CEO’s Introduction – MEPC 70 Special

CEO’s Introduction – MEPC 70 Special


This month’s newsletter is packed with commentary on what’s been happening at the IMO. IBIA welcomes a decisive decision at MEPC 70; we are finally sailing into a time of certainty that the global cap will be implemented in 2020.

But equally, we have uncertainty regarding how this will be regulated and indeed how ship owners intend to respond in terms of fuel choice.

The options available are high sulphur fuel with a scrubber, a “traditional” low sulphur fuel, or a “new fuel” which may be blend of various components. Consequently we are entering an era of marine fuel fragmentation. Refineries across the world may struggle to provide sufficient tried and tested marine fuels that both perform appropriately and meet all safety requirements from day one. Distribution of product and its availability is going to be a challenge.

The industry therefore has a “joker in the pack” that may well come into play – namely the MARPOL Annex VI fuel oil non-availability clause, stating a ship “shall not be required to deviate from its intended voyage or to delay unduly the voyage” in order to obtain compliant fuels. This is a situation that may occur quite frequently in 2020 and possibly beyond.

Will operators play this card?

Will ports with abundant supplies of 0.50% fuel gain market share?

Will the scrubber industry address the challenges and become an option of choice?

Or will this be the boost required for new types of fuels?

Regardless of the options, one thing is clear: we are at significant point of change, which we believe demonstrates the need for allowing a period of adaption, and/or transition.

We need a breathing space so to speak, to allow compliant fuel to become widely available in all locations, and minimising a price spike that will not help the industry or the consumer. Yes it is inevitable that prices will rise, but just as we looked for a decisive decision from IMO, we are also looking for a pragmatic approach to it implementation.

One thing is sure; IBIA will aim to provide information and commentary to help navigate the choppy waters ahead.

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