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North P&I urges shipowners to 'act now' ahead of 2020 sulphur cap

P&I club concedes that the process of selecting a compliance option 'is not a simple choice'.



Act now: North P&I says it can help members make informed decisions on options for compliance and address the potential contractual and charterparty pitfalls that come with the new rules. Image credit: Pixabay CC0


Updated on 11 May 2018 12:39 GMT

North of England P&I Club (North P&I) has urged shipowners to "act now" in preparation for the upcoming global cap on the sulphur content of marine fuel in 2020, whilst also conceding that the process of selecting a compliance option will not be easy for maritime firms.

"There are several options open to shipowners, with the majority currently opting for distillates, perhaps keeping one eye on the development of cheaper hybrid fuels, blends or compliant residual fuels. The choice will come down to what is right for the vessel and what is economically viable," North P&I said.

The UK-based P&I club outlined five available compliance options - distillates, hybrid blends, scrubbers, LNG and emerging fuels (methanol, LPG, stored energy - hydrogen fuel cells and batteries) - explaining that there are pros and cons with each, mostly concerning fuel availability, onboard fuel management, capex and opex and maintenance requirements.

"It is not a simple choice and the decision on what method of compliance is best depends on a number of factors, such as vessel type, trading area and indeed its expected remaining life," North P&I stressed.

Another issue that should be considered, North P&I noted, is the amount of time a vessel spends within emission control areas (ECA) as well as the impact of changing over fuels when entering or leaving these areas.

Additionally, it is possible that new ECAs may emerge over the coming years, North P&I pointed out.

The mutual maritime insurance provider posited that in some cases it would be disadvantageous to limit a vessel to one method of compliance.

"The best solution might be multi-fuel, such as the ability to burn both LNG and distillates or perhaps EGCS and hydrogen fuel cells," North P&I observed.

Referring to the impact on contracts, North P&I said time charterparties will require close attention and that many aspects of all charterparties will also need to be reviewed, whilst also anticipating challenges for ships already in long-term charterparties that span the enforcement date of January 1, 2020.







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