Upcoming IMO 2020 Low Sulfur Regulation

Beginning January 1, 2020, the new International Maritime Organization (IMO) 2020 Low Sulfur Regulation will be in effect – at which time all sea-going vessels worldwide will have to comply and reduce their sulfur emissions by 85%.

To comply with the Regulation, sulfur in fuel oil must be reduced from 3.50% to 0.50%, in addition to the 0.10% sulfur limit already in effect in Emission Control Areas (ECA). This aims to reduce the amount of sulfur oxide emissions and should have major health and environmental benefits globally, including improving air quality and reducing risks of acidification of the oceans.

Ocean freight carriers can achieve Regulation compliance via three solutions: using liquid natural gas-powered vessels, using advanced air quality systems on board vessels, or using compliant fuels with 0.50% or 0.10% sulfur.

The new IMO 2020 Low Sulfur Regulation will impact the global shipping industry, and shipping costs are set to increase worldwide. Industry reports have indicated that switching to a new fuel to comply with the regulations will add $11 billion USD in expenses to carriers’ balance sheets.

As the cost of the Very Low Sulfur Fuel Oil (VLSFO) is expected to be significantly higher than the present High Sulfur Fuel Oil (HSFO), carriers will be implementing new price strategies to maintain services and cover the increased costs, which will vary by carrier and trade route.

Delmar will continue to monitor the implications of this new Regulation and hold discussions with our core suppliers in an effort to offer our customers, as always, the most competitive rate and service options available.

Additional information may be obtained by contacting your local Delmar Representative.

Source: APL

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