The international shipping industry will fail to tackle its global greenhouse gas (GHG) emissions unless it puts in place rules that truly reflect the climate impact of shipping fuels, a new report finds.

The report, entitled “Exploring the relevance of ICAO’s Sustainable Aviation Fuels framework for the IMO”, has been released by Environmental Defense Fund (EDF) and University Maritime Advisory Services (UMAS).

As explained, the report is the first of its kind to explore whether the processes for delivering rules for sustainable marine fuels can be sped up using lessons learnt from aviation, a sector which is a natural comparison for the maritime industry and which is facing similar challenges in transitioning to sustainable alternative fuels.

Shipping is the lifeblood of the global economy. The international maritime sector transports roughly 90% of world trade and emits more CO2 than all but five countries. Without urgent climate action, these emissions are set to at least double by 2050. The world’s countries have committed within UN’s International Maritime Organization (IMO) to reducing GHG emissions by at least 50% by 2050, and acknowledge that to meet this target the sector must make the switch from fossil fuels to alternative fuels to deliver on this ambition. Previous studies have shown that zero-emission vessels need to enter the fleet at scale from as early as 2030.

Specifically, the report considers how sustainable aviation fuels (SAF) or eligible fuels elements of the International Civil Aviation Organization’s (ICAO’s) market-based climate program, the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA), could be adopted in the context of shipping. The analysis shows that ICAO’s SAF framework offers “a solid blueprint” for the shipping sector.

What is more, the report identifies areas where the IMO should be more ambitious than ICAO to ensure that shipping transitions away from fossil fuels. The study warns the IMO not to create “perverse incentives” which could promote fuels that could worsen the climate crisis.

Using the most appropriate science is key to making the right decisions for our environment. Shipping, as aviation, should ensure that all the emissions from a fuel – from the production to the distribution to the combustion itself – are accounted for if we are to understand the real climate impact,” Nishatabbas Rehmatulla, Senior Researcher, UCL and Principal Consultant, UMAS, commented.

A meaningful policy must incentivise a fair, sustainable and non-perverse shift away from fossil and avoid the risk that emissions are simply shifted elsewhere. Getting this right is mission critical to the shipping industry’s decarbonisation pathway” Rehmatulla added.

The International Maritime Organization and the shipping industry need to put in place the right rules for alternative fuels to truly drive the decarbonisation of the sector and it does not need to start from scratch. The rules recently adopted by ICAO offer valuable lessons and a good starting place for the IMO to chart its course toward a genuinely sustainable shipping sector” Aoife O’Leary, Director, Environmental Defense Fund, said.

Key findings and recommendations

In the absence of robust accounting rules, the climate benefit of alternative fuels can be completely undermined, UMAS and EDF said. Shipping must adopt a full lifecycle perspective, accounting for all greenhouse gas emissions, including methane, and ensure accurate calculations of both the direct and indirect impacts of emissions associated with the whole supply chain — extraction/production, transport/distribution and combustion — of the fuel.

It is a complex task, but ICAO has successfully done it for aviation and the IMO can use this work to jump-start its own progress, according to the report.

EDF and UMAS suggest that careful rules must be applied to ensure that the use of biofuels has a real climate benefit.

“Shipping must ensure that biofuels are not automatically granted a zero-emission status. The CORSIA framework sets out explicit rules for calculating emissions reductions for each biofuel pathway. It does not automatically allow all biofuels to claim zero carbon combustion emissions (as some other emissions accounting systems have done), as their lifecycle emissions can in some cases approach or even exceed those of petroleum fuels,” the duo pointed out in the report.

Authors from EDF and UMAS are also calling on the IMO to adopt strict rules on transparency to ensure that shipping companies accurately report their emissions, and don’t double count emission reductions.

They also want IMO to allocate adequate resources and draw on the experience and lessons learned from ICAO, where appropriate, to get these rules right.

Source: offshore-energy


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MOST of the international fleet appears to have complied with regulations regarding fuel consumption data collection, according to the first effort to compile a global database.

