It’s time that ships start sailing without producing sulphur emissions. Currently, the shipping industry contributes 2.5% of global emissions. If left untreated the amount of emission could increase above 50% by 2050.
Global shipping activity has continued to soar as populations rise and economies expand. Today, the shipping industry is one of the world’s largest emitters of sulfur oxides, behind the energy industry.
Many plans and agreements were signed to reduce the Shipping sector’s carbon footprint. But even after 1997’s Kyoto protocol and 2015’s Paris agreement, the shipping sector has failed to respond to the climate change challenge. So new rules are set to reduce the Shipping sector’s emissions.
Who Set the Rules?
U.N. International Maritime’s [IMO] Marine Environment Protection Committee (MEPC) set the new rules. They had adopted an initial strategy to reduce greenhouse gas (GHG) emissions from shipping by at least 50% by 2050.
The newly adopted GHG strategy targets to achieve the goals by fixed deadlines with the following goals
- Reduce CO2emissions per transport work (tonnes*miles) by at least 40% by 2030 aiming for a 70% reduction by 2050.
- Reduce total CO2emissions from shipping by at least 50% by 2050.
New rules are coming into force from 2020 to curb pollution caused by ships. oil producers to bunker fuel sellers and shipping companies are all worried about the new set of rules.
New Rules for Ships:
According to the rules drawn up by IMO, the ships using fuel with a sulfur content higher than 0.5% will be banned. Currently, the ship fuel oil used contains approximately 3.5% sulphur. If the vessel has a cleanup equipment for its sulfur emissions it need not change its fuel.
Any ship failing to follow the rules should pay fines and their insurance will be declared “unseaworthy” which would bar them from sailing.
Fuel Oil Market Might Be Affected:
Low-sulfur fuel alternatives are usually expensive and less available than bargain-rate bunker fuels. This could result in fuel shortage and spikes in cargo rates.
The global shipping industry now consumes almost 4 million barrels per day (bpd) of high sulfur fuel oil. As a result of new rules in action, most of that demand might “disappear overnight”. Most of the demand will shift to marine gas-oil, a lower sulfur distillate fuel. Alternative fuels are costly and the ship fuel cost could increase by 25% by 2020.
If the shipowner does not want to shift to friendly fuel alternatives then perhaps, scrubbers could help.
Scrubbers Could Help the Shipowners:
Scrubbers have the potential to strip out sulphur emissions allowing shipowners to use the usual fuel. But the equipment alone is very costly. According to manufacturer Wartsila, the scrubber could cost a minimum of $ 1million. This cost is very unattractive to many ship owners. Some ships already have them. Global trading firm Trafigura has ordered scrubbers for its fleet of 32 ships.
The new rules have opened new opportunities for the scrubber manufacturers. The demand for sulphur scrubbers is going to increase by 2020. Innovation in scrubbers can boom as the rules come into action.
But the cost issue might make many shipowners not to use a scrubber or change their fuel oil.
Will The Rules Bring a Change?
Due to the cost of scrubbers and reluctant to pay the premium for cleaner fuel, many ships may try to escape from the new rules. But how many in the industry will cheat is open to debate, with estimates ranging from 10 to 40%.
The IMO will most likely ban the ships that do follow the rules, making it easier to catch cheaters.
Policies Could Encourage the Ship Owners:
Government’s involvement in helping the shipowners by making policies and concessions would definitely bring success. Australia’s ports are taking steps to encourage shipping to cut GHG emissions. In order to meet the global targets, the GHG emissions must be halved by 2050.
In Australia, Port Botany and Port Kembla, ships and vessels that outperform IMO emission standards get discounts from January 1, 2019.
Implementing new rules and following them strictly would be a lower-sulfur solution to benefit air quality. Hope in 2020 all the ships sail without GHG emissions and help in reaching SDGs by 2030.