JEDDAH/DUBAI – The International Maritime Organization (IMO) will enforce a new 0.5% global sulfur cap on fuel content from 1 January 2020, lowering from the present 3.5% limit. The global fuel sulfur cap is part of the IMO's response to heightening environmental concerns, contributed in part by harmful emissions from ships.

IMO is an agency of the United Nations which has been formed to promote maritime safety. IMO ship pollution rules are contained in the “International Convention on the Prevention of Pollution from Ships”, known as MARPOL 73/78.

In this regard, Fichte & Co Legal, one of the UAE’s leading law firms, recently held an informative seminar at the JW Marriott Marquis, Business Bay in Dubai, UAE. The session tackled the IMO 2020 mandate and its impact on the world’s leading ports, being Singapore, and the UAE’s Fujairah Port, respectively. With the rapidly approaching regulatory change forcing ship-owners to comply one way or the other, the global marine fleet is set to experience great change in the coming six months.

Fichte & Co’s event featured knowledgeable maritime experts and government officials providing industry insights on how Singapore and the UAE can continue to thrive through this impending change. Jasmine Fichte, Legal Founder and Managing Partner of Fichte & Co, said “The UAE has already established itself as a nation that prioritizes reinforcing a greener footprint and a more sustainable future. The implementation of the UAE 2021 vision, which entails a full pledged sustainable structure for the country’s future, accordingly aligns with the IMO2020 sulfur cap.”

Fichte added: “UAE stakeholders dealing with HSFO (high sulfur fuel oil) should seek out a more sustainable plan to secure their position in the industry before the mandate is initiated and the seminar will enable forward-thinking to proactively plan for this. Alternative methods of vessel power generation and more innovation in wider industrial uses of fuel oil are required for the UAE as part of a secured plan for maritime to continue thriving in the both regionally and globally.” The seminar enabled UAE stakeholders and decision makers to receive strategic methods to tackle the IMO2020 mandate to their best benefit.

Addressing the importance of compliance,. Hessa Al Malik, Executive Director of Maritime Transport Sector at the Federal Transport Authority - Land and Maritime (FTA), emphasized “IMO 2020 will soon be in full effect, with a significant reduction in maximum sulFur content of marine fuel allowed. As a more stringent standard becomes the norm with the sulfur cap shifting from 3.5% to 0. 5% on January 1, 2020, ship-owners and marine vessel operators must be adequately prepared now to avoid any last minute hassles. With less than six months remaining, this timely seminar is a strong reminder, among other initiative done by the UAE, to prepare ship owner to take the necessary measures for the industry now, rather than later.”

She further added “While many may be fretting the mandate, it should BE embraced as it will preserve the region’s natural resources, continue meeting a growing demand, and foster a greater environment for all. Once the regulation is activated, ship-owners can either use IMO2020 compliant marine fuel with a maximum sulfur content of 0.5%, use alternative acceptable marine fuels like LNG, or seek alternative methods like installing of scrubbers to remove sulfur dioxide and dirtier particulates from their bunker fuel. Accordingly, The UAE has already started taking considerable measures for IMO 2020, the Port of Fujairah, which is the largest bunkering port in the Middle East, has banned the discharge of waste water with sulFur from engine exhaust gases.”

Commenting on the regional sulfur forecast, Pawan Sahni, Middle East Business Development Manager for DNV GL – Maritime said, “According to a study by Stillwater, alternative marine fuels, like LNG, will constitute for a very small percentage of vessel fuels by 2020. As a result, the IMO2020 mandate will cause a dramatic demand shift for marine fuels used globally and a larger percentage of the shipping industry will switch to compliant 0.5% sulfur fuel. There will also be an increasing global demand for distillate fuels, like diesel and gas oil, as owners may prefer taking that route instead of opting for compliant fuel.”

Though the IMO has done its part to ensure awareness of the imminent sulfur cap, the question of whether ship owners have taken the necessary steps to appropriately prepare for it remains to be seen. K Murali Pany, Managing Partner at Joseph Tan Jude Benny LLP, Singapore, said “I do not think the maritime industry has adequately prepared for the IMO2020 sulfur cap to kick into force. Many owners or charterers have not fully considered the impact or implications, or have adopted a ‘wait-and-see’ attitude to the regulations. Variables like compliant fuel availability, quality and the cost of such fuel, seem to be factors which the market wants to consider before taking any definitive steps.”

Pany further added that “with the global sulfur cap regulations imposing a definitive set of obligations on ship owners, the Singapore MPA has published guidelines which are quite comprehensive and give ship owners an idea of how Singapore will go about approaching and enforcing these regulations. My advice to all ship owners, regardless of location, is to take necessary steps to prepare. If you have a choice between doing nothing and hoping for the best, or doing something and preparing for the worst, it should always be the latter. By conducting due diligence and putting the appropriate protocols in place, you’ll be prepared for the worst. If the worst doesn’t happen, your processes will still be better than before.”

The seminar was successfully attended by both private and government representatives including Abdulla Al-Mestrih, Acting Head of the International Cooperation Department at the Federal Transport Authority for Maritime and Land (FTA). The speakers shared their insights on how to continue to grow and prosper in the maritime sector in both Singapore and the UAE despite the imminent change of the IMO2020. During his speech, Al-Mestrih elaborated on FTA’s role as it plays an essential part in spreading the necessary awareness about the significance of compliance with international maritime laws. He also emphasized the importance of providing ship owners and engine manufacturers with the significant requirements on how to prepare for the implementation of IMO 2020 regulations by taking all the considerable measures. — SG