Marine Link
Tuesday, March 19, 2024

Emission Control to Cost Additional $100 bln for Shipping Lines

Maritime Activity Reports, Inc.

March 30, 2015

 The implementation of a global sulfur cap slated for 2020 is estimated to add an additional $50-100 billion to the shipping industry's annual fuel bills, Lloyd's List reports.

 
The spread between heavy fuel oil (HFO) and Emission Control Area (ECA) compliant marine gas oil (MGO) is expected to remain in the range of $250 and $400 per tonne, regardless of different price fluctuations, says Niels Bjorn Mortensen, head of regulatory affairs, Maersk Maritime Technology.
 
The estimate could change depending on the future price of blended products like hybrid fuels and whether scrubbers become more common, he added.
 
An updated global cap is expected to limit sulfur content in marine fuel to 0.5 percent from the current 3.5 percent from 2020, although a fuel availability study scheduled for 2018 could still see that date pushed back to 2025.
 
European rules, however, will come into force in 2020, regardless of the fuel review decision.
 
Meanwhile, Boston Consulting Group (BCG) says box shippers’ investments to comply with sulfur regulations should pay for themselves, but it will be crucial to make the right choices at the right time, and payback times may be lengthy.
 
According to the consultants' analysis, "stakeholders in the container segment will need to invest $159 billion from 2015 through 2030, but companies will save $179 billion in operating expenses as a result—a net gain of $22 billion."
 

Subscribe for
Maritime Reporter E-News

Maritime Reporter E-News is the maritime industry's largest circulation and most authoritative ENews Service, delivered to your Email five times per week