The International Maritime Organization has seen more than 100 flag states submit the relevant data for 26,000 vessels, representing about 80% of ships that should have done so based on the Data Collection System regulation, a spokesperson told Lloyd’s List.

IMO member states or the relevant recognised organisations working on their behalf were required to submit verified fuel consumption data for 2019 by June 30.

Shipping companies are meant to have submitted their data to flag states or the recognised organisations for verification by March 31. Ships were obliged to have verified statements of compliance with the Data Collection System onboard by May 31.

This is the first time the IMO is collecting the fuel consumption data.

The Data Collection System covers ships that are 5,000 gross tonnes and above. The database is meant to help inform future decisions on fuel and emissions regulations by the IMO, which will publish the database.

The identities of vessels on the system will be kept confidential. The IMO secretariat plans to publish initial statistics from the system, the spokesperson said.

Panama, the world’s largest flag state, told IMO secretary general Kitack Lim in May that it was allowing a three-month extension to the deadline.

Lloyd’s List understands that other flag states have not issued extensions of the deadlines.

The IMO said it is not common practice to respond to circular letters like the one Panama’s delegation sent to Mr Lim.

“The secretariat cannot provide legally binding interpretations or grant extensions with regard to the provisions (regulations) in any of its conventions, including Marpol Annex VI, as this is the prerogative of the parties to the conventions and/or its annexes,” the spokesperson said.

Panama has uploaded fuel consumption data of several ships on its register and continues to do so, the spokesperson added.

Source: https://lloydslist.maritimeintelligence.informa.com/


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Raul Arce Contreras, +1 (212) 616-1428, rcontreras@edf.org

The international shipping industry will fail to tackle their global greenhouse gas emissions unless they put in place rules that truly reflect the climate impact of shipping fuels, according to a report released by Environmental Defense Fund and University Maritime Advisory Services today. As the International Maritime Organization meets for informal discussions on greenhouse gases this week, this report explores whether the processes for delivering rules for sustainable marine fuels can be sped up using lessons learnt from aviation, a sector facing similar challenges in transitioning to sustainable alternative fuels.

Shipping is the life blood of the global economy. The international maritime sector transports roughly 90% of world trade and emits more CO2 than all but five countries. Without urgent climate action, these emissions are set to at least double by 2050. The world’s countries have committed within UN’s International Maritime Organization (IMO) to reducing GHG emissions by at least 50% by 2050, and acknowledge that to meet this target the sector must make the switch from fossil fuels to alternative fuels to deliver on this ambition. Previous studies have shown that zero emission vessels need to enter the fleet at scale from as early as 2030.

The report considers how Sustainable Aviation Fuels (SAF) or Eligible Fuels elements of the International Civil Aviation Organization’s (ICAO’s) market-based climate program, the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA), could be adopted in the context of shipping. The analysis shows that ICAO’s SAF framework offers a solid blueprint for the shipping sector. The report also identifies areas where the IMO should be more ambitious than ICAO to ensure that shipping transitions away from fossil fuels.

“The International Maritime Organization and the shipping industry need to put in place the right rules for alternative fuels to truly drive the decarbonisation of the sector and it does not need to start from scratch. The rules recently adopted by ICAO offer valuable lessons and a good starting place for the IMO to chart its course toward a genuinely sustainable shipping sector,” said Aoife O’Leary, Director with the Environmental Defense Fund.

This report’s key recommendations include:

  • In the absence of robust accounting rules, the climate benefit of alternative fuels can be completely undermined. Shipping must adopt a full lifecycle perspective, accounting for all greenhouse gas emissions, including methane, and ensure accurate calculations of both the direct and indirect impacts of emissions associated with the whole supply chain (extraction/production, transport/distribution and combustion) of the fuel. It is a complex task, but ICAO has successfully done it for aviation and the IMO can use this work to jump-start its own progress.
  • Careful rules must be applied to ensure that the use of biofuels has a real climate benefit. Shipping must ensure that biofuels are not automatically granted a zero-emission status. The CORSIA framework sets out explicit rules for calculating emissions reductions for each biofuel pathway. It does not automatically allow all biofuels to claim zero carbon combustion emissions (as some other emissions accounting systems have done), as their lifecycle emissions can in some cases approach or even exceed those of petroleum fuels.

