Low-Sulfur Fuel Rule

Low-Sulfur Fuel Rule

Starting Jan. 1, 2020, all ships must burn fuel with a content of 0.5 percent sulfur to comply with an International Maritime Organization amendment to the International Convention for the Prevention of Pollution from Ships (MARPOL) known as Regulation 14. 

As a result, a host of challenges face international container shipping by sea. These include concerns over higher costs, international compliance, and the availability of low-sulfur fuel at key international bunkering hubs such as Rotterdam and Singapore. 

Carriers have three paths to compliance, including the use of low-sulfur fuel, installing scrubbers and burning regular bunker fuel, or transitioning to liquefied natural gas to power vessels.

News & Analysis

15 Nov 2019
The industry’s pivot to scrubbers is a gambit not just in that it hinges on high-sulfur bunker fuel prices staying significantly lower than low-sulfur fuels, but that regulators won’t further restrict scrubbers as environmentalists raise alarms.
06 Nov 2019
As expected, greater clarity is emerging around the low-sulfur surcharge and how it will apply to shippers in cost-per-container terms as carriers get ready to queue up at the pumps.
06 Nov 2019
Carriers that do not have a significant number of their vessels equipped with scrubbers could be at a cost disadvantage as shipping prepares to comply with the IMO 2020 sulfur cap.
05 Nov 2019
Sponsored: What keeps shippers up at night? Kuehne = Nagel's EVP Otto Schacht discusses customer concerns around fuel pricing and availability with the approaching IMO 2020 low-sulfur regulation, freight rate market fluctuations, the future of contracting, and the e-commerce impact on predictability expectations.
01 Nov 2019
Carriers do not plan on carrying any of the costs of complying with the IMO 2020 low-sulfur fuel regulations, and will levy a surcharge on spot rates and shorter contracts.
01 Nov 2019
Bill Keyes, global logistics director of operations, Fluor on trade tensions and IMO2020 pricing risks, questions for the EPC (engineering, procurement, construction) side of the freight transportation business.

Commentary

Negotiations for 2019-2020 shipping contracts will be difficult on a number of fronts.

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