21 Oct 2019
On January 1st 2020, the International Maritime Organisation (IMO 2020) will implement new, stricter rules to reduce sulphur emissions by 85%.
The new regulations demand that the fuels vessels consume, contain less than 0.5% sulphur, as opposed to the previous standard of 3.5%.
In the so-called Emission Control Areas (ECA zones) even stricter regulations are maintained, which limits the sulphur content of fuels to 0.1%.
These environmental areas currently cover Northern Europe, the Baltic Sea area, USA, Canada and parts of Asia.
How can the new requirements be met?
- Scrubbers: a scrubber cleans the exhaust gases of a ship’s main engine by pumping water through a funnel
- Switch to Very Low Sulphur Fuel Oil (VLSFO)
- Switch to non-petroleum based fuels such as LPG or LNG
It appears most carriers are choosing the clean fuel option.
What does this mean for you?
Carriers have announced their expenses made to comply with these rules, will be charged to the freight paying party. Most shipping lines will implement the surcharge as per November 1st, 2019.
The amount of the surcharge, as well as the name, varies per carrier and per area.
Low Sulphur or ECA Surcharge
As mentioned before, in the dedicated Emission Control Areas (ECA’s) the use of even cleaner fuel is mandatory. This fuel is even more expensive and will, therefore, be charged separately. Aside from the surcharge to comply with IMO 2020, carriers will also still invoice a Low Sulphur Surcharge or ECA Surcharge, if applicable.
This surcharge is not a fixed amount; it varies by carrier and routing.