The International Maritime Organisation has recently introduced new regulation directly regarding fuel for ships at sea and in port, which will come into effect on 1 January, 2020. The new requirements aim to create more environmentally friendly fuel directives for ships, leading to an overall decrease in air pollution by the shipping industry, but an increase in fuel costs. In preparation for the new regulation, carriers have already begun implementing new fuel charges in advance to assist with the transition to clean fuel by 2020.
Up until now most ships have been using heavy fuel oil (HFO) which creates toxic emissions when it is burnt. Moving forward ships may continue to use HFO, but they will need to be installed with exhaust filters which cost around USD 1,000,000 per vessel. The other solution is to use low sulphur fuel (LSF) which is both more expensive and also in short supply. Two major shipping lines have estimated the cost of the new regulations at around USD 2,000,000 per year. Therefore, this cost is expected to be shared throughout the supply chain.
Whilst all the information regarding changes during this transition period has not yet been released, rest assured we are monitoring the situation closely and will provide updates as they are received. In the meantime, feel free to call or email us with any questions.
For further information on the new fuel requirements you can head to: Sulphur Limit FAQ 2018 PDF