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Press Release

Ships Must Be Prepared for Strict Implementation of IMO Sulphur Rules, Says ICS, But Radical Alternative Fuels Should Also Be Explored

The shipping industry is fully committed to total compliance with the 0.1% sulphur in fuel requirements, in Emission Control Areas, from January 2015. And there is no reason to suggest that there will not be full compliance, says the industry’s global trade association, the International Chamber of Shipping (ICS).

1 December 2014

“But there is nevertheless concern amongst those owners who know that they themselves will comply but who may worry about their competitors” said ICS Director of Policy & External Relations, Simon Bennett, speaking today at the Mediterranean Bunker Fuel Conference (organised by Platts in Barcelona).

Mr Bennett remarked “The shipping industry will be investing billions of dollars in order to ensure compliance with this major regulatory change. It therefore seems only fair that governments should implement the rules in a uniform manner as we enter a brave new world in which fuel costs, for some ships, will increase overnight by around 50%”.

Mr Bennett suggested that, unlike some of the national authorities in Europe, the United States had made its approach to enforcement relatively clear.

“The real crime in the U.S. is to be caught providing false information to the Federal authorities” said Mr Bennett. “This is a criminal offence, attracting the possibility of multi-million dollar fines. If a ship has been found to supply false information, the US Department of Justice can be expected to throw the book at the operator. The DOJ is always very motivated by the chance to secure relatively easy prosecutions and shipping companies are easy pickings.”

Looking forward to the implementation of the global sulphur cap, most likely in 2020, it was still unknown whether significant numbers of ships would make use of options for alternative compliance instead of burning low sulphur fuel, a provision which ICS had fought hard for during the negotiations at IMO when the MARPOL amendments were adopted.

With respect to port state control and scrubbers, there was still a need for a harmonised approach about the acceptability of ‘closed loop’ and ‘open loop’ systems, and the extent to which overboard discharges would be subject to inspection.

With respect to sulphur-free LNG, while new some ships were being fitted with dual fuel systems, Mr Bennett suggested that for most existing vessels the engineering involved would probably be too costly to encourage retrofitting. The other major unknown was the extent to which the current lack of LNG infrastructure will be addressed before 2020. Apart from uncertainly about the comparative costs of LNG and distillate, there were also uncertainties about the future of the US shale gas revolution.

In the medium term, there was also the possibility of alternative fuels such as methanol, which for some ships might produce a clean and economically viable alternative. There were genuine concerns about safety, although if handled correctly these were arguably little different to the risks surrounding LNG, and trials using such alternatives should therefore be permitted.

It had also been suggested that the availability of distillate could be immediately increased by lowering the minimum permitted flashpoint from 60 degrees, which is the requirement under the IMO SOLAS Convention, to something comparable to conventional diesel. Mr Bennett stressed that “this is highly controversial because of the danger of fuel coming into contact with hot surfaces in ship’s engine rooms, with the potential for catastrophic explosions and loss of life. However, the question of the higher flashpoint required by SOLAS is now being looked at again by IMO”.

Because of legitimate concerns about safety, simply lowering the flashpoint of diesel on existing ships, in the belief that it will lower the price, may well prove a step too far for the regulators. “But there is a school of thought that says that a future generation of ships, with appropriately trained crews, could be constructed or operated in a manner such that use of low flashpoint diesel would be safe, just in the same way that LNG has proven to be a safe and cost effective fuel. This is not yet the current position of ICS, but a discussion is starting to take place.”