Shipping industry sails into unknown with new pollution rules


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Rodsi Bhatia writes articles for business products and other manufacturing units. Acmas Technocracy Pvt.Ltd is a leading Manufacturer of scientific laboratory equipments such as , Fume Hood Scrubber &

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Before the deadline, ship operators rushed to buy large quantities of compliant fuels to ensure adequate supplies, piling pressure on bunker suppliers and pushing premiums for delivered fuels to record highs.

Around 172 ships have avoided the problem because they are powered by sulphur-free liquefied natural gas (LNG), data from Norwegian risk management and certification company DNV GL showed, but this in an expensive option.

Shipping sources said the delays were also having an impact on the fitting of exhaust gas cleaning systems known as scrubbers, which are needed to enable ships to continue to use high sulphur fuel after tough new rules on emissions.

“Over 70% of vessels currently undergoing scrubber retrofitting are doing so in China. On that front, there are on-going delays at shipyards because workforces are depleted, taking vessels out of action,” Charles Chasty, research analyst with broker Affinity Shipping, said.

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Five trade sources said the spread of coronavirus in China had exacerbated a slowdown in demand for marine fuels, also known as bunkers, that is typical of the period around the Lunar New Year holiday, extended this year to fight the disease.

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Harris from Marsh, a broker active in marine insurance including hull and machinery, said assessing cover was still guesswork: for instance, who should pay a fine for a ship using high-sulphur fuel because no alternative was available?

Since the start of the year, the International Maritime Organization (IMO) has banned ships from using fuels with a sulphur content exceeding 0.5%, from 3.5% earlier, unless they are equipped with sulphur-stripping devices known as scrubbers.

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Neither option has been fully tested for long, and some problems have already been reported, both with the more expensive new fuels and with devices known as scrubbers which extract the sulphur on board.

Cooling VLSFO prices are also an early sign of stabilizing market fundamentals after months of volatility sparked by adoption of new global marine fuel rules in one of the biggest shake-ups in decades for the shipping and oil industries.

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“Of course this costs us annually around $100,000, but we prefer that cost than to use untested bunker oil based solely on the Bunker Delivery Receipt and find that we have a massive problem on our ship,” he said.

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