He’s making a list; he’s checking it twice; gonna find out who’s naughty or nice. The International Maritime Organization (IMO) is coming to town.
Yes, with just one month left to go, shipping companies will finally have to comply with the new emission regulations coming into force on 1 January 2020, limiting allowable sulfur emissions from ships to a maximum of just 0.5%.
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This could hardly be better news for the LNG industry (despite the fact these new regulations won’t arrive in time for Christmas Day). With ship owners and operators forced to look to cleaner alternatives, LNG undoubtedly provides the easiest and most feasible solution, with bunkering infrastructure and fuel availability constantly increasing.
For instance, in the last two months alone, Total has launched its first large LNG bunker vessel; the government of British Columbia (B.C.), Canada, has lent its support for a proposal for an LNG ship refuelling facility; and PETRONAS has signed a time charter party for a newbuild LNG bunker vessel.
Nevertheless, the transition to widespread use of LNG as a marine fuel is not likely to be smooth. As Norton Rose Fulbright says on its website: “There is a somewhat inconsistent approach to the implementation of IMO 2020 and varying degrees of readiness among port and flag states. If this is not adequately, and urgently addressed, this will result in confusion and delays when IMO 2020 comes into force.”1
Whether or not ports or flag states are ready, however, will not stop these new regulations coming into play, and the effects will certainly be considerable.
In the festive spirit, therefore, it is up to shipping companies, technology providers, fuel providers, governments, ports and flag states to work together in order to ensure there are no major hiccups once IMO 2020 is introduced.
Luckily, coalitions such as SEA\LNG are already in existence, seeking to accelerate the widespread adoption of our favoured cryogenic fuel in the maritime industry.
In their article starting on page 12, Nick Prowse and Penny Cygan-Jones of Norton Rose Fulbright will provide a more general outlook for the LNG industry in 2020. After all, IMO 2020 will not be the only major story of the year, as exports ramp up in the US, and demand rises for both industrial and domestic usage in the Far East, for instance.
Before the next milestone year lands upon us, let’s take a moment to look back on the progress the LNG market has made in 2019. Australia and Qatar continued their battle for top exporter status, and a number of positive final investment decision (FIDs) have been taken on projects worldwide. Whilst 2020 will be sure to bring fresh challenges, it is important to recognise the progress that has already been made.
We hope you enjoy this latest issue of LNG Industry magazine, and get some well-deserved rest over the holiday period. We’ll need it for 2020.
- ‘IMO 2020: Are we ready?’, Norton Rose Fulbright, (October 2019), https://www.nortonrosefulbright.com/en/knowledge/publications/5c72cf58/enforcing-imo-2020-are-we-ready