An IMO Crackdown

By: Ryan Wolfe / January 13, 2020

January 1, 2020, marked a big change for marine vessels.  The IMO (International Maritime Organization) has implemented a significant reduction in the sulfur content for the shipping industry in 2020.  The reduction brings the previous 3.5% sulfur content (bunker fuel), plummeting down to the new 0.5% sulfur requirement.   Goldman Sachs estimates the monetary impact could be as much as $240 billion during the 2020 calendar year.


Over 90% of the global trade takes place via ocean travel.  Oil tankers, general cargo, and bulk cargo are the 3 largest participants for ocean travel.  These vessels combine to consume approximately 3.5 million barrels daily, which is just 7% of the daily global consumption.  Although the daily percentage may not seem to be that much, that 7% bunker fuel burning accounts for 90% of the entire globes sulfur emissions.  Two of the most common repercussions from high sulfur levels are, respiratory illness and acid rain, which will inevitably lead to crop failure.

The current options for the freight vessels to adapt to the sulfur emission standards are:

  • Add sulfur scrubbers to the exhaust system of the vessels to trap sulfur exhaust gasses.
  • Switch to the more expensive, lower sulfur fuel.
  • Reengineer current and future vessels to accept LNG (Liquified Natural Gas).

Currently there are only 1% of ships that have added the sulfur scrubbing technology to their exhaust systems.  The problem with the sulfur scrubbers is that they do not eliminate the sulfur content from the emissions, they simply discharge the excess sulfur emission into the ocean waters.

Recently in Chinese waters, there have been two ships tagged for not following the new IMO 2020 regulations.  The sulfur content test resulted in 0.6777%.   The indication from this test would seem to show that the current 0.5% sulfur fuel was mixed with the previous 3.5% sulfur fuel.  The previous 3.5% sulfur fuel may not have been fully drained prior to the new IMO regulations becoming active.  It is currently unclear what the repercussions of the higher sulfur content will be at this point.


Categories: IMO, freight, Bunker Fuel, LNG, sulfur, International Production, regulations, 2020, Vessel, Bulk, cargo, ocean, fuel regulations, international fuel, international, costs, repercussions, shipping, scrubber, exhaust

Ryan Wolfe

Written by

Ryan Wolfe

I am a proud Guttman Energy sales representative, who has a thirst of knowledge for the industry. I come from a strict, service based, industry that allows me to put my customer needs first. I look forward to utilizing my passion and past experience to help bolster my client’s operations. I take a personal pride in anything I do.

Guttman Energy Daily Market Update Disclaimer – The information contained in this market update is derived from sources believed to be reliable; however this update could include technical inaccuracies or typographical errors and Guttman Energy does not guarantee the accuracy, completeness or reliability of this update. FURTHERMORE, THIS UPDATE IS PROVIDED "AS IS," WHERE IS, WITH ALL FAULTS AND WITHOUT ANY WARRANTY OR CONDITION OF ANY KIND, EXPRESS, IMPLIED OR STATUTORY. GUTTMAN ENERGY ALSO SPECIFICALLY DISCLAIMS