IMO2020: Industry Faces High Bunker Prices and One Unholy Mess

Esben Poulsson, Chairman of the International Chamber of Shipping. Image Credit: ICS

The Shipping industry is on the brink of "chaos and confusion" unless the International Maritime Organization (IMO) urgently resolves some "serious issues", the International Chamber of Shipping (ICS) warned today.

When the global 0.50% sulfur cap that comes into force on January 1, 2020, most vessels are expected to switch to using a low sulfur fuel for compliance, but ICS warns that how the industry is expected to achieve this is spectacularly unclear without IMO intervention.

"The shipping industry fully supports the IMO global sulphur cap and the positive environmental benefits it will bring, and is ready to accept the significant increase in fuel costs that will result.  But unless a number of serious issues are satisfactorily addressed by governments within the next few months, the smooth flow of maritime trade could be dangerously impeded," ICS Chairman Esben Poulsson said.

"It is still far from certain that sufficient quantities of compliant fuels will be available in every port worldwide by 1 January 2020. And in the absence of global standards for many of the new blended fuels that oil refiners have promised, there are some potentially serious safety issues due to the use of incompatible bunkers."

"Governments, oil refiners and  charterers of ships responsible for meeting the cost of bunkers all need to understand that ships will need to start purchasing compliant fuels several months in advance of 1 January 2020.  But at the moment no one knows what types of fuel will be available or at what price, specification or in what quantity.  Unless everyone gets to grips with this quickly we could be faced with an unholy mess with ships and cargo being stuck in port."