The report warns the IMO not to create perverse incentives which could promote fuels that could worsen the climate crisis.

“Using the most appropriate science is key to making the right decisions for our environment. Shipping, as aviation, should ensure that all the emissions from a fuel – from the production to the distribution to the combustion itself – are accounted for if we are to understand the real climate impact. A meaningful policy must incentivise a fair, sustainable and non-perverse shift away from fossil and avoid the risk that emissions are simply shifted elsewhere. Getting this right is mission critical to the shipping industry’s decarbonisation pathway,” said Dr Nishatabbas Rehmatulla, Senior Researcher, UCL and Principal Consultant, UMAS.

The authors also call on the IMO to:

  • Adopt strict rules on transparency to ensure that shipping companies accurately report their emissions, and don’t double count emission reductions.
  • Allocate adequate resources and draw on the experience and lessons learned from ICAO, where appropriate, to get these rules right.

Download the report.

Source: edf


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China’s new low-sulphur fuel oil (LSFO) futures contract made strong gains in its debut trade on Monday, rising as much as 16.7% on the Shanghai International Energy Exchange (INE).

The front-month January contract, with a listing price of 2,368 yuan per tonne, later pared gains to close 9.8% higher at 2,599 yuan ($367.35) per tonne at the close of afternoon trade.

The contract saw open interest of 24,859 lots and trading volumes of 130,439 lots.

The launch of the contract with sulphur content lower than 0.5% comes after an International Maritime Organization (IMO) ruling which bans ships from using high sulphur content fuel oil this year unless equipped with exhaust scrubbers.

The contract could help boost China’s ambition to build a regional bunkering hub in its port of Zhoushan to vie for the multi-billion dollar ship fuel market dominated by Singapore.

Prices for LSFO futures jumped as the market felt its listing price, set by the Shanghai exchange, was undervalued and came below Zhoushan’s spot prices and Singapore’s 0.5% marine fuel prices, said Jin Xiao, chief analyst for energy and petrochemicals at Orient Futures research unit.

“Considering that the long-term curve of Singapore’s low-sulphur is in a contango structure, we think it is more reasonable for LSFO prices to have a premium to Zhoushan spot prices,” he said.

Contango is a situation where the futures price of a commodity is higher than the spot price.

Open to international investors, the LSFO contract is China’s fifth internationalized one following the opening up of crude oil, TSR 20 rubber, iron ore and purified terephthalic acid futures to foreign participants.

“LSFO prices will see limited declines mainly due to the fact that the most serious impact of the coronavirus epidemic on the economy has ended, demand will gradually recover,” Jin added.

A Shanghai-based trader who traded the contract said whether or not LSFO’s prices could sustain would depend on the demand and supply of the marine fuel.

“In the short term, it will depend on crude oil, which is expected to trend slightly higher.”

($1 = 7.0750 Chinese yuan renminbi)

(Reporting by Muyu Xu in Beijing and Emily Chow; Editing by Tom Hogue and Amy Caren Daniel)


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A significant step has been made to protect seafarers’ health and safety amid the COVID-19 pandemic, with IMO Secretary-General Kitack Lim’s endorsement of a series of recommendations designed to ensure seafarers can access medical care ashore quickly and safely.

Receiving medical care ashore can be a matter of life or death for seafarers who fall ill while working on ships. But since the beginning of the pandemic, there have been cases of seafarers being denied permission to go ashore, even when they presented medical issues that were life-threatening but not related to COVID-19, including a stroke (read more here).

The Recommendations for port and coastal States on the prompt disembarkation of seafarers for medical care ashore during the COVID-19 pandemic (download here) seek to address this issue. Developed by a broad cross section of global industry associations in consultative status with IMO, they provide guidance to the relevant authorities in port and coastal States so they can ensure seafarers’ access to medical care. This covers any medical situation but also when a suspected or confirmed case of COVID-19 is involved.

