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IBIA: Slaying mythical beasts in the IMO 2020 labyrinth at the Posidonia Venue

What a show! The Greek Shipping community put on a wonderful week for the rest of the world at Posidonia. This year the spotlight was very much on bunkers and more specifically on how ship owners should prepare for 2020.

However, there were some examples of pure fiction, or myths, being propagated around the IMO regulations and the 2020 global sulphur cap. In Greek legend, a labyrinth, an elegant maze-like structure, was built by King Minos of Crete, to house the monstrous, bull-like Minotaur. At times international legislation may seem like a labyrinth. Therefore, in an effort to help our members and the wider community we’ve decided to jump into the labyrinth, like the heroic Theseus, in order to slay some of the hairiest mythical beasts that we encountered during Posidonia. Maybe, on reflection the real hero of this legend was Ariadne, King Minos’s daughter, who provided the red thread that enabled Theseus to navigate his way through the labyrinth.

MYTH ONE – The Global Sulphur Cap implementation date might be deferred beyond 1 January 2020.

FACT – It won’t!
Although a later date, 2025, had been considered at the IMO, it was discounted. A study submitted by Finland estimated that by not reducing the sulphur oxides (SOx) emission limit for ships from 2020, the air pollution from ships would contribute to more than 570,000 additional premature deaths worldwide between 2020-2025.

However, amendments to the legislation are already in the pipeline and the “carriage ban” on non-compliant fuel will most likely come into effect on 1 March 2020. Bunker industry professionals, including our ship owner members, can continue to lobby for amendments via IBIA at the IMO throughout the year.

MYTH TWO – Ship owners are being rushed into this.

FACT – This process has been under way for more than a decade. IMO regulations to reduce SOx emissions from ships first came into force in 2005, under MARPOL Annex VI, and since then, fuel sulphur limits have been progressively tightened both in emission control areas (ECAs) and globally. The decision to implement the global 0.50% sulphur cap in 2020 was taken in 2016.

MYTH THREE – Greek ship owners can’t afford this.

FACT – What has shone through at Posidonia is the resilience and the ingenuity of the Greek shipping community. Today, Greek owners remain the dominant force in global ship owning with an owned fleet worth approximately of 100 billion USD, followed closely by Japan and China, worth of 89 and 84 billion USD respectively (according to VesselsValue’s yearly World Fleet Values Ranking). Moreover, there are a number of Greek ship owners and technology companies pioneering the use of cleaner fuels.

MYTH FOUR – there won’t be any “certified” compliant bunker fuel available before 2023

FACT – The first thing to note is that no fuel oil is certified for use, however bunker fuel is generally sold on the basis of conformity with ISO 8217 specifications. The expectation is that fuels complying with the 0.50% sulphur limit will be blends rather than fuels fitting ISO 8217 distillate marine (DM) grade specifications, and that they will also be different from most residual marine (RM) grade specifications used today. Because of this, ISO has been asked to revise the specifications so that it can better reflect the quality of fuels likely to dominate supply in 2020. The latest revision of ISO 8217 was published in 2017 and the next revision probably won’t be ready until 2021 at the earliest. However, compliant fuel blends will still be able to conform to existing ISO 8217 specifications; it’s just that more fuels will be sold as RM grades because a few quality parameters will exceed limits for DM grades, but they should be comfortably within the limits for RM grades. Meanwhile, the ISO is developing a PAS (Publicly Available Specification) which it aims to publish in 2019 to provide detailed guidance to fuel suppliers and users on the type of fuel blends that are anticipated in 2020.

MYTH FIVE – Fuels post-2020 won’t be safe to use due to instability, incompatibility and non-compliance with the SOLAS flashpoint limit.

FACT – Fuels will still need to meet the SOLAS flashpoint limit or they will be ‘off-spec’ and hence not commercially viable. The same is true regarding existing ISO 8217 parameters that indicate fuel stability. As for compatibility, that is not guaranteed from suppliers now either, but it will be advisable for ship operators to be fully aware of the potential for different batches of fuel being incompatible and ensure product segregation and proper handling onboard. The PAS from ISO is expected to provide guidance to help prepare fuel suppliers and users to manage concerns about the nature of fuel blends produced to meet the 0.50% sulphur limit, especially with regard to stability and compatibility.

MYTH SIX – refiners and suppliers won’t be ready.

FACT – refiners and suppliers respond to market signals. If you want fuels complying with the 0.50% sulphur limit today then you can already buy it (at a premium to HSFO) and a number of refiners and suppliers have made announcements indicating that they are preparing specifically to provide compliant fuel oils for ships by 2020.

MYTH SEVEN – there won’t be enough scrubbers for 2020.

FACT – Shipping and global trade doesn’t need scrubbers to continue, simply lower SOx emissions from ships. Scrubbers (Exhaust Gas Cleaning Systems) as an abatement technology have been identified by some ship owners as a viable solution, but it is only one of several compliance options for ships (more on this below).

MYTH EIGHT – there won’t be enough compliant vessels.

FACT – any vessel that burns fuel not exceeding 0.50% sulphur (max 0.10% in ECAs) will be compliant and there are several ways for relevant authorities to check that they are. If and when the “carriage ban” comes into effect then vessels which do not have abatement technology (such as scrubbers) specified in the Supplement to the IAPP Certificate (or which aren’t approved to trial new technologies) will not be permitted to carry fuel in excess of 0.50% sulphur.

The future is already here – it’s just unevenly distributed. This is very true when it comes to fuel choices. Today, there are already vessels sailing using LNG, methane, LPG, ULSFO, HSFO with scrubbers, nuclear energy and batteries as a means of propulsion. However, it is very likely that by the first of January 2020 the vast majority of the global fleet, more than 95% will rely on low sulphur fuels and distillate blends to comply.

MYTH NINE – there isn’t anybody helping ship owners to prepare for 2020.

FACT – The key is to help ship owners prepare for 2020 by helping them to help themselves by providing well informed and unbiased information about their options and what to expect, and to lobby for the IMO to adopt pragmatic and workable regulations and guidelines for their implementation. This is exactly what IBIA does through conferences, workshops, discussions with stakeholders, publications and by using our consultative status at the IMO to submit proposals and participate in IMO meetings and correspondence groups that develop IMO instruments.

IBIA has begun the process of establishing a membership branch in Athens. There has been strong support for this initiative among existing local members and other stakeholders. Naturally, providing updates and support on preparations for the Global Sulphur Cap will form a key part of this initiative.
Source: IBIA

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