GOVERNMENTS, COMPANIES GEAR UP FOR NEW IMO SHIPPING EMISSION STANDARDS
A new regulation by the United Nations International Maritime Organization (IMO) will ban ships from using fuel with a sulfur content higher than 0.5%, compared to the current 3.5%, starting January 1, 2020. The upcoming mandate brings forth major changes in the global shipping sector, which consumes four million barrels of bunker fuel a day. In Singapore, the world’s largest bunkering hub, 32 ships are stockpiling an estimated 4.455 million tons of IMO-compliant low-sulfur fuel ahead of the 2020 rule (Reuters). To achieve compliance, some vessels are instead turning to sulfur-free liquefied natural gas (LNG). Japan is subsidizing projects to spur demand for LNG, including the launch of the nation’s first LNG bunkering ships by the end of 2020 (Japan Times).
Although some economists express concerns over the high cost of converting fuel, shipping analysts believe prices and fuel supply will stabilize relatively quickly. According to a 2018 study in the journal Nature, ship pollution causes up to 400,000 premature deaths a year. The use of low-sulfur fuels could cut the number of deaths by more than a third (Deutsche Welle).
Under pressure by activists and investors, shipping companies are also looking to reduce carbon emissions. Shipping currently accounts for 2.2% of global carbon emissions. The IMO aims to halve the shipping sector’s greenhouse gas emissions from 2008 levels by 2050. U.S. agricultural group Cargill and Italian shipping company Grimaldi Group have begun using higher quality paint and installing more efficient propellers to reach the international target. Maersk, the world’s biggest container line, set an even more ambitious goal of reaching carbon neutrality by 2050. Over the last four years, Maersk has invested over $1 billion to increase the energy efficiency of 150 vessels (Reuters).