The recommendations include advice on monitoring for signs or symptoms of COVID-19 prior to disembarkation, isolation of suspected or confirmed cases, the use of personal protective equipment (PPE), and minimizing the exposure to infrastructures and personnel in the port during disembarkation and transfer to a medical facility.

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IMO Secretary-General Kitack Lim urged Member States to implement the recommendations and share them with the relevant authorities.

“Seafarers are at the heart of everything IMO does. In the darkest hours of the pandemic, they have been selflessly delivering the goods we all need. But their own health and wellbeing are as important as that of anyone else. Now is time for governments around the world to deliver for seafarers, by ensuring they can access medical care without delay, whenever they need it”, Mr. Lim said.

Under the International Labour Organization’s Maritime Labour Convention (MLC), port States must ensure that seafarers on board ships in their territory who are in need of immediate medical care are given access to medical facilities on shore. The obligation to render assistance to seafarers in distress, including medical assistance, is also enshrined in the IMO Safety of Life at Sea (SOLAS), Maritime Search and Rescue (SAR), Salvage and Facilitation conventions, as well as in the United Nations Convention on the Law of the Sea (UNCLOS).

Prompt and efficient disembarkation of seafarers to receive medical care ashore is essential not only for the seafarers’ health, but also for the maintenance of the global supply chain. Due to COVID-related restrictions, ships have faced difficulties arranging for such disembarkation, causing delays or disruptions to their operations and potential danger to the seafarers themselves.

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The Recommendations for port and coastal States on the prompt disembarkation of seafarers for medical care ashore during the COVID-19 pandemic were developed by ICS, IAPH, BIMCO, IFSMA, INTERTANKO, P&I Clubs, CLIA, INTERCARGO, InterManager, IPTA, IMCA, INTERFERRY, FONASBA, ITF and WSC.

Read more: WISTA International Signs MOU With The International Maritime Organisation, IMO

Since May, IMO has been urging its Member States to implement the Recommended framework of protocols for ensuring safe ship crew changes and travel during the coronavirus (COVID-19) pandemic, which were also drawn up by industry associations. These protocols specifically ask governments to designate seafarers as key workers and to do everything possible to allow crew changes to happen. Implementing these protocols remains vital, as hundreds of thousands of seafarers remain stranded on ships, having worked for several months beyond their original contracts, or, conversely, stuck onshore, unable to join ships and work.
Source: IMO


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A new report from Environmental Defense Fund and University Maritime Advisory Services (UMAS) has argued that the International Maritime Organization should follow the lead taken by the International Civil Aviation Organization (ICAO) in promoting the move to sustainable fuels and accounting for emissions.

Specifically, the report looks at how elements of the ICAO’s market-based climate programme, the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA), could be adopted in the context of shipping.  According to Environmental Defense Fund, ICAO’s sustainable aviation fuels (SAF) framework offers a ‘solid blueprint for the shipping sector’ – but the report also identifies areas where the IMO ‘should be more ambitious than ICAO to ensure that shipping transitions away from fossil fuels’.

Aoife O’Leary, Director with the Environmental Defense Fund, commented: ‘The International Maritime Organization and the shipping industry need to put in place the right rules for alternative fuels to truly drive the decarbonisation of the sector and it does not need to start from scratch. The rules recently adopted by ICAO offer valuable lessons and a good starting place for the IMO to chart its course toward a genuinely sustainable shipping sector.’

The report’s key recommendations include:

  • Shipping must adopt a full lifecycle perspective, accounting for all greenhouse gas emissions, including methane, and ensure accurate calculations of both the direct and indirect impacts of emissions associated with the whole supply chain (extraction/production, transport/distribution and combustion) of the fuel.

Environmental Defense Fund said that this would be a ‘complex task’, but maintained that ‘ICAO has successfully done it for aviation and the IMO can use this work to jump-start its own progress’.

  • Careful rules must be applied to ensure that the use of biofuels has a real climate benefit. Shipping must ensure that biofuels are not automatically granted a zero-emission status.

