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Fichte & Co seminar discusses IMO 2020 impact on Dubai and Singapore

01 Jul 2019

International legal firm Fichte & Co Legal has reportedly held an informative seminar at the JW Marriott Marquis, Business Bay in Dubai, UAE to discuss the IMO 2020 mandate and its impact on Singapore and Fujairah Port.

Its speakers believe the global marine fleet is set to experience great change in the coming six months and pointed out how Singapore and the UAE can continue to thrive through this impending change.

“The UAE has already established itself as a nation that prioritizes reinforcing a greener footprint and a more sustainable future,” said Jasmine Fichte, Legal Founder and Managing Partner of Fichte & Co.

“The implementation of the UAE 2021 vision, which entails a full pledged sustainable structure for the country’s future, accordingly aligns with the IMO2020 sulphur cap.

“UAE stakeholders dealing with HSFO (high sulphur fuel oil) should seek out a more sustainable plan to secure their position in the industry before the mandate is initiated and the seminar will enable forward-thinking to proactively plan for this.

“Alternative methods of vessel power generation and more innovation in wider industrial uses of fuel oil are required for the UAE as part of a secured plan for maritime to continue thriving in the both regionally and globally.”

Addressing the importance of compliance, Hessa Al Malik, Executive Director of Maritime Transport Sector at the Federal Transport Authority – Land and Maritime (FTA), emphasised, “IMO 2020 will soon be in full effect, with a significant reduction in maximum sulphur content of marine fuel allowed.”

“As a more stringent standard becomes the norm with the sulphur cap shifting from 3.5% to 0. 5% on January 1, 2020, ship-owners and marine vessel operators must be adequately prepared now to avoid any last minute hassles.

“With less than six months remaining, this timely seminar is a strong reminder, among other initiative done by the UAE, to prepare ship owner to take the necessary measures for the industry now, rather than later.”

She further added, “While many may be fretting the mandate, it should BE embraced as it will preserve the region’s natural resources, continue meeting a growing demand, and foster a greater environment for all.”

“Once the regulation is activated, ship-owners can either use IMO2020 compliant marine fuel with a maximum sulphur content of 0.5%, use alternative acceptable marine fuels like LNG, or seek alternative methods like installing of scrubbers to remove sulphur dioxide and dirtier particulates from their bunker fuel.

“Accordingly, The UAE has already started taking considerable measures for IMO 2020, the Port of Fujairah, which is the largest bunkering port in the Middle East, has banned the discharge of waste water with sulphur from engine exhaust gases.”

Commenting on the regional sulphur forecast, Pawan Sahni, Middle East Business Development Manager for DNV GL – Maritime said, “According to a study by Stillwater, alternative marine fuels, like LNG, will constitute for a very small percentage of vessel fuels by 2020.”

“As a result, the IMO2020 mandate will cause a dramatic demand shift for marine fuels used globally and a larger percentage of the shipping industry will switch to compliant 0.5% sulphur fuel. There will also be an increasing global demand for distillate fuels, like diesel and gas oil, as owners may prefer taking that route instead of opting for compliant fuel.”

Though the IMO has done its part to ensure awareness of the imminent sulphur cap, the question of whether ship owners have taken the necessary steps to appropriately prepare for it remains to be seen.

K Murali Pany, Managing Partner at Joseph Tan Jude Benny LLP, Singapore, said “I do not think the maritime industry has adequately prepared for the IMO2020 sulphur cap to kick into force.

“Many owners or charterers have not fully considered the impact or implications, or have adopted a ‘wait-and-see’ attitude to the regulations. Variables like compliant fuel availability, quality and the cost of such fuel, seem to be factors which the market wants to consider before taking any definitive steps.”

Pany further added that, “with the global sulphur cap regulations imposing a definitive set of obligations on ship owners, the Singapore MPA has published guidelines which are quite comprehensive and give ship owners an idea of how Singapore will go about approaching and enforcing these regulations.”

“My advice to all ship owners, regardless of location, is to take necessary steps to prepare. If you have a choice between doing nothing and hoping for the best, or doing something and preparing for the worst, it should always be the latter. By conducting due diligence and putting the appropriate protocols in place, you’ll be prepared for the worst. If the worst doesn’t happen, your processes will still be better than before.”

Photo credit: Fichte & Co
Published: 1 July, 2019


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