Ship owners have been through stormy water of late – and things could get a lot choppier out there thanks to a global push to clean up fuel.
While Europe and the US have been controlling emissions in their coastal waters for the past decade, the International Maritime Organization is about to extend regulation to cover the entire world. The new rules will mean around 2-2.5 million bpd of high-sulfur oil converting to low sulfur. That’s a big shift, it equates to almost 180 million tpy – 70% of the fuel used by the shipping industry – switching from 3.5% sulfur to below 0.5%. Compliance is likely to cost the shipping industry US$60 Billion, according to consultants at Wood Mackenzie Ltd.
Ship owners have three options to respond: