THE IMPACT OF IMO 2020 ON THE SHIPPING INDUSTRY
The preservation of the earth should be a collective effort
from all and Sundry, after all,’’the Earth is what we all have in common’’, as
said by Wendell Berry. Environmental pollution poses a great danger to our
atmosphere and there’s great need to checkmate the major sources, especially
sulphur dioxide pollutant, which forms the scope of this article.
Sulphur dioxide is of great concern because it has a
major presence in the air. It is
invisible and has a nasty, pungent and irritating smell. It easily reacts with
other substances to form harmful compounds such as sulpuric acid, sulphurous
acid and sulphate particles. Sulphuric acid must be particularly noted here
because it is the main compound of acid rain, and acid rain has been known to
cause deforestation and other environmental problems.
About 99% of sulphur dioxide emissions are produced by Industrial
activities such as the generation of electricity from coal, oil or gas, the
burning of fossil fuels, the extraction of metal from ore and from vehicles
such as cars, ships or locomotives that burn fuel.
Sulphur dioxide is so toxic that it takes as little as
10 minutes for one to feel its symptoms after breathing it. It is so dangerous
that short-term exposure can cause problems to the respiratory system such as
breathing difficulties, irritation of the nose and throat, coughing, wheezing
and shortness of breath. This is even more evident in children and the elderly-whom
are more susceptible to develop diseases from this exposure.
Long term exposure to the particles can seriously damage
one’s lungs since particulate matter can penetrate deeply into our organisms.
Events from sulphur oxides may reduce the visibility in open spaces and can
cause haze. The availability of these particles in the atmosphere are a danger
that needs to be curtailed by relevant authorities.
The dangers of having sulphur emission in the atmosphere
is the major reason the international maritime organization (IMO) ruled that
from the 1st of January, 2020, the marine sector emission in
international waters would be slashed-by over 80% by switching to lower sulphur
fuels. Currently, the maximum fuel oil sulphur limit is 3.5 weight percent
(wt%) and the new limit, which will take effect from January, 2020 is 0.5 wt%. This
is generally known as IMO 2020.
This move by the IMO will be the largest reduction in
the sulphur content of transportation undertaken at any one time. The reason
for this big leap is because the marine sector, which consumes 3.8 million
barrels per day of fuel from 2017 statistics, is responsible for half of global
fuel oil demand. Therefore, this new regulation, when implemented, will impact
negatively to the pricing and availability of compliant fuels.
The impact is beginning to be felt from the second half
of 2019 as the refining and shipping sectors adapt. Notably, the growing demand
for middle distillates may head to an upward price pressure on fuels such as
jet fuels. This in turn could lead to an increase in the cost of air travel.
There are a number of key issues to watch in the
regulation. The ability of nationals to monitor adoption and their appetite to
enforce this regulation. When this kicks off, the regulation will be enforced
by country’s authorities at the seaports and the imminent challenge of providing the
equipment to test the quality of marine fuel and besides, not all countries
ratified this IMO regulation into their national regulation.
The impact of this IMO 2020 will also affect the
refining sector. From my analysis, the refiners will absorb the displaced high
sulphur fuel oil volume as feedstock and will then supply the necessary
distillate. Definitely, prices will change rewarding those ship owners that
have invested in scrubbers.
The refiners will do better in their financials and some
may even see their income double over the period. The refiners that can make
use of this legislative change will see their earning skyrocket in 2020.
Nigeria, through its maritime leadership headed by the Former Director General, Peterside Dakuku, who
also signed this legislation, has vowed to enforce strict compliance with the
IMO regulation.
Speaking after the ratification in a meeting in Dubai, Dakuku said, “The 2020 fuel challenge
is general towards energy efficiency, environmental pollution control, and
health as well as core regulatory enforcement issues. As a maritime nation, we
cannot afford not to comply with the IMO Standard, which also does a lot in
mitigating global warming and other related environmental issues.”
Speaking further, the DG said that “massive
enlightenment, stakeholders engagement and liaison as well as collaboration
with fuel refiners and suppliers is needed”.
All stakeholders in this fight against sulphur emission
must know that progress is impossible without change, and those who cannot
change their minds cannot change anything. This calls for conceited efforts
from everyone to make our world a better place to live in.
I will conclude with the words of John Paul II, who said
concerning our environment that, “the earth will not continue to offer its
harvest, except with faithful stewardship. We cannot say we love the land and
then take steps to destroy it for use by future generations.”
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