Environmental Defense Fund said this was necessary as not all ‘biofuels’ are equally green.

‘The CORSIA framework sets out explicit rules for calculating emissions reductions for each biofuel pathway,’ explained Environmental Defense Fund. ‘It does not automatically allow all biofuels to claim zero carbon combustion emissions (as some other emissions accounting systems have done), as their lifecycle emissions can in some cases approach or even exceed those of petroleum fuels.

‘The report warns the IMO not to create perverse incentives which could promote fuels that could worsen the climate crisis.’

Dr Nishatabbas Rehmatulla, Senior Researcher, UCL and Principal Consultant, UMAS, commented: ‘Using the most appropriate science is key to making the right decisions for our environment. Shipping, as aviation, should ensure that all the emissions from a fuel – from the production to the distribution to the combustion itself – are accounted for if we are to understand the real climate impact. A meaningful policy must incentivise a fair, sustainable and non-perverse shift away from fossil and avoid the risk that emissions are simply shifted elsewhere. Getting this right is mission critical to the shipping industry’s decarbonisation pathway.’

The  report also call on the IMO to:

  • Adopt strict rules on transparency to ensure that shipping companies accurately report their emissions, and don’t double count emission reductions.
  • Allocate adequate resources and draw on the experience and lessons learned from ICAO, where appropriate, to get these rules right.

A full copy of the report can be download here.

The Environmental Defense Fund will be contributing an article about this report in the forthcoming August/September issue of the Bunkerspot magazine. 

 

Source: bunkerspot


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Recently the International Maritime Organization (IMO), the shipping agency of the United Nations, issued new rules aiming to reduce sulphur emissions, due to which ships are opting for newer blends of fuels.

What are the new rules of IMO?

  • It has banned ships from using fuels with a sulphur content above 0.5 per cent, compared with 3.5 per cent previously. Because sulphur oxides (SOx), which are formed after combustion in engines, are known to cause respiratory symptoms and lung disease, while also leading to acid rain.
  • The new limits are monitored and enforced by national authorities of countries that are members of the International Convention for the Prevention of Pollution from Ships (MARPOL) Annex VI.
  • As per the new policy, only ships fitted with sulphur-cleaning devices, known as scrubbers, are allowed to continue burning high-sulphur fuel.
  • Alternatively, they can opt for cleaner fuels, such as marine gas oil (MGO) and very low-sulfur fuel oil (VLSFO).

Impact of the move

The new regulations, called IMO 2020, have been regarded as the biggest shake-up for the oil and shipping industries in decades. It affects more than 50,000 merchant ships worldwide.

A brief note on The International Convention for the Prevention of Pollution from Ships (MARPOL)

  • MARPOL is the main international convention covering prevention of pollution of the marine environment by ships from operational or accidental causes.
  • The MARPOL Convention was adopted on 2 November 1973 at IMO.
  • The Convention includes regulations aimed at preventing and minimizing pollution from ships – both accidental pollution and that from routine operations – and currently includes six technical Annexes. Special Areas with strict controls on operational discharges are included in most Annexes.
  • Annex VI of the Convention: Prevention of Air Pollution from Ships (entered into force 19 May 2005)
    • It sets limits on sulphur oxide and nitrogen oxide emissions from ship exhausts and prohibits deliberate emissions of ozone-depleting substances; designated emission control areas set more stringent standards for SOx, NOx and particulate matter.
    • A chapter adopted in 2011 covers mandatory technical and operational energy efficiency measures aimed at reducing greenhouse gas emissions from ships.Source: manifestias

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Not for the first time in recent weeks shipping has been urged to take a leaf out of the aviation playbook in terms of how it tackles its carbon footprint.

Shipping, as aviation, should ensure that all the emissions from a fuel – from the production to the distribution to the combustion itself – are accounted for if we are to understand the real climate impact

A new 28-page report issued today by Environmental Defense Fund and the influential University Maritime Advisory Services (UMAS) states that shipping will fail to tackle its global greenhouse gas emissions unless it puts in place rules that truly reflect the climate impact of shipping fuels.

