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The 2020 0.50% sulphur limit for fuel oil used outside emission control areas will undoubtedly create operational issues for crews onboard ships. The International Organization for Standardization (ISO) has now issued a letter in this regard rebutting these claims.
The safety challenges connected with the implementation of the 0.50% sulphur cap are numerous, but not insurmountable. The issues are to some extent known from the implementation of the sulphur emission control areas (SECA) in 2015, among others loss of power, leaking fuel and lower flashpoints. Other issues have to be managed by digging out the experience from the 1980’s with very bad fuel oil quality e.g. instability and incompatibility.
The new BIMCO magazine the “Bulletin” is out and zooming in on challenges and questions asked ahead of the 2020 sulphur cap. “Sulphur cap consequences will draw focus for two years,” BIMCO’s Secretary General, Angus Frew, points out in his foreword. Also, read the latest market analysis by Peter Sand and read why shipowners urgently need a fuel-management plan.
BIMCO has published two sulphur content related bunker clauses which are now available on the BIMCO website and on SmartCon, BIMCO’s contract editing solution.
BIMCO has produced two clauses for time charter parties to address key contractual issues relating to the switch to fuel with a maximum sulphur content of 0.50% as of 1 January 2020. The two clauses are the 2020 Marine Fuel Sulphur Content Clause, which replaces the BIMCO Fuel Sulphur Content Clause 2005, and the 2020 Fuel Transition Clause, which deals with switching between fuel with a maximum sulphur content of 3.50% and fuel with a maximum sulphur content of 0.50% by 1 January 2020. Both clauses should be incorporated into time charter parties. This clause was published on 10 December 2018.
Several South Korean ports will have designated national sulphur emission control areas from midnight 1 September 2020.
BIMCO expects freight rates will once again come under pressure after the end of the high seasonal demand in Q4, as well as the boost from the sulphur cap. The fleet growth of 6.3% in the crude oil tanker market and the 4.8% growth in the oil product fleet will have its consequences on the supply and demand balance.
2020 marks a milestone for the shipping industry with the IMO 2020 Sulphur Cap set for implementation on 1 January 2020. Join BIMCO’s Chief Shipping Analyst, Peter Sand, as he offers his take on what the year will bring for the container shipping segment and the shipping industry in general.
Technical, regulatory and financial aspects of the 2020 global fuel sulphur cap regime understandably loom large in people’s minds. But the importance of the contractual dimension should not be overlooked. BIMCO is forging ahead with an all-encompassing 2020 Clause for charter parties, which should be published in November.
