Alt fuels: the right choice. File image/Pixabay.
Flouting the new sulfur cap on bunker fuel may not make sound economic sense given the direction of travel of ship finance, argues Methanol Institute director Chris Chatterton.
Non-compliance by ship operators with the IMO2020 rule may afford a short-term economic gain, if not caught. But Chatterton, writing in shipping publication Tradewinds, argues that "alternative fuels cannot be discounted".
Not only do they improve ship operators' environmental performance but "ignoring alternatives fails to take into account the trend towards green finance, which is growing just as traditional liquidity decreases.
"Some alternative fuels are expensive.. because without massive subsidies they cannot be competitive".
"This might not matter provided the industry is prepared to accept an uneven playing field, although this would overturn decades of regulatory precedent," according to Chatterton.
Nevertheless, the industry should already be taking steps to define its post-2020 transition to clean fuel, he said.
"It could be that the ability to continue operating in the long term will depend on it, if social and political pressures on shipping continue to grow."
Under the Poseidon Principles, the provision of capital to ship owners would be linked to sustainable business goals. Eleven ship finance banks representing a fifth of the global ship finance market have signed on up to the Poseidon programme.