The report is the first of its kind to explore whether the processes for delivering rules for sustainable marine fuels can be sped up using lessons learnt from aviation, a sector facing similar challenges in transitioning to sustainable alternative fuels.

The report considers how sustainable aviation fuels (SAF) or eligible fuels elements of the International Civil Aviation Organization’s (ICAO’s) market-based climate program, the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA), could be adopted in the context of shipping. The analysis shows that ICAO’s SAF framework offers a solid blueprint for the shipping sector. The report also identifies areas where the IMO should be more ambitious than ICAO to ensure that shipping transitions away from fossil fuels.

“The International Maritime Organization and the shipping industry need to put in place the right rules for alternative fuels to truly drive the decarbonisation of the sector and it does not need to start from scratch. The rules recently adopted by ICAO offer valuable lessons and a good starting place for the IMO to chart its course toward a genuinely sustainable shipping sector,” said Aoife O’Leary, director with the Environmental Defense Fund.

In the absence of robust accounting rules, the climate benefit of alternative fuels can be completely undermined, the report warns. Shipping must adopt a full lifecycle perspective, accounting for all greenhouse gas emissions, including methane – a likely swipe at LNG, and ensure accurate calculations of both the direct and indirect impacts of emissions associated with the whole supply chain (extraction/production, transport/distribution and combustion) of the fuel.

The study calls for the application of careful rules to ensure that the use of biofuels has a real climate benefit.

“Shipping must ensure that biofuels are not automatically granted a zero-emission status,” the report states.

The CORSIA framework in aviation sets out explicit rules for calculating emissions reductions for each biofuel pathway. It does not automatically allow all biofuels to claim zero carbon combustion emissions as some other emissions accounting systems have done, as their lifecycle emissions can in some cases approach or even exceed those of petroleum fuels.

The report warns the IMO not to create perverse incentives which could promote fuels that could worsen the climate crisis.

“Using the most appropriate science is key to making the right decisions for our environment. Shipping, as aviation, should ensure that all the emissions from a fuel – from the production to the distribution to the combustion itself – are accounted for if we are to understand the real climate impact. A meaningful policy must incentivise a fair, sustainable and non-perverse shift away from fossil and avoid the risk that emissions are simply shifted elsewhere. Getting this right is mission critical to the shipping industry’s decarbonisation pathway,” said Dr Nishatabbas Rehmatulla, senior researcher at UCL and principal consultant for UMAS.

The authors also call on the IMO to adopt strict rules on transparency to ensure that shipping companies accurately report their emissions, and don’t double count emission reductions.

The topic of aviation and maritime joining forces to develop new clean fuels was brought up during Capital Link’s digital forum last month by Knut Ørbeck-Nilssen, the CEO of DNV GL Maritime.

Esben Poulsson, chairman of the International Chamber of Shipping (ICS), commented that shipping had had close dialogue with the International Air Transport Association (IATA) during the crew change crisis.

“I found them very, very responsive and quick to come back to us,” Poulsson said, adding: “I think in the future there could be some cooperation and collaboration with the airline industry.”

Splash also reported last month how a front-runner for the next generation of green fuel for the aviation industry could be used for ships.

Oslo-headquartered Norsk e-Fuel is a newly-established industry consortium building Europe’s first commercial plant for hydrogen-based renewable aviation fuel.

The group comprises German power-to-liquid specialist Sunfire, Zurich-based carbon capture expert Climeworks, engineering, procurement and construction company Paul Wurth and green investor Valinor, which owns Norway’s largest private wind power developer Norsk Vind.

Norsk e-Fuel will make use of Sunfire and Climeworks’ technologies to build plants that will convert into syngas renewable electricity, water and carbon dioxide (CO2) captured from ambient air and unavoidable CO2 sources. This syngas will be used for the production of renewable fuels through further processing and refining.

The first such facility is planned to open at the Heroya Industry Park in Porsgrunn by 2023 with an initial capacity to produce 10m litres of renewable fuel per year. There are plans to expand it to 100m litres annually by 2026.

