IMO 2020 is Coming to Town Part 1: Will spiking cost of fuel cause you pain?

This is an excerpt of the original article. It was written for the November 2019 edition of Supply Chain Management Review. The full article is available to current subscribers.

November 2019

We hear a lot about emerging technologies like artificial intelligence, machine learning and robotics. We hear less about one of the enabling technologies that makes the others possible:

Browse this issue archive.

Already a subscriber? Access full edition now.

Need Help?

Contact customer service

847-559-7581   More options

Not a subscriber? Start your magazine subscription.

Editors Note: This is Part I of a two-part series by Brooks Bentz on the impact of new fuel regulations affecting shipping that take effect on January 2020. Part II will run in the December 2019 issue of Supply Chain Management Review.

The noxious emissions, largely sulfur oxides, as well as nitrous oxides and particulate matter, have become a major environmental concern and have been proven to adversely affect global health as they’re discharged into the atmosphere. According to a Goldman-Sachs study, burning standard bunker fuel (Heavy Fuel Oil or HFO) accounts for almost 90% of sulfur emissions globally, with the largest 15 vessels producing more sulfur than the combined total of all the world’s automobiles.

The International Maritime Organization (IMO) Marpol Annex VI (“Prevention of Air Pollution from Ships”) regulations limiting sulfur content of bunker fuel to 0.5% (down from 3.5%) will take effect on January 1, 2020. A small portion of the 51,000 ships in the global fleet already burn compliant fuel, but the remainder will have only three viable options, and one temporary “hall pass” to comply with the law:

SC
MR