Five steps to prepare for compliance with IMO’s 2020 sulphur limit
KNect356 recently asked IBIA to respond to this question: What are the 5 steps everyone should take to prepare for 2020 compliance in order to neutralise short-term challenges and prepare for long-term goals? Why?
For the benefit of IBIA members, here is our response:
I’m not sure there are five steps that apply to everyone. IBIA’s members include stakeholders right across the marine fuel chain from well to stack and a range of service providers, so we take a broad-based view on industry issues. How to prepare depends on a variety of factors including which business you are in and your area(s) of operation. You may need to take a global view, but even then it would be wise to gain an understanding of issues that may be specific to a region.
Having said that, it seems the first step everyone should take is to build a clear picture of your own business needs and/or identify what you can offer. For a ship owner/operator this would include assessing and then deciding, as soon as possible, on the 2020 compliance options they want to pursue. Their solutions will depend on the ship type/age/size and area of operation and it may not be the same across the fleet. For the supply side it would be developing suitable marine fuels while for service providers it would be identifying what type of support they can offer or solutions to potential problems.
The second step, having identified business needs and/or solutions, would be to communicate these to the various parties you will rely on to meet these needs and/or letting them know which solutions you have to offer. One clear-cut example of this is for ship operators that choose a niche solution – such as scrubbers, LNG or methanol – to ensure they can get supply of the fuel they need. Neither high sulphur fuel oil, nor LNG, will be readily available in every port around the world so it may be necessary to establish contracts to guarantee supply.
The third step that seems widely applicable is to prepare for a world of multiple blends of oil-based fuels meeting the 0.50% sulphur limit and understand the challenges this will bring. For the supply side, this means gaining experience with producing compliant blends and to avoid blending practices that result in unstable fuels. This will require collaboration with fuel testing agencies and preferably also engine manufacturers to run tests on various products to understand how they behave. For ship operators, they need to prepare for more challenging fuel management because it is expected that there will be multiple 0.50% sulphur products which will vary in nature and hence require different onboard handling and strict product segregation to safeguard against compatibility issues. This may require adjustments to fuel tank arrangements. Ship operators would also be wise to gain experience with some of the 0.10% sulphur products already in the market that are not traditional marine distillates, as these may be closer in nature to the 0.50% sulphur products we can expect.
The fourth step is careful planning for the implementation phase in order to be ready to be fully compliant on 1 January 2020. For the supply side this will be a huge logistical enterprise involving sourcing compliant fuels, cleaning out storage tanks and cargo tanks on bunker barges while trying to time it to when ships begin ordering compliant fuels. Ships, apart from those equipped with scrubbers, will also need to clean out their fuel systems and make sure they start this process in good time.
Finally, consider whether you want to stay in business for the long term. You may decide to wind down because your assets are not suited for a low-emissions and low-carbon future. Otherwise, invest to ‘future-proof’ your assets and/or services to have the flexibility to adapt to new solutions as they become available, or better still, be the innovator that comes up with viable solutions!
IBIA’s response forms part of an industry review paper published by KNect 356 in July. The full paper is available here: http://bit.ly/2OeGQEY
Report by Unni Einemo