ICS Disappointment at IMO Fuel Study

Press Release
Wednesday, October 03, 2012
ICS Secretary General, Peter Hinchliffe

Switch to Low Sulphur Fuel has Implications for Shore Based Industry Too says ICS.


The International Chamber of Shipping (ICS), whose member national shipowners’ associations represent more than 80% of the world merchant fleet, has expressed disappointment and concern at a decision by the International Maritime Organization (IMO) to reject its call to accelerate a critical study into the global availability of low sulphur fuel for ships.


A small majority of IMO Members States, led by the United States, rejected an ICS submission to the IMO Marine Environment Protection Committee (MEPC), which was debated this week in London. Nevertheless, the IMO vote was very close indeed. As well as having the support of major shipping nations such as China and several open registers, ICS was supported by some EU Member States.


ICS was pressing for IMO to start work without further delay on a comprehensive fuel availability study that could consider the impact of all the changes required by the new MARPOL Annex VI regime, to reduce atmospheric pollution, before it is too late for the oil refining industry to respond and invest.


Shipowners are worried about whether sufficient fuel will be available to allow ships to comply with the strict IMO regulations on sulphur emissions and whether, as a result of insufficient supply, the costs for those ships that are able to obtain the required fuels might be prohibitively expensive. In some trades this could lead to significant modal shift to shore based transport, with negative consequences for congestion and the environment. These are issues that were not anticipated when the regulations were agreed.


Speaking after the vote at the IMO MEPC, ICS Secretary General, Peter Hinchliffe remarked: “Some governments still appear to have their heads in the sand with respect to fuel availability. What will be the impact of ships switching to distillate on the availability of diesel for road transport or heating oil for homes? We still think it’s essential that a global fuel study is carried out sufficiently in advance of 2020 to give the refiners adequate time to invest and react. The major refinery upgrading required could take a minimum of four or five years, perhaps longer, and we believe that completing the study in 2018 would simply be too late.”

ICS argues that the need to move forward the IMO study is more important than ever, especially as the EU has already decided that it will definitely implement the 0.5% sulphur requirements in 2020, even if the IMO study results suggest, as permitted by MARPOL, that full implementation should be postponed until 2025.“ICS has not given up, and we will bring the issue back to IMO next year” said Peter Hinchliffe. “The issue is just too important. The enormity of the switch to distillate and its economic impact on shipping, and indeed the world economy as whole, should not be underestimated or swept under the carpet.”


ICS emphasises that when the global requirement to switch to distillate was adopted in 2008, ICS supported the agreed IMO timetable as an acceptable compromise.However, if the switch to low sulphur fuel is to be successful, ICS believes that those governments that advocated such ambitious goals need to do everything possible to assure themselves and the industry that the refineries are able to deliver. ICS still believes this means undertaking the required studies of fuel availability as soon as possible.


There is already a formal mechanism in MARPOL Annex VI for IMO to complete a review, by 2018, of progress made towards meeting the demand for 0.5% sulphur fuel that must be used globally outside of Emission Control Areas (ECAs) by 2020 or 2025. However, ICS had suggested that a preliminary IMO study of the availability of compliant fuel, taking into account the introduction of the 0.1% sulphur in fuel requirements to be used in the Baltic Sea, North Sea and the North American ECAs in 2015, would provide a suitable test case. Such a study would provide a projection of possible scenarios resulting from the introduction of the 2015 0.1% ECA standard, against the background of the world market. This could then be considered in comparison with the real situation encountered in 2015.


Fuel is by far the largest operational cost for shipowners and has already increased in price by about 400% since 2000. However, the current 50% price differential between low sulphur distillate and the residual fuel oil that is currently in use is predicted to increase yet further if the new demand that will be created by the MARPOL requirements is not matched by increased supply.

Maritime Reporter July 2014 Digital Edition
FREE Maritime Reporter Subscription
Latest Maritime News    rss feeds

People & Company News

Odfjell Drilling in Tighter 2Q North Sea Market

Odfjell Drilling reports second quarter 2014 financial results showing a profit of US$29-million. Profit & loss Q2 2014 Operating revenue for Q2 2014 was USD 272 million (USD 289 million),

Brazil AHTS Contract Breakthrough for Havyard

Havyard says it is to deliver the ship design and equipment for four anchor handling tug supply (AHTS) vessels that are to be built and operated by the Brazilian

Darwin, Australia Scene of KAKADU Exercise Planning

Over 1,200 military personnel from the Asia Pacific and Indian Ocean regions have completed collaborative, tactical warfare planning during the first week of the

Environmental

BMT WBM to Showcase TUFLOW at World Bank Seminar

BMT WBM ( (BMT), a subsidiary of BMT Group Ltd, a leading international engineering and risk management consultancy, is delighted to announce that it will be presenting

Long Beach Cargo Operations Resume

Repair work begins after storm surges subsides The Port of Long Beach resumed full cargo-handling operations Thursday, Aug. 28, after a lessening of storm surges

Restoring the NY-NJ Harbor Estuary

Significant challenges often require a team effort. Restoring the New York-New Jersey Harbor Estuary is one of them. A group of professionals from the Army Corps of Engineers,

Fuels & Lubes

Rosneft and AVTOVAZ Strengthen Strategic Cooperation

Rosneft President, Chairman of the Management Board Igor Sechin and AVTOVAZ President Bo Inge Andersson signed an Agreement of development of strategic cooperation,

Ecospeed Fuel and Cost Saving Solutions at SMM

Ecospeed announced it will exhibit its line of fuel and cost saving solutions at SMM in Hamburg. Ecospeed and fuel savings Routine in-water cleaning results

Kongsberg to Supply FPSO Safety System

Kongsberg Maritime Engineering (KME), the wholly owned Engineering, Procurement and Construction (EPC) subsidiary of global maritime technology developer Kongsberg Maritime,

Marine Power

BMT WBM to Showcase TUFLOW at World Bank Seminar

BMT WBM ( (BMT), a subsidiary of BMT Group Ltd, a leading international engineering and risk management consultancy, is delighted to announce that it will be presenting

Daihatsu Joins ClassNK Research Project

Classification society ClassNK announced that it will embark on a joint research project together with Daihatsu Diesel Mfg. Co., Ltd. Through the partnership, ClassNK

New Double-ended Ferry for Norderney

New double-ended ferry serving the North Sea island of Norderney – Safe and eco-friendly maneuvering in shallow, high-sediment water using Voith Schneider Propellers Ferries

Government Update

British WWl Warship Refurbishment Project

Northern Ireland Office Minister, Dr Andrew Murrison MP, visited the historic HMS Caroline in Belfast’s Titanic Quarter as restoration grants are received, informs the UK Government.

Nine Share in US$6-B DoD Contract Modifications

The US Department of Defense informs that nine companies have each been awarded indefinite-delivery/indefinite-quantity fixed-price option-year two modifications

Jones Act is Critical to Conn. Economy

Study shows Connecticut shipbuilding industry worth $2.5 billion to state’s economy, supports nearly 23,000 jobs The American Maritime Partnership (AMP) joined

 
 
Maritime Careers / Shipboard Positions Naval Architecture Navigation Pipelines Pod Propulsion Ship Repair Ship Simulators Shipbuilding / Vessel Construction Sonar Winch
rss | archive | history | articles | privacy | terms and conditions | contributors | top maritime news | about us | copyright | maritime magazines
maritime security news | shipbuilding news | maritime industry | shipping news | maritime reporting | workboats news | ship design | maritime business

Time taken: 0.2503 sec (4 req/sec)