What is IMO 2020?
From January 1st 2020 onwards, all seagoing vessels will have to reduce sulphur oxides by 85%. The new regulation is set by the International Maritime Organisation (IMO) with the aim of reducing greenhouse gas emissions, protecting public health and supporting the environment. The regulation will apply globally and throughout the industry to fuels used in the open sea. Vessels must use marine fuels with a maximum sulphur content of 0.5% compared to the current limit of 3.5%.
What are IMPACTS and risks?
It is currently not possible to indicate an amount for the future price levels for Very Low Sulphur Fuel (VLSF). At this stage all we can predict is that it will cost more than currently available fuels. Today’s forecast assumes a short- to midterm increase in bunker prices between US$ 180 and US$ 400 per TEU. Due to the significant increase in bunker prices, every company involved in sea freight will be confronted with rising transportation costs. When IMO 2020 comes into effect transportation services may be disrupted as a result of inadequate fuel quality, which may lead to engine failures or insufficient availability of compliant bunker fuels.