2018-10-22 09:38

OOCL Fleet Moves Forward to Meet IMO 2020 Regulation

Over the years, the industry has seen an increasing amount of attention given to the environmental impact from the global supply chain, resulting in regulations on emissions control and environmental protection becoming more stringent and widespread across the world. May it be in the form of introducing or expanding Emissions Control Areas (ECA) on the regional level, meeting slow steaming requirements during sensitive seasons to avoid whale strikes at the local level, or investing in more efficient ships with the latest environment friendly features to meet emissions reduction targets, we have all been doing our part to contribute to the protection of our environment.

OOCL has consistently outperformed many international requirements and industry standards by proactively taking on a leadership role in implementing many important initiatives to address global environmental challenges. 

They include green investment on our assets, development of green IT solutions, better Greenhouse Gas management, and participation in global environmental initiatives, contributing to the success and development of our environmental sustainability profile. Moving forward, the industry will be stepping into an important chapter in its history by ensuring all ocean-going vessels in our fleets will be able to meet the International Maritime Organization’s (IMO) new Sulphur cap regulation by January 2020.  With this new Sulphur cap on marine fuel lowering from 3.5% to 0.5%, approximately 85% of Sulphur emissions is expected to be reduced but at a significant cost to the entire industry, estimated at about US$60 billion each year.

Currently, the industry has been grappling with the challenges associated to fleet adjustment options, including uncertainties in the availability and accessibility of the 0.5% Low Sulphur Fuel (LSF) in the market and the premium that will be charged for the cleaner fuel.  As we explore our options and what would be best for our fleet to ensure compliance by the deadline, OOCL will begin our transition into the use of LSF for our entire fleet during the second half of 2019.

By looking into the expected bunker consumption of our fleet and the projected price difference from switching to the compliant fuel which may possibly become increasingly expensive due to tight supply in the market, we expect the additional cost impact to easily fall well above half a billion dollars.  Under the current industry environment and the level of cost involved to an industry that is already very cost-sensitive for survival, shippers and the consumers will need to prepare to shoulder this burden. 

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