P.T. Chen, Chairman, Wan Hai Lines

P.T. Chen, Chairman, Wan Hai Lines

The regulation imposed by International Maritime Organization requiring ships in international waters to burn less than 0.5 percent sulfur fuel to reduce harmful emissions will be effective by 2020. While shipowners and operators do demonstrate their commitment to environmental sustainability, there will apparently be financial burden and safety considerations to comply with this regulation.

Shipowners and operators are deciding whether they should go for low-sulfur fuel, scrubbers, or liquefied natural gas. Low-sulfur fuel is considered the most environmentally friendly solution in the foreseeable short term. But it’s expected to cost at least 50 percent more than the price of existing fuel, and has an unclear supply stream.

The other aspect that needs more industry focus is concern over fuel stability and specification. Because the low-sulfur fuel will be mostly a product blended with heavy fuel oil and low-sulfur marine gas oil, there is yet a global standard for many of the blended fuels.

Compatibility and production of excessive sludge due to co-mingling of various low-sulfur fuel blend sources not only require deliberate calibration on engines but also time to observe that it will bring no damages to engines and other key apparatus.

Whatever option shipowners and operators may choose, it is inevitable that there will be sizable costs to comply with the requirements.

The escalating trade war tension between the world’s top two economies and growing trade nationalism/protectionism among major trade blocs and countries have caused big uncertainties with heightened geopolitical risk that will cast major disruption to global supply chains and trade volumes.

Hence 2019 is shaping up to be a very challenging year for the maritime industry.

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