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North P&I: 2020 challenges not all just technical

14 May 2018

The shipping industry’s commitment to consume 0.5% sulphur limit marine fuel in 2020 will also bring about non-technical types of challenges to shipowners, believes marine mutual liability insurer The North of England P&I Club.

“The challenges are not all just technical. Charterparties, where the obligation to provide bunkers is on the charterer will require close attention,” it says.

“This is a far more pressing matter for vessels already in long-term charterparties that span the enforcement date of 1 January 2020.”

The P&I club, meanwhile, noted that the majority of shipping companies intend to burn distillate fuels in their vessels’ engines and boilers to meet compliance with the 2020 MARPOL Annex VI global sulphur cap.

“In time, it is likely that a proportion will turn to hybrids, blends or any newly developed compliant residual fuels, depending on bunker prices and availability,” it notes.

“A smaller proportion has opted to install scrubbers and continue burning high sulphur residual fuels.

“Some shipowners are opting for LNG but retaining the ability to burn distillates by installing dual fuel (DF) engines. We expect the emerging fuels market will be very niche.”

The various solutions chosen by shipowners each come with their own pros and cons, mostly concerning fuel availability, onboard fuel management, capital expenditure and operational expenditure and maintenance requirements, it adds.

“It is not a simple choice and the decision on what method of compliance is best depends on a number of factors, such as vessel type, trading area and indeed its expected remaining life,” advises the organisation.

“The proportion of time spent within emission control areas (ECAs) should also be considered as well as the impact of changing over fuels when entering or leaving these areas.

“The 0.1% sulphur cap currently in operation within the ECAs will remain in force and it is possible that new ECAs may emerge in coming years.”

Photo credit: Manifold Times
Published: 14 May, 2018

 

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