Sulphur cap demands 2020 vision

It is no surprise that a new coalition is vying for changes to the sulphur cap just 15 months before it comes into effect. While it is unlikely the IMO will endorse the proposal as it stands, it will undergo a painful discussion about the realities of the cap that could result in a very public nod to lenient enforcement.

News ID: 80211

Date: 21 September 2018 - 11:04

A proposal to meddle with the 2020 sulphur cap could institutionalise lenient enforcement from the outset

THE 0.5% sulphur cap to be introduced in 2020 permeates, and usually dominates, every discussion on the challenges that face the shipping industry.

So it would be naive not to expect late complications ahead of its implementation.

One has emerged in the guise of a proposal by leading flag states and shipping associations to bring in an “experience building phase” in 2020.

The move is a last-ditch effort at a less painful adjustment from an industry that has seen the writing on the wall for a decade. It is likely to disrupt the upcoming IMO environmental meeting next month, which was expected to focus on decarbonisation efforts.

Procedurally, the cap cannot officially be pushed back, so technically speaking this is not a move for a postponement.

But any attempt to sanction leniency in the early days of enforcement would amount to a grace period, according to those owners who have invested heavily in order to meet the deadline.

The proposal is purposely vague and open to interpretation, but two points stand out; vessels should not be unduly penalised during the proposed experience building phase; and the exercise could result in further proposals to modify the regulation.

Reaction has centred around the former rather than the latter point, which tells you everything you need to know about the industry and the goal of the paper itself; enforcement and the so-called level playing field are the absolute priorities.

At its foundation is uncertainty over the safety and stability of low-sulphur fuels and blends which are not commercially available and whose properties are unknown and largely untested.

But the vast opposition to the proposal from inside the industry, ranging from owners to environmental NGOs, shows it is weary of change.

And although the fuels are not yet commercially available, certain owners and operators, such as Cargill, are currently testing low-sulphur fuels on their vessels. The reality is that the transitional period has already begun.

But the proposal is not directed at owners or even the regulators, it addresses the oil majors and fuel makers, and makes clear the industry’s anxiety over the composition and effects of these unknown fuels.

Will the majors and fuel makers care?

Unlikely, considering that the IMO has no jurisdiction over them and their priority will remain profit, and that secrecy is a tool to get ahead of the competition.

Whatever the outcome of the discussion in October, the least the proposal’s sponsors will get is proof that they formally tried to address these concerns and their pleas fell on deaf ears.

Realistically, the paper could generate an explicit recognition that port authorities should be more sympathetic to non-compliers who have good reason for their transgression. That is not a far-fetched assumption. In fact, it may be the standard expectation that the industry needs a pragmatic approach by Port State Control when it comes to enforcement.

Would this amount to a delay or is it simply reasonable?

Ship owners have privately warned of a complete loss in credibility for the IMO if it grants any kind of formal delays and, after the ballast water management convention fumble last year, that may not be an exaggeration.

This proposal puts the IMO in the very uncomfortable position of having to officially sanction something that many in the industry expect to happen under the radar in the first few months of the cap.