The Sulphur Cap in Shipping - It's time to act

The reduction of the MARPOL Annex VI global fuel sulphur cap from 3.5% to 0.5% came into force on 1 January 2020. As expected, the  introduction of a global sulphur cap has brought about radical change to the maritime industry and has posed challenges for shipowners and charterers alike. Many challenges relate to fuel availability, safety and compatibility as well as contractual and charter party disputes. If a ship is trading outside of the existing Sulphur Emission Control Areas (ECAs) they now need to burn compliant low sulphur fuels, or face potential fines, detentions or penalties.

IMO 2020, is the regulation (MARPOL Annex VI) that mandates a maximum sulphur content of 0.5% in marine fuels globally. This is a reduction from the previous limit of 3.5%. The push for this change is the need to reduce the air pollution that is produced by the sulphur content of the fuels that ships use. 

If you’re a shipowner or operator, difficult decisions are needed on which method of compliance to use. The best option for you may depend on several factors such as vessel type, vessel age and trading area. The five main compliance options are: burn distillates, burn hybrids or blends, install Exhaust Gas Cleaning Systems (EGCS), burn LNG, and use other alternative sources. Visit our compliance options area for more on the advantages and disadvantages of all options. 

Whether you’re an owner or a charterer, you will need to consider the technical and commercial issues to ensure your time charterparties and bunker supply contracts adequately deal with the new sulphur requirements. Some example clauses to be included are: bunker clauses and scrubber clauses. More information can be found in our contractual and charterparty area. 

The last decade has seen more stringent international and regional environmental regulations that aim to tackle shipborne air emissions. International legislation comes in the form of MARPOL, which is the very important IMO convention tackling pollution from shipping. Annex VI of MARPOL was created to prevent air pollution from ships, including sulphur oxides (SOx), nitrogen oxides (NOx), particulate matter (PM) and greenhouse gases (GHG) such as carbon dioxide (CO2) and ozone depleting substances. In addition to international legislation, some countries have created special emission control areas, which all have different rules. You will need to make sure that you always achieve the strictest sulphur requirement if there is a conflict between the local rules and the MARPOL global sulphur cap. For a full breakdown, visit our dedicated legislation area.