IMO 2020 Sulphur Regulation

On 1st January 2020, a new regulation from the International Maritime Organization (IMO) will come into effect. Under the new global cap, all shipping companies will have to use marine fuels with a sulphur content of no more than 0.5% against the current limit of 3.5% in an effort to improve air quality and reduce greenhouse gas emissions.

Fuel oil, which is high in sulphur content, has traditionally been used by the shipping industry as bunker fuel. With the implementation of stricter environmental regulations, shipping companies are considering how best to replace conventional fuel options or adopt exhaust technology, called scrubbers to vessels. Aside from scrubbers, the available options are ultra-low sulphur fuel oil (ULSFO), marine gas oil (MGO) or alternative fuels such as liquid natural gas (LNG).


Whilst shipping companies are highly supportive of the IMO regulation, with regards to the recognised benefits to human and environment health, the resulting compliance options are expected to be expensive and challenging. There is industry wide recognition on resulting high investment costs to fit scrubbers to container fleets and uncertainty to the future compliant fuel prices after 2020. Shipping lines are already signalling they cannot absorb associated costs and are advising that customers should be prepared for increases.

The shipping industry is aware of the environmental impact of emissions and as such are committed to supporting sustainable options and compliance. Once any cost impacts for this complex change are validated we will provide further updates.

The International Maritime Organization (IMO) is a specialized agency of the United Nations, the global standard-setting authority for the safety, security and environmental performance of international shipping.

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