Grimaldi: IMO 2020 akin to being sent to the betting shop

Grimaldi said it is easier to work out the odds in a football game than to predict the price of compliant fuel come January 2020. Credit: IHS Markit
Grimaldi said it is easier to work out the odds in a football game than to predict the price of compliant fuel come January 2020. Credit: IHS Markit

Working out what the price of compliant fuel will be in January 2020 when the International Maritime Organization’s global sulphur cap comes into force in January 2020 is like forcing “shipowners to go to the betting shop”, according to Grimaldi Group managing director Emanuele Grimaldi.

Addressing journalists at the XXII Euromed Convention in Athens, Grimaldi said the price of 0.5% fuel is currently the “best kept secret” in the industry as no one has certainty over its availability and how it will affect their costs.

“Oil companies and refiners have a vested interest in this issue. It will be a simple issue of supply and demand and if I were a refiner, I would slow down production to take advantage of this situation. We [the shipowners] will be the victims,” he said, adding, “The lack of clarity about pricing and availability mean it is easier to determine the odds in a football game.”

According to Grimaldi, the pricing differential for compliant fuels will be high in the beginning but will reduce over time. A bigger problem would be the availability of heavy fuel oil in the years to come. He suggested it will become rarer as only a few thousand ships will be fitted scrubbers and able to use it so who “will want to keep it”.

Grimaldi Group currently has more than 40 vessels fitted with exhaust gas scrubbers – 28 in its existing fleet as well as the 12 hybrid ro-ros and seven pure car and track carriers (PCTCs) it has on order in China. Another 20 vessels will receive scrubbers, Grimaldi said, with thevessels selected being “the younger ones in the fleet as well as those that consume more”.

In answer to a question from the floor on whether Finnlines, the group’s ro-ro and ro-pax ferry operation in Northern Europe and the Baltic, would be effected by Brexit, Grimaldi said the United Kingdom’s exit from the European Union was more of a concern for its Liverpool-headquartered ACL, reiterating the views he shared with IHS Markit on Brexit a year ago.

ACL’s five con-ros which operate between Europe and North America are currently UK flagged, but Brexit could create “complicated taxation issues” and the group may have to seek an alternative European flag for these vessels.

“If Britain had opted to remain, I would have put more ships under the UK flag,” Grimaldi said, stressing that he sees the UK as a hugely important location for the group, which employs about 250 people in the country.

“We have invested and would like to be permanent in the UK,” he said.