Sulphur cap conference highlights daunting challenges

The availability of low-sulphur fuel and the need for consistent enforcement were identified as key issues during class society DNV GL’s ‘Beyond 2020’ conference at Nor Shipping last month, which explored industry readiness for IMO’s global sulphur cap.

Discussing the challenges of complying with the IMO’s global 0.5% sulphur limit on marine fuels from 2020 were Rear Admiral Paul Thomas, assistant commandant for prevention policy, US Coast Guard and panelists including Omar Abu Omar, president of maritime operations, Gulf Navigation Holding; Claus Graugaard, head of fleet management, Lauritzen Kosan; and Rob Cox, refineries expert, the International Petroleum Industry Environmental Conservation Association.

“How you chose to comply may affect your future competitiveness,” said DNV GL’s Maritime CEO, Knut Ørbeck-Nilssen. “There’s no one size fits all solution. Know all the options study them carefully and then play your cards right.”

An electronic poll of the audience suggested that, in fact, the shipping industry was hedging its bets on the fuels question. Just 30% said they believed enough compliant fuel would be “easily available” by 2020.

Cox pointed to an IMO report suggesting that refiners can easily produce enough compliant fuel by 2020 while maintaining other production. The truth is somewhat different, he said: “It’s a massive task for the refining industry.” The number of scrubbers in use will have a major impact on what fuel ought to be produced, he added, noting that no one could say what the future penetration of scrubbers will be.

Omar expressed concern not only for new refinery spending but also about the timing of the IMO’s 2020 deadline: “We don’t believe it was carefully considered,” he said. “The IMO has not (examined) the role of enforcement, yet, and transparency on violations (of existing 0.1% sulphur rules) are not clear.”

Thomas countered: “The discussion is too often, ‘Can we push the date back? Is the supply (of compliant fuel) going to be there?’ Well, if you push the date to 2025, then you’ll be having the same discussion in 2022 that we’re having today.”

Graugaard, who oversees Lautirzen Kosan’s fleet of LPG carriers, foresaw a range of technical issues for vessels switching blends from heavy fuel oil to hybrid fuels, including the periodic need to flush clean holds and fuels tanks. “Ships in operation have been designed for (specific) purposes, but this will introduce the crew and operators to new complexities at sea,” he said. “Instead of moving complexity onboard ship, why not do it simply onshore.”

Some onboard sulphur reduction technology has not yet been proven, Graugaard warned, while ballast water is still causing finance headaches for ship owners. Those owners must now consider further complex technical installations, or undergo the challenging task of ensuring a steady, low-cost supply of low-sulphur fuel.

Omar and others cited a lack of incentive for ship owners to comply given the potential gaps in enforcement. The question of whether ship owners or refiners ought to bear the cost of meeting greener targets was also debated.

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