IMO 2020: A Brief Overview
In 1973, the International Maritime Organization (IMO) developed a set of standards to reduce the emission of harmful gases from ships, known as the International Convention for the Prevention of Pollution from Ships (MARPOL). In order to reduce the amount of sulfur oxides emitted by ships, the IMO introduced Annex VI of the Prevention of Air Pollution from Ships in 1997. These standards have been revised twice, once in 2005 and last in 2010; as technologies improve, the emission limits have incrementally become stricter with each iteration. With the adoption of IMO 2020, also referred to as Sulphur 2020, the limit of sulfur content in shipsâ€™ fuel oil will be further reduced from 3.5% m/m (mass by mass) to 0.5% m/m.
This change will be enforceable from January 1, 2020.
Effects of Sulfur Emissions
Sulfur oxides are dangerous to human health and harmful to the environment. When ships or other engines burn fuel, they release sulfur oxides and nitrogen oxides into the air. The pollution can cause respiratory irritation and can have more severe effects from long-term exposure, which is especially dangerous to those living in port cities. These compounds also combine with atmospheric water to create acid rain. While it is not directly harmful to humans, this unusually acidic precipitation can have devastating effects on ecosystems. The most vulnerable environments are forests and lakes; with enough rainfall, soils may no longer be able to support life and aquatic ecosystems can be annihilated.
Looking Forward: Compliance and Costs
Shippers have two main paths toward compliance: first is to use low-sulfur fuels (LSFO) or to use scrubbers to clean emissions as they pass through the exhaust. Both options are expected to increase costs, which will likely be passed down the chain. While some operators are already compliant with the regulation, there are many that have yet to comply. There are concerns about how inspections will be conducted as some ports have yet to process the legislation and complete enforcement training.
More often than not, regulations that increase the cost of doing business see those costs fall on customers; there is no evidence that shows this will be any different. Freight forwarders should expect to see at least a portion of these costs passed to them. The sulfur requirements will come at a substantial global cost which will likely have effects outside of the logistics industry.