The shipping industry is constantly facing several challenges as well as uncertainties while preparing for compliance with the sulfur cap. One of the main concerns is regarding the availability of compliant low-sulfur fuel. Another major concern is regarding the installation capacity of shipyards, in order to fit adequate number of scrubber systems before the deadline. The new rule has created a risk as well as posed as a liability for ship owners with regard to compliance. In addition, the recent prohibition of open loop scrubbers by many member states has further reduced the number options available for ship owners.
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Penalties for non-compliance have been determined in various port states, and include fines, arrest and confiscation of the vessel. However, implementation of MARPOL Annex VI could be difficult as flag states and port control authorities would require supervision vessels on a continuous basis. For the same, “sniffer” drones are being used in territorial waters to verify the compliance of ships. Failure to comply with the MARPOL regulation on the 0.5% sulfur cap might affect the ship’s classification status, which would consequently lead to the nullification of the insurance cover. In addition, non-compliance could also give rise to contractual disagreements between charterers and ship owners, over the installation and maintenance of scrubbers and the bunkering of compliant fuel.
The move to ultra-low sulfur fuel oil (ULSFO) and very-low sulfur fuel oil (VLSFO) is expected to cost the shipping industry up to $60 billion annually, a price that ship owners may seek to pass on to customers. For instance, Maersk estimates its additional fuel costs at more than $2billion annually. Another major concern is that the technical glitches stemming from the use of compliant fuel could trigger a vessel to lose power or control, which could lead to groundings and collisions. According to the International Union of Marine Insurance (IUMI), the data from the California Department of Fish and Wildlife indicates that switchovers among heavy fuel oils and distillate fuels enhance the risk of vessels losing power. There also are huge concerns about the capability of refineries to deliver enough compliant fuel to meet the requirements of the industry by 2020. Even if sufficient amount of low-sulfur fuel is available, the quality standard of certain blended fuels may not be easily met. This could further have a negative impact on the engine and the operation of a vessel. This could result in increased machinery loss, which can in turn trigger maritime accidents.
The research study focuses on unleashing the innovations in marine oil technology and aims to put forward a clear picture of the current consumption and future growth potential of IMO 2020 compliant marine oil. For instance, the British firm Recycling Technologies (RT) is directing a system which will be able to turn a mix of plastics including polyester clothing, cling film, and carpets, among others into marine oil that will meet the MARPOL Annex VI 2020 global 0.50% sulfur cap. Besides, product launches and business expansions on an industry level are highly witnessed between the key players to bring improvements in their IMO 2020 compliant marine oil products. For instance, in March 2019, BP p.l.c., announced to expand its supply of 0.5% VLSFO marine oil in the Amsterdam/Rotterdam/Antwerp (ARA) and Singapore hubs.
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IMO 2020 compliant marine oil is potentially one of the few widely available, long-term fuel alternatives for simultaneously tackling environmental quality and energy security. Thus, IMO 2020 compliant marine oil is an important source for desulfurizing the marine environment.
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