Global Sulphur Cap 2020

The bunker fuel supply and availability landscape will change when the IMO’s regulation capping the global fuel sulphur limit at 0.50% is enforced from 1 January 2020. While the technological solutions are many, decisions are hard to take.

Following an availability review of compliant low-sulphur fuel oil in 2020, the IMO has decided that the global fuel sulphur limit of 0.50% will enter into force in 2020. This requirement is in addition to the 0.10% sulphur limit in the North American, US Caribbean, North Sea and Baltic Sulphur Emission Control Areas (SECAs). Vessels that have exhaust gas cleaning systems installed will be allowed to continue using high-sulphur fuel oil (HSFO).

Global Sulphur Cap Regulatory overview
Regulatory overview

New amendments ban high sulphur fuels without using scrubbers

A significant amendment to the regulation is the agreement on a carriage ban for HSFO as of 1 March 2020, except for ships equipped with scrubbers. While it will still be permitted to carry HSFO as a cargo, it will not be permitted to have HSFO in fuel tanks unless scrubbers are being used. This is intended to enable port state control (PSC) to detain ships carrying non-compliant fuel without having to determine if it has been used or not, and is expected to significantly discourage non-compliance when in international waters. Certain ports have banned the use of open-loop scrubbers within their areas.

Regional sulphur limits vary

The European Union Sulphur Directive stipulates a maximum of 0.10% sulphur content for ships in EU ports. In certain EU countries, the Water Framework Directive constrains the discharge of scrubber water. Belgium and Germany have prohibited the discharge of scrubber water in many areas, constraining the operation of open-loop scrubbers. Other EU countries may follow suit, with no common EU practice likely to be agreed.

China has announced that as of 1 January 2019, it is expanding the geographical coverage of its 0.50% sulphur areas to a 12-nautical-mile zone covering the entire Chinese coast line. In addition, discharging wastewater from scrubbers is banned within inland Emission Control Areas (ECAs), port waters and the Bohai Bay waters. A full ban on open-loop scrubbers from the country’s ECA could be also adopted in future.

California’s Air Resources Board (ARB) enforces a 0.10% sulphur limit within 24 nautical miles of the California coast. The regulation does not allow any other compliance options than low-sulphur marine gas or diesel oil (DMA or DMB). A temporary research exemption may be granted, allowing the use of a scrubber. The application must be sent before entering California waters. After a formal review of the regulation, California legislators have decided to retain it as an addition to the ECA requirements. Both sets of regulations must be complied with when calling at port in California.

There is a general global trend of stricter local air pollution regulations coming into play. In addition to the areas discussed above, this is exemplified by emission regulations – both established and forthcoming – in places such as the Panama Canal, Taipei and local municipalities around the world.