5 Oct 2012
IMO decision on fuel study sparks concerns for price hikes in 2020
The International Chamber of Shipping (ICS) fears the rejection of a call to speed up a major fuel availability study – preparing the maritime industry for The International Convention for the Prevention of Pollution from Ships (Marpol’s) rules on low-sulphur fuel – could lead to inflated fuel prices in 2020. This is when more stringent global sulphur limits come into effect and infrastructure will have to be adjusted accordingly.
The ICS made a bid to accelerate its ‘critical’ study into the global availability of low-sulphur fuel for ships at a meeting of The International Maritime Organization (IMO) Marine Environment Protection Committee (MEPC), at the beginning of October in London. But the majority of IMO member states voted against the motion and the study will continue, as planned, for completion in 2018.
The ICS has since expressed ‘disappointment’ at the verdict.
“The major refinery upgrading required could take a minimum of four or five years, perhaps longer, and we believe that completing the study in 2018 would simply be too late,” said ICS Secretary General, Peter Hinchliffe.
The main impact on the superyacht industry is the ICS’ prediction that insufficient preparation could lead to dramatic rises in low-sulphur fuel prices when Marpol comes into effect under ten years from now.
“Shipowners are worried about whether sufficient fuel will be available to allow ships to comply with the strict IMO regulations on sulphur emissions and whether, as a result of insufficient supply, the costs for those ships that are able to obtain the required fuels might be prohibitively expensive,” read the ICS statement.
Udo Kleinitz at ICOMIA agreed, stressing that the concern is not so much the blanket requirement to convert to low sulphur fuel, but prices.
“Today’s marine engines used on yachts do not operate on Heavy Fuel Oils with its significantly high contents of sulphur but on good quality fuels. The engine manufacturers generally limit sulphur content in fuel to a level far below what is being discussed here”, he said. The knock on effect of the Marpol annex VI regime, the regulation enforcing low sulphur fuel, is more likely to be inflated prices.
“If the shipping industry moves from heavy fuel oil to diesel there could be a higher demand for distilled fuels for diesels and that could drive the prices up,” he said.
The IMO has rejected ICS' call for more planning for Marpol before. Clearly the international body does not believe there will be much difference seen if work begins quicker, or if more studies are conducted.
In August the IMO Environment Protection Committee rejected the suggestion by ICS to conduct a ‘preliminary study’ before 2018. In its assessment of the proposal the IMO said a pre-feasability study was “supplementary (and) unnecessary and would not provide any additional certainty with respect to the availability assessment methodology currently under consideration.”
In 2020 the Marpol annex VI will require the maximum sulphur content of fuel to be 0.5%, down from the current 3.5% rate. In SOx Emission Control Areas (SECAs) the sulphur limit will be even lower, and the requirements will come sooner, with the 0.1% limit applicable to the Baltic Sea, North Sea and the North American ECAs by 2015.
Add a comment
Other Business News
SuperyachtNews.com has spoken to Begüm Doğulu, arrested in January on charges of fuel smuggling, who says the charges against her have been dropped. Begüm Yachting continues to operate, therefore, as normal. More
The Australian government is to increase its Carbon Tax rate on marine vessels, from 1 July 2013. It was confirmed to SuperyachtNews.com that superyachts seeking permanent or temporary importation would be subject to the duty. More
After assuming operational control of its most recently acquired shipyard, Peene Werft, on 1 May Lürssen has confirmed to SuperyachtNews.com that it has no intention of moving any superyacht work to the yard. More
A US firm has announced plans to build a 'space hotel' and the world's first covered marina on a man-made island off Barcelona. It features immersive technology offering guests the experience of being in outer space. The mayor of Barcelona has objected on More
- Superyachts in private aviation's Chinese slipstream
- Loher facing insolvency if no buyer is found
- 'Triton' sold at auction for US$11 million
- Jamaica superyacht flag gives competition a run for its money
- Yacht Path faces supervision and investigation under trustee
- Victor Muller: Preserving yachts by building value
Superyacht Intelligence Data
Most Recent Comments
- No steel and captain-less yachts – a viable vision for the future? More
- “Company goes free” critique on Costa could be levelled at superyacht sector More
- Jamaica superyacht flag gives competition a run for its money More
- Michael Payne appointed CEO of Camper & Nicholsons International More
- FMC issues warning on yacht transport More
Helkama Bica Oy
Helkama is specializing in development and production of marine and offshore cables. Our experience in this field goes back more than thirty years. We produce only halogen free cables and the cable range include both flame-retardant and fire resistant cables. Helkama marine cables are approved by all major classification societies.
For 40 years Pantaenius has been providing yacht insurance to yacht owners all over the world.
Nautic Crew International, Inc.
Nautic Crew Intl is a Crew placement company started by yachting professionals that truly care about your future crew because we understand the dynamics of life onboard. When it comes to hiring new crew or looking for a position, Experience the Difference!!
ASEA POWER SYSTEMS
ASEA POWER SYSTEMS is the Marine Industry Leader for Shore Power Conversion equipment ranging in power from 8kVA - 1000kVa.
Bond TM is an independent consultancy company for AV, IT, communication, navigation and security systems. We manage new builds and refits projects for the most advanced super yachts and provide to the industry the best 24/7 IT support.
Reckmann Yacht Equipment GmbH
Reckmann Yacht Equipment GmbH is a specialist company for reefing systems, masts and hydraulics and will celebrate the 120th anniversary in 2012. Today, the company is one of the leading producers and traders of headsail reefing equipment and is a synonym for quality, continuity and innovation.