Delegates at the International Maritime Organization’s (IMO) Pollution Prevention and Response (PPR) subcommittee meeting have said any delay to the implementation of the so-called sulphur cap due on 1 January 2020 is very unlikely.
Moves by a number of delegations, including oil-producing and developing countries, have sought to reopen the debate about implementation, but there is little appetite from the majority of delegations at IMO, which believe this debate has been concluded and that the best thing is for the industry to move on.
PPR5 is essentially the curtain-raiser to the main event in April when the Marine Environment Protection Committee (MEPC) will meet to make decisions on a number of significant issues, including market-based measures for curbing carbon emissions. However, the major focus for PPR5 has been the sulphur cap, with the global regulation for low-sulphur fuels implemented in less than two years.
In his opening address, general secretary Kitack Lim said, “Undoubtedly, the most important item on your agenda this week is the consistent implementation of the 0.50% m/m global limit of the sulphur content of ships’ fuel oil, which will come into effect from 1 January 2020. There is no turning back. The lower global sulphur limit will have a significant beneficial impact on the environment and on human health, particularly that of people living in port cities and coastal communities.”
Lim, however, got to the nub of the matter, saying, “Consistent implementation to all ships will ensure a level playing field is maintained.” This was a key element of the PPR discussions and the number of delegations ready to speak on the issue showed the strength of feeling and that owner representative bodies were keen that implementation would be enforced globally from the outset.
Even so, some delegations warned that there could be safety issues involved with the switch to low-sulphur fuel oil (LSFO) with a sulphur content not higher than 0.5%. These were dismissed by other delegates as negligible risks.
Several delegations were, however, also warning that the availability of LSFO within the first five to seven years may prove to be patchy as the switch for the producers could be problematic.
One delegate told IHS Markit, “Factually speaking, there is no way that the oil refineries will be capable of producing the required amount of low-sulphur fuel by 2020. It could take five to seven years to develop the supplies and that could produce distortions in the market. There will [initially in 2020] be very short supply and that will mean high prices.”
The possibility that LSFO prices could soar as a result of the switch also concerns some developing countries. As a result, a number of delegations asked for a transition period from 1 January 2020, rather than the hard implementation of the regulation.
Other delegates were scathing about this move. “The shipping industry has been here before. We learnt a lot from 2015 [when the emission control areas were implemented] and there is little chance of a delay to the implementation of the regulation,” said one delegate from a non-governmental organisation.
Another delegate pointed out that the IMO and MEPC had looked at the supply side and concluded that the initial supply of LSFO could be “patchy”, but added “that’s what tankers are for”. He said the IMO had studied the issues and believes that enough LSFO will be available globally, but there may be some areas where supply is short. If there is a limited supply in a region, then LSFO can be shipped in from an area where supply is adequate for local needs.
Delegates also discussed the need to develop a standard system that would allow owners to show they had made attempts to source LSFO but, where unable to do so would render them immune from prosecution under the new regulations.
As part of the initial debate on consistent implementation there were several proposals to ban the carriage of high-sulphur-content fuel for combustion after 2020. These were discussed at PPR5 and were met with positive responses from the majority of delegations at IMO. A ban would mean fines for storing high-sulphur fuel oil in fuel tanks, even if it was unused, but would not extend to the carriage of the fuel as a cargo.
All delegates that spoke to IHS Markit agreed that the ban on the carriage of high-sulphur fuel after January 2020 was very likely to be approved at MEPC following the deliberations at PPR5 and after the working groups report their findings.
Japan laid out a roadmap for the shift to low-sulphur fuel that was generally well received. It includes the establishment of a correspondence group at the current meeting, with an intersessional meeting later this year to consider the progress made by the correspondence group so that guidelines can be finalised at PPR6 early next year. These will then be approved and adopted at MEPC in late 2019, just before the key implementation date.