Japan’s Big Three choose multipronged approach to sulphur cap

Japan's Big Three have outlined their strategies for meeting the IMO's 2020 sulphur cap. Credit: Getty Images
Japan's Big Three have outlined their strategies for meeting the IMO's 2020 sulphur cap. Credit: Getty Images

Japan’s Big Three shipping groups have decided to adopt a combination of solutions to ensure that their fleet complies with the International Maritime Organization’s enforcement of stricter emission regulations in 2020.

The global sulphur cap, will then restrict sulphur content in marine fuels to 0.5%, from the current limit of 1%. Shipowners can choose to install scrubbers, burn low-sulphur fuel oil, or use alternative fuels such as liquefied natural gas.

The companies’ strategies, disclosed in their 2018 annual reports, encompass all of these.

Mitsui OSK Lines (MOL) said that it had been studying compliant fuel and scrubbers, as their effectiveness is determined by fuel prices. The company has also been designing an LNG-fuelled Capesize bulk carrier in conjunction with Australian miners BHP Billiton and Rio Tinto.

In the fiscal year that ended on 31 March, MOL took delivery of three methanol tankers that are designed to run on methanol. In 2019, it will take delivery of a tug that can run on liquefied natural gas and distillates.

NYK Line is going for a combination of burning low-sulphur fuel oil or LNG and fitting scrubbers.

Although NYK Line and “K” Line are investing in an LNG bunkering business, both companies recognise that LNG bunkering infrastructure development is still in an early stage.

Read more IMO 2020 stories on IHS Markit‘s dedicated topic page

NYK Line said, “We will continue to promote the construction of LNG-fuelled vessels for their expected reduction in environmental impact. On the other hand, expanding LNG-fuelled vessels brings up the challenge of supplying LNG to those ships.”

In 2017, two of the company’s bulk carriers were fitted with scrubbers, a first for the Japanese shipping industry.

“K” Line CEO Eizo Murakami said in his company’s annual report that it would commit to burning low-sulphur fuel oil, installing scrubbers, and converting ships to run on LNG. “We will proceed on a ship-by-ship basis, aware that we cannot limit ourselves to one particular measure,” he said.

“In April 2018, the targets for reducing greenhouse gas emissions, including CO2 emissions, from international shipping were decided, then the concrete measures to achieve [this were] discussed. Implementing environmental measures will entail large costs, but it is important to take action without delay by sharing the burden fairly among beneficiaries.”

Scrubbers remove sulphur from marine fuels as the bunkers are burned, but debate has surrounded its cost effectiveness. In a recent interview with IHS Markit, chief executive officer of Anglo-Eastern Group Bjørn Højgaard cited weight and stability issues with them.

On 28 August, Hong Kong-based bulk carrier owner Jinhui Shipping & Transportation said it was opting to burn low-sulphur fuel oil as it was unsure of the effectiveness of scrubbers.

However, others, such as Vale and Ciner Ship Management, are moving ahead with retrofitting plans.