The International Maritime Organization’s move to impose a stricter global 0.5% sulfur cap on bunker fuel from 2020 would present the shipping and bunker fuel markets with challenges such as enforcement and compliance, International Bunker Industry Association CEO Peter Hall said Thursday.
The IMO’s current sulfur cap is 3.5% for global bunker fuel outside Emission Control Areas, which have had a 0.1% sulfur limit since January 2015.
It is expected to decide whether to impose the 0.5% cap globally by 2018 and impose any such regulation two years later, Platts reported earlier.
Speaking at the 14th Asia Pacific Maritime 2016 Conference in Singapore Thursday, Hall said compliance with current sulfur limits was being met through the use of distillates like gasoil, exhaust gas cleaning systems known as scrubbers and, in some cases, by the use of alternative fuels.
“But possible implications of a global cap in 2020 could see non-compliance… as distillate prices for marine and inland markets get pushed up because of more demand,” he said.
“The implementation may also accelerate scrubbing technology take-up, which may leave refiners uncertain about investing to meet the new demands of the marine market if the uptake of scrubbing is strong,” he added.
Hall said the drafting of proper enforcement policies would be crucial for ensuring a smooth transition to tighter sulfur limits, and cautioned against the use of a “one-size fits all enforcement policy”.
“Unless there is effective enforcement, any policy change will not take effect. An enforcement policy where a higher penalty is applied in cases of gross negligence is advocated, [rather than] cases of inadvertent management,” he said.