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Shippers call for clarification on sulphur

October 24 - The Global Shippers' Forum (GSF) is calling for more information regarding the impact of low sulphur fuel, ahead of the implementation of the emission control areas (ECAs) from January 1, 2015.

From January, new legal requirements will come into force in North Europe and North America which will lower the maximum allowed content of sulphur in fuel burned in the ECAs, to 0.1 percent from the current 1 percent.

GSF secretary general, Chris Welsh, commented: "With one or two notable exceptions, few shipping lines have yet provided information to their customers on their low sulphur fuel strategies and the extra cost to be passed on to shippers via increased rates or bunker surcharges.  With shippers under pressure to finalise freight budgets for 2015, this information is urgently required by customers."

The GSF says that it recognises that the implementation of the new low sulphur fuel limits represents a challenge to the shipping industry.

There is a range of options open to carriers: use of marine oil gas, which meets the 0.15 sulphur content; use of alternative fuels such as LNG and methanol; and the use of abatement technology such as scrubbers to dilute exhaust gas sulphur emissions to the 0.1 percent limit.

"The fact that there is a range of options for the managing of the new low sulphur fuel limits means that the impact on costs will be very different from one shipping line to another," warns Welsh.

As the requirements are limited to specific geographical areas, and as there are various management options, shippers will require greater transparency from carriers in order to substantiate extra freight charges and bunker surcharges levied by shipping lines to recover additional costs, says the GSF.

The shippers' forum has developed a series of questions for shippers to use in their negotiations with carriers based on the approach by individual carriers in meeting the 0.1 percent lower sulphur limit.

HLPFI reported on October 23 that BBC Chartering plans to introduce a low sulphur surcharge from January.  The carrier said that is was in the process of evaluating the specific cost impact, and believes that a separate charge will provide better transparency to its customers on the additional costs arising from the new environmental requirements.

www.globalshippersforum.com

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