Policy and regs update 06/09

Everyone is talking about IMO 2020. The tighter emissions regs are forcing ship owners to retrofit scrubber technology (only about 5 per cent of the global trading fleet of about 80,000 ships has done so yet), or to burn more expensive low sulphur fuel oil or marine diesel oil, both of which have supply issues as refiners are yet to complete the investments required to upgrade products to meet the new regs. An increasingly popular alternative is to go for LNG bunkering. The passenger shipping market is doing this, as it tends to refuel at hubs and to have a clear forward fuel demand curve. Cargo vessel owners are yet to be convinced. Spot markets, with their vagaries, short-frequency cycles and flexbiity, will have to wait for LNG bunkering to be more widespread before ship owners regularly launch gas powered vessels. Alternaitve fuels such as methanol, hydrogen or even nuclear remain (exhaust) pipe dreams for most. The final alternatives are to ignore the regs or choose another business. The shipping industry, via its associations, continues to harangue the IMO for badly thought out rules, but the IMO shows no sign of losing face and backing down….yet.