Shipping industry is going greener from 01 January 2020

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There has never been a bigger emphasis and determination from the shipping industry to go green as now.  Over the last few years, the industry has shifted its focus in the battle to improve the air quality in coastal areas by embracing new stringent global sulphur emission standards that come into effect from 1 January 2020. This is a global regulation that is being applied to all shipping worldwide by the International Maritime Organisation (IMO). It will deliver a substantial reduction of sulphur emissions from the sector by 77% and have health benefits for coastal communities.

Thousands of ships globally have already started to prepare for the IMO 2020 Sulphur Cap by changing to less polluting fuels or by investing in exhaust gas cleaning alternatives. A major preparation and awareness campaign has been underway for more than a year to ensure that ships, fuel suppliers, governments, and other stakeholders are ready for one of the most crucial changes that the industry has ever embarked upon.

The transition to cleaner fuels should not only be seen as part of the current regulatory requirement. In addition to significantly reducing shipping emissions, it is also expected to help create the foundations for the next energy transition phase and start making the business case for shipowners to pursue further improvement in fuel efficiency.

Although the change is hugely exciting, inevitably it comes with major challenges. The requirement for cleaner fuels will push up the energy bills of ships, and subsequently, the transport cost. For instance, new bookings for ferries in the Irish Sea routs might potentially be subject to an increase of fee for passengers and vehicles travelling from 1 January 2020.

Also, there is plenty to be nervous about. Fuel safety is poised to be one of the industry’s top challenge for 2020. However, the year ahead could also prove a key turning point in how the IMO regulates the fuel supply chain. Having been more lenient in the past, it is time governments adopt a proportional response to marine fuel safety as they do for the transport industries ashore.

The global nature of the industry also means that enforcement is critical. Unfortunately, many governments have yet to sketch out how they are going to ensure consistent implementation and enforcement of the regulation. This is particularly important in ensuring compliance with the IMO standards and maintaining a level playing field. Fuel availability is also another challenge that is expected to create operational challenges for the industry.

The IMO has already taken some steps towards addressing implementation issues by giving governments and industry guidance. Despite these challenges, the direction remains strong as the shipping industry tackles the challenge of going green.

For more information contact:

Anna Ziou

Policy Director

020 7417 2841 / 07850 916151

aziou@ukchamberofshipping.com