IMO 2020

The International Maritime Organisation (IMO), the United Nations' body responsible for the safety and environmental performance of the shipping sector, has ruled that from 1 January 2020, marine sector emissions in international waters be slashed.

To comply, the marine sector will have to reduce the sulphur emissions by over 80%, which can be achieved by switching to lower sulphur fuels. The current maximum fuel oil sulphur limit of 3.50 weight per cent (wt%) is to be reduced to 0.50wt%.

The marine sector, which consumed 3.8 million barrels per day (b/d) of fuel oil in 2017, is responsible for half of global fuel oil demand. Most of this fuel oil has a sulphur content of between 1.00wt% and 3.50wt%, making it a high-sulphur fuel.

Impacts to transport costs arise from the following:

• Refiners will need to invest to upgrade High Sulphur Fuel Oil (HSFO) production to either a 0.50wt% sulphur fuel oil (termed VLSFO, very low sulphur fuel oil), or distillate.
• Producers could be impacted by changing crude differentials, with discounts for medium and heavy/sour crudes (to Brent) widening significantly.
• Maritime sector can comply by:
• Buying VLSFO, if available;
• Switching propulsion systems to other fuels, such as liquefied natural gas (LNG), which is an option for new-build vessels;
• Installing exhaust gas cleaning facilities (termed "scrubbers"), which enable the shipper to continue to burn cheaper HSFO by washing the exhaust gases to reduce the SOx emissions.

In this event, we will cover the impacts concerning marine fuel and the ripple-on effects across industry, supply chains and logistics costs as users of petroleum products may be exposed to price volatility or shortages of supply. The event will also inform all business sectors within BritCham about the ramifications of IMO2020.

We would to extend our special thanks to our Breakfast Club Series Partner, The Fry Group​, for their support with our event.

Buffet breakfast will be provided.