Source: splash247

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The bunker fuel supply and availability landscape changed when the IMO’s regulation capping the global fuel sulphur limit at 0.50% was enforced from 1 January 2020. While the technological solutions are many, decisions are hard to take.

Following an availability review of compliant low-sulphur fuel oil in 2020, the IMO decided that the global fuel sulphur limit of 0.50% was to enter into force in 2020. This requirement is in addition to the 0.10% sulphur limit in the North American, US Caribbean, North Sea and Baltic Sulphur Emission Control Areas (SECAs). Vessels that have exhaust gas cleaning systems installed are still allowed to use high-sulphur fuel oil (HSFO).

Global Sulphur Cap Regulatory overview

Regulatory overview

New amendments ban high sulphur fuels without using scrubbers

A significant amendment to the regulation is the carriage ban for HSFO as of 1 March 2020, from which ships equipped with scrubbers are exempted. While it’s still permitted to carry HSFO as a cargo, it’s no longer permitted to have HSFO in fuel tanks unless scrubbers are installed. This enables port state control (PSC) to detain ships carrying non-compliant fuel without having to determine if it has been used or not. Certain ports have banned the use of open-loop scrubbers within their areas. For an overview on local wash water restrictions, please see the map on the Alternative Fuel Insight (AFI) platform (Link)

Regional sulphur limits vary

The European Union Sulphur Directive stipulates a maximum of 0.10% sulphur content for ships in EU ports. In certain EU countries, the Water Framework Directive constrains the discharge of scrubber water. Belgium and Germany have prohibited the discharge of scrubber water in many areas, constraining the operation of open-loop scrubbers. Other EU countries may follow suit, with no common EU practice likely to be agreed.

In China, as of 1 January 2020 vessels operating in the Inland ECAs (Yangtze and Xijiang River) shall use fuel with a sulphur content not exceeding 0.10% sulphur. The same will apply within the Hainan Coastal ECA from 1 January 2022. In addition, discharging wastewater from scrubbers is banned within inland Emission Control Areas (ECAs), port waters and the Bohai Bay waters.

California’s Air Resources Board (ARB) enforces a 0.10% sulphur limit within 24 nautical miles of the California coast. The regulation does not allow any other compliance options than low-sulphur marine gas or diesel oil (DMA or DMB). A temporary research exemption may be granted, allowing the use of a scrubber. The application must be sent before entering California waters. After a formal review of the regulation, California legislators have decided to retain it as an addition to the ECA requirements. Both sets of regulations must be complied with when calling at port in California.

There is a general global trend of stricter local air pollution regulations coming into play.

Source: dnvgl


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Chinese refiners have the capacity to produce 18.1 million tonnes of low-sulphur fuel oil (LSFO) this year, which would make the country self-sufficient in the new shipping fuel, an official with state major PetroChina said on Monday.

China has been striving to reduce its reliance on bunker fuel imports and is aiming to create its own marine fuel hub to supply northern Asia.

About 20 refineries, mostly under state-run Sinopec Corp, PetroChina, CNOOC and Sinochem, installed equipment to produce 0.5% sulfur fuel that meets International Maritime Organization (IMO) rules that came into force at the start of this year.

China will be able to produce 22.6 million tonnes of the IMO-compliant fuel in 2021, rising to 29.6 million tonnes in 2022, Zhang Tong, a vice president of PetroChina International said at the debut of an LSFO futures contract on the Shanghai International Energy Exchange.

Zhang said if China fully releases the production capacity, the country would well be self-sufficient in supplying its bonded marine fuel market, which serves international shipping, estimated at about 12 million tonnes a year.

Before 2020, China imported almost all its bonded bunker supplies of high sulfur fuel oil from regional exporters such as Singapore and South Korea.

By close of morning trade,the front-month INE LSFO contract ended the session 10.5% higher at 2,617 yuan ($369.83) per tonne, with open interest of 19,842 lots, each of 10 tonnes.

China’s second oil product open to foreign investment after Shanghai crude oil, the new marine fuel futures is expected to attract strong investor interest from the oil industry, financial institutions and retail investors.

Source: marinelink