Mr. Kitack Lim, Secretary-General of the International Maritime Organization (IMO), today in his opening address of the seventieth session of the Marine Environmental Protection Committee (MEPC 70), said he was looking forward to a decision being made this week on whether a global 0.50 percent sulfur cap for marine fuel will come into force in 2020 or 2025.
The decision promises to be one of the most influential forces that will shape marine fuel markets over the next decade and beyond.
Addressing delegates and highlighting some of the many topics that will be debated during this week's event, Lim said: "You will also be considering the global sulphur cap implementation date based on the review of fuel oil availability as required by regulation 14.8 of MARPOL Annex VI, taking into account the final report of the Steering Committee established at MEPC 68. I would like to thank members of the Steering Committee which was ably led by its coordinator, Mr. Harry Conway of Liberia.
The IMO has stated very clearly that the decision to go with 2020 or defer the cap to 2025 should be based on the outcome of its fuel availability report. That study supports the 2020 date. However, an independent study submitted to the IMO supports the 2025 date. Meanwhile, 50-year industry veteran Rudy Kassinger has labelled both studies as an "exchange of ignorance" as "neither one has any idea what the world's 100+ refiners are planning to do in future years."
But if some of the industry's talking heads are to be believed, all that is irrelevant and the decision will be entirely political. The EU has also said it will implement the cap in 2020 regardless of what IMO decides. If it does, and IMO goes with 2025, some have expressed worry that this will lead to a disastrous patchwork of regional regulations, while others say it will allow for a much needed phased introduction of the cap.
One thing that all parties seem to agree on is that the current state of limbo helps nobody, and a decision needs to be made so all stakeholders can start to plan accordingly.
"Your Committee agreed at its last session, in principle, to take a decision at MEPC 70 on the implementation date and I look forward to the results of your deliberations and your decision so that the shipping and refinery industries and other stakeholders can plan ahead."
While a decision on the sulfur cap is certainly expected at MEPC 70 this week, IMO has already highlighted that it is possible the decision will be made at a later date.
"The MARPOL Annex VI Regulation 14.8 requires that the review 'shall be completed by 2018'. This could be interpreted as a decision having to made, at the latest by either MEPC 71 (May 2017) or MEPC 73 (Autumn 2018)," said IMO in an FAQ on the matter released last month.
"However, MEPC 69, taking into account that the review would be completed and submitted to IMO in time for consideration by MEPC 70, agreed in principle to take a decision at MEPC 70."
Other key bunker related matters up for consideration this week include the adoption of draft amendments to MARPOL Annex VI on mandatory requirements for ships to record and report data on their fuel consumption together with additional data on proxies for the "transport work" undertaken by the ship.
Also highlighted by Lim is the consideration this week of the proposals to designate additional emission control areas (ECAs) for NOX Tier III control in the Baltic Sea and the North Sea - the so-called NECA.
