BIMCO raises serious concern over data on available fuel ahead of MEPC 70 sulphur decision

Overview

BIMCO has today voiced serious concerns about some of the conclusions of the official study that will inform the decision of the MEPC over the implementation date of the 0.5% global sulphur cap.

BIMCO, the world’s largest international shipping association, has today voiced serious concerns about some of the conclusions of the official study that will inform the decision of the MEPC over the implementation date of the 0.5% global sulphur cap.

The official IMO study which assessed the relevant availability of fuel oil has failed to fully address the IMO’s terms of reference – in BIMCO’s view – in several critical areas:

  • On fuel oil quality. A significant amount of the fuel oil that the IMO study concludes will be available for marine use is unsafe to store and use onboard ships.
  • On how an assessed shortage of sulphur removal capacity in refineries will be resolved so that capacity would be in place by 2020.
  • The study fails to model the disruption that an overnight introduction of the global cap (from 31 December 2019) would cause.

As a result, BIMCO states it is not possible to determine that the global refining industry will have the capacity to produce enough marine fuel by 2020. BIMCO also raises concerns that the supply of fuel to other sectors of the global economy could face major disruption if the scenario is not addressed beforehand.

BIMCO, among others, have funded an independent supplementary study (carried out by EnSys and Navigistics) to assess the availability of marine fuel, which addresses all the above issues. This study concluded that it is unlikely that there will be sufficient low sulphur fuel available in 2020, while maintaining uninterrupted supply of fuel to all other sectors of the global economy.

Lars Robert Pedersen, Deputy Secretary General at BIMCO, said:

“It is clear that the IMO study is flawed, meaning it is not possible to determine from the study that there would be sufficient fuel available in 2020. On that basis, our opinion is that it would be irresponsible for IMO to make the decision to go for 2020 at MEPC 70 in October. There is clearly a need for additional analysis to ensure the supply chain for global trade is not seriously disrupted and developing nations are not hit hard by a lack of affordable energy”.

“This is not about the cost of low sulphur fuel for ships – that has long been known. We know that the shipping industry will buy the fuel they need. But if it is in short supply, the cost will rise not just for shipping but for all users of the fuel. This will price those in poorer economies out of the market”.

“It’s a complex issue – but the difficulties in ensuring sufficient refinery capacity and the disruption caused by an overnight introduction have to be thoroughly taken into account”.

ENDS

Notes to Editors

  • BIMCO is the world’s largest international shipping association, with 2,200 members in around 130 countries.
  • We provide a wide range of services to our global membership – which includes shipowners, operators, managers, brokers and agents.
  • BIMCO’s core objective is to facilitate the commercial operations of our members by developing standard contracts and clauses, and providing quality information, advice and education.
  • BIMCO promotes fair business practices, free trade and open access to markets and we are a strong advocate for the harmonisation and standardisation of all shipping related activity.
  • BIMCO actively promotes the application of globally agreed regulatory instruments – we are accredited as a Non-Governmental Organisation (NGO) with all relevant United Nations agencies and other regulatory entities.
Lars Robert Pedersen
in Copenhagen, DK

Coronavirus

Access BIMCO's COVID-19 related articles and advice.

Read more

VPS Bunker Alerts

Veritas Petroleum Services (VPS) publish regular Bunker Alerts based entirely on fuel samples and have kindly permitted BIMCO’s Members to access this information.

The Bunker Alerts are not intended to be an evaluation of overall bunker quality in the port or area concerned, but usually highlight a specific parameter within the fuel which has raised a quality issue.

 
 

ELSEWHERE ON BIMCO

Contracts & Clauses

All of BIMCO's most widely used contracts and clauses as well as advice on managing charters and business partners.

Learn about your cargo

For general guidance and information on cargo-related queries.

More about cargo

BIMCO Publications

Want to buy or download a BIMCO publication? Use the link to get access to the ballast water management guide, the ship master’s security manual and many other publications.