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Race is on to meet new pollution regime for ships, Wartsila boss warns

Shipowners are scrambling to comply with tough new pollution rules that are due to come into effect at the end of next year, according to one of the world’s biggest engine manufacturers.

Jaakko Eskola, chief executive of Wartsila, the Finnish engineering group, said that owners had been aware of imminent changes to the sulphur content of fuel used by big commercial vessels since 2016, but many had only just started taking action.

The new rules, which will cut the permissible level of sulphur in marine fuel to one seventh, apply to about 90,000 ships worldwide, or the entire global commercial fleet for vessels of more than 5,000 tons. They are being applied by the International Maritime Organisation, a London-based agency of the United Nations, in a drive to improve air quality by cutting cut pollution and emissions.

From January 1, 2020, all large commercial vessels will have to meet new emissions rules, which dramatically reduce the permissible sulphur content of ship’s fuel. The cut will have knock-on effects throughout the energy industry, including on oil producers, refiners and distributors, as well as shipping companies. They will have to invest in new equipment, engines and desulfurisation units, or “scrubbers”. Some of the world’s shipowners may junk ageing vessels.

The International Maritime Organisation said this month that the issue was a “key item” on its agenda. Until recently, however, few of the global transporting companies that own ships had taken action to comply with the new rules.

“Finally the shipowners have realised they need to act,” Mr Eskola said. “These ships either have to have a gas engine or a scrubber or they will need to run on low-sulphur fuel.”

He said that many shipping operators were opting to retrofit scrubber equipment to existing engines. “Last year we sold 77 scrubbers, which is more than double the number we sold in 2016.”

Wartsila makes the engines used in about half of the world’s large commercial vessels and 70 per cent of cruise ships. Its main rival is Rolls-Royce, the British engineering group. The Finnish company, which employs about 18,000 people, had net sales last year of €4.9 billion.

Mr Eskola said that smaller operators had been put off by the high costs involved and questions over how the International Maritime Organisation will police the new rules, especially in areas where shipping regulations are lax. Fitting a scrubber to a large vessel could cost as much as €5 million. Switching to LNG-powered engines is expensive and the larger fuel tanks required eat into precious cargo space.
Source: The Times

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