Today, our impact on the environment takes center stage in every major discussion and decision taken at a global level.
The debate has reached maritime transport. Over 90% of global trade is carried by ships across our water bodies. Our way of life and access to products and services would be forever changed without shipping, intercontinental trade, the transport of raw materials, and the import/export of affordable food and manufactured goods.
So, as seaborne trade continues to expand, how is the industry working towards a more sustainable future?
The International Maritime Organization (IMO) has put in place a January 1st 2020 deadline for the world maritime fleet to reduce sulfur emissions from bunker fuel from 3.5% presently down to 0.5%.
This leaves ship owners around the world with two options: use cleaner but more expensive marine gas oil, or install scrubbers to filter sulfur from dirtier oil.
There was initially a stalemate between owners and the IMO to see who would blink first. This led to speculation on prices of high sulfur fuel oil (HSFO), as many believed that owners would be forced to switch to low sulfur fuel oil (LSFO) pushing the price of HSFO down, in turn making the installation of scrubbers a viable option. A market leader in scrubber technology, the Finnish giant Wärtsilä, puts the cost of a single scrubber system between 3 and 12 US$ million per vessel.
Scrubbers are gaining in popularity as owners from various shipping sectors reveal investments in the technology, including most recently Hapag-Lloyd, DHT Holdings, Maran Tankers, Safe Bulkers, and Star Bulk.
However, shipping giant Maersk recently announced that it will not be solely investing in scrubbers as it does not see the technology as a long-term solution to cleaner vessels. Maersk will be using a combination of LNG fuel, low sulfur fuel oil, and scrubbers on its fleet.
The new compliant fuels are expected to push the container shipping industry’s fuel bill by US$15 billion, with Maersk Line alone having to pay US$2 billion more for fuel on an annual basis. Hence, diversifying and pursuing cost-efficient investments - including scrubbers - is a sound strategy given the fast-approaching deadline for the enforcement of the new rules.
Certainly, we are seeing a renewed focus on the health and sustainability of our planet. With end users and consumers becoming more environmentally aware, there is an urgent need for governments and trade organizations around the world to step up their efforts in the fight for a cleaner-greener planet.
With autonomous ships, wind and solar powered ships, and drones for delivery the change is certainly underway.
CWT Energy, Resources & Marine remains at the forefront, shaping our customers' travel programs to achieve efficiency and sustainability in a challenging and changing environment.
We wish the global maritime sector fair winds as it steps into a new chapter of sustainable shipping.
