Speaking after an ICS Board meeting in London, ICS chairman, Masamichi Morooka, explained: ‘While postponement of the sulphur global cap until 2025 is still a possibility, the shipping and oil refining industries should not assume that this will happen simply because they are unprepared. ICS has concluded that, for better or worse, the global cap is very likely to be implemented in 2020, almost regardless of the effect that any lack of availability of compliant fuel may have on the cost of moving world trade by sea.’
ICS members have therefore agreed that they will continue to work with the bunker refiners to help ensure that they will be ready, if necessary, to supply sufficient quantities of compliant fuel by 2020.
Annex VI of the IMO MARPOL Convention allows for the possibility that implementation of the global sulphur cap – which will dramatically increase the cost of marine fuel for the shipping industry worldwide, perhaps by as much as US$50bn a year – can be deferred until 2025. This decision is meant to be subject to the results of a fuel availability study that IMO is legally required to complete before the end of 2018.
Despite repeated ICS requests, IMO Member States have so far refused to bring forward the conduct of the fuel availability study. If supply problems are identified at the end of 2018 this will be far too late for governments to take action.
ICS member national shipowners’ associations have therefore concluded that a political decision may in effect already have been taken, at least by the US and the European Union which view the global cap as a public health issue.
ICS’s position is influenced by the fact that the EU has already agreed, regardless of any decision by IMO, to postpone the global cap that a 0.5% sulphur limit will apply to international shipping within 200 miles of the coast of all EU Member States.
In theory, if the global cap was not implemented until 2025, this would create a narrow corridor along the coast of North Africa in which ships could continue to burn less expensive residual fuel with a sulphur content of 3.5%.
ICS believes that the EU Member States will be unlikely to permit this and will therefore push hard at IMO for global implementation of the 0.5% requirement in 2020.
The ICS Board also reviewed implementation of the 0.1% sulphur in fuel requirements that have applied in Emission Control Areas, in North America and North West Europe, since January 1.
It was agreed that ICS will continue its close liaison with governments and Port State Control authorities in order to ensure a harmonised approach to implementation and enforcement that avoids unfair treatment or market distortion. ICS is particularly concerned by reports that some Port States are charging ships for the analysis of fuel samples.