Proactivity and preparation needed now for 2020, says ABS’ Dr Kirsi Tikka

Proactivity and preparation needed now for 2020, says ABS’ Dr Kirsi Tikka
Dr Kirsi Tikka, executive vice president and senior maritime advisor, ABS

With the IMO 2020 sulphur cap entering into force in less than 15 months’ time, Dr Kirsi Tikka, executive vice president and senior maritime advisor, ABS has called upon the industry to proactively commit to preparing for the sulphur cap and urges for consistent enforcement of agreed measures to provide a level playing field for all.

Dr Tikka, who hails the IMO’s 2020 sulphur cap as biggest regulation since the IMO’s double hull requirement for tankers in 1993, says the 0.5 per cent cap on sulphur will test the industry’s commitment to regulation as comes into effect overnight. While the shipping industry can take some experience from the 0.1 per cent cap on sulphur implemented in designated Emission Control Areas (ECAs) in 2015, Dr Tikka says the magnitude of 2020 change is unparalleled and owners need to be proactive and prepare now, not wait for other to mandate.

However, many are taking a wait and see approach due to uncertainty on available and compliant low-sulphur fuels, while others are hesitant to alternative compliance option in the form of scrubbers due to their expense and whispers on a future ban on open-loop operation.

Compliant, low-sulphur fuel is expected to be the most popular option for compliance in 2020 with a predicted shift in demand from over 3 million barrels per day of heavy fuel oil (HFO) to predominantly marine gas oil (MGO) and compliant fuel, reports ABS.

The biggest concern facing those who choose 0.5 per cent compliant fuel blends, is the availability of specific fuel blends in various ports and whether these blends are compatible. Previous worries have been raised regarding the availability of fuel, and while this is not believed to be a direct problem in 2020, the difficulty in obtaining compatible and stable fuel blends could be seen as an issue related to 0.5 per cent fuel availability. Fuel suppliers will likely provide enough compliant fuel for 2020, Dr Tikka confirms, but a shortage of fuel blends at bunkering ports that are compatible with the fuel blends currently on the vessel could make it impossible for ships to be compliant if they cannot obtain a compatible fuel at their chosen port.

The fears shipowners and operators have around obtaining compliant and compatible fuel is exacerbated by the lack of information on what types of fuels will be available and where. Some of these concerns could be mitigated by fuel type and system configuration to some extent. Cleaning tanks now and ensuring the right fuel treatment procedures are in place are also critical steps to take ahead of IMO 2020. This type of fuel management will require an additional degree of planning and care that needs to be considered now and not in 2020.

Dr Tikka has made a call to fuel suppliers to provide more information on 2020 fuel blends, including updates on the developments on blended fuels to provide better clarity on compatibility and stability in 2020, which should help shipping companies take initial preparatory steps for the regulation. It has come to light that cases of fuel contamination and related operational issues, evidenced most recently in the US Gulf and Singapore, are major concerns for shippers in 2020. Until there is more clarity on fuel blends in 2020, Dr Tikka urges shippers to prepare themselves by agreeing deal with bunker suppliers so that can guarantee they will be able to obtain the fuel they need at a specific port.

James Bond, ABS director for advisory services also encourages shippers to carefully consider their trading routes when it comes to determining an efficient fuel strategy. He says that the trading profile of the ship is an important factor in determining the economics of adopting a scrubber or compliant fuel. While Mr Bond agrees that lessons will have been learned from the transition to ECAs in 2015, the ease of operating in 2020 will be partly determined by the availability of compatible fuel as the industry moves forward and as the landscape changes. Mr Bond reiterates Dr Tikka’s thought that the most important thing for shippers to do now is to obtain long-term contracts where bunkers are.

The refinery sector will play a large role in the development of fuels in 2020. The 0.5 per cent sulphur cap presents an opportunity for refineries to add capacity to produce low-sulphur fuel, or redistribute HFO to power the sector, both of which will have an impact on pricing and availability of fuels.

ISO is preparing publicly available info to provide guidance on application of ISO 8217 low-sulphur fuels. However, as ABS has warned, a standard can only address the fuel quality issues that have come to light. It doesn’t necessarily guarantee trouble-free operations.  

Speaking on renewable energies and alternative propulsion, Dr Tikka explains that while renewables offer an opportunity for zero carbon energy, the applications available today and used to provide a reduction in fuel consumption but are not yet ready for application to worldwide shipping. With future developments and work, Dr Tikka and ABS can expect more production of renewables. Many new energy sources and propulsion technologies are being tested, but more developments are needed to make them viable for worldwide shipping.

There is no silver bullet to fuel efficient or zero emissions shipping, but with further developments, technologies will improve and provide multiple options to improve operational efficiencies. Presently, technologies such as scrubbers have been slow to adopt because of their costs and it will be vital for the industry to show that the contribution of shipping to the global economy is seen and viewed as a positive contributor, verifies Dr Tikka.