SSI: Financial Pressure to Reduce Bunker Bills "Simply Not There"

Alastair Fischbacher, CEO of SSI, says low bunker prices are preventing the shipping industry from feeling pressure to boost operational efficiency.

Ship operators are under no pressure to reduce their bunker bills, and low fuel prices are preventing the shipping industry from adopting operational and environmental efficiency measures, Alastair Fischbacher, CEO of the Sustainable Shipping Initiative (SSI), has told Maritime CEO in a New Year's interview.

"The real financial pressure to reduce fuel costs is simply not there at the moment, as against 18 months ago when distillates were trading at $1,000 per tonne," said Fischbacher.

Indeed, Ship & Bunker data shows that the average price for MGO across Singapore, Rotterdam, Houston, and Fujairah rose above $900 per metric tonne (pmt) on July 3, 2012 and did not fall below the $900 pmt threshold again until over two years later - on September 11, 2014.

During that time the average price across the four ports hit a high of $1035 pmt, but on Wednesday had fallen to $383 pmt.

Fischbacher, pointing to the new CO2 emissions Monitoring, Reporting and Verification (MRV) regulation that is set to come into force in 2018, said "regulations like this keep sustainability front of mind within the industry, but also raises concerns about how to ensure a level playing field."

Emissions Control Area (ECA) regulations are an example of an unlevel playing field within the shipping industry, says Fischbacher.

"There is real concern within the industry that current practice does not ensure shipowners and operators are all adhering to new regulations, which creates the foundation for, and danger of a two-tier system, where those that invest in compliance are worse off than those that do not," he explains.

Fischbacher's views have been shared by many since the introduction of ECAs, with Niels Bjorn Mortensen, head of regulatory affairs at AP Møller-Mærsk, saying in October that current efforts to uphold Northern Europe ECA rules has left much to be desired.

However last year it was reported that compliance is actually higher than many expected, with data from the Danish Environmental Protection Agency indicating only 6 percent of spot checked vessels were not in compliance, of which only 2 percent indicated sulfur levels above 0.3 percent.

Ship & Bunker observed that, given there are no residual fuel products with a 0.3 percent or lower sulfur content, the data suggests the majority of those in non-compliance are unlikely to be seeing any financial gain as a result.