Beginning on Oct. 22, 2018, the International Maritime Organization (IMO) held a new round of talks centered on ocean-shipping environmental regulations, particularly the proposed January 2020 implementation of a new, low-sulfur fuel mandate. The initiative, coined “Sulphur 2020” by the IMO, will require maritime shippers to begin the usage of low-sulphur fuels in an effort to cut harmful sulfur-oxide emissions generated by the burning of contemporary heavy fuels.
The current January 2020 mandate deadline has come under fire from many critics who cite the potential economic ramifications of implementing such an ambitious environmental policy. Fuel is the biggest cost incurred by shipping lines, and with the price of fuel increasing shipping costs roughly 25% this year, limited availability and expensive low-sulphur fuels are causing many IMO member nations to feel ill at ease.
Shipping companies in Greece, Panama, Liberia and the Marshall Islands have voiced their concerns over a potential 50% operating cost increase due to the low-sulphur fuel mandate, and the Trump Administration has also recently weighed in. According to the Wall Street Journal, “White House projections suggest the global economic costs (of the mandate) could surpass $100 billion, with the U.S. portion of that potentially rising to more than $10 billion.” (Source: wsj.com)
The recent talks evaluated a possible deadline extension to March of 2020, and addressed overall safety and availability concerns of the new low-sulphur fuels. No IMO member nation has asked for an indefinite suspension of the deadline, but several member nations are lobbying for a phasing-in process that may span several years, a plan which was ruled out – for the time being – by the IMO last month.
Odyssey is monitoring this initiative and will provide updates as new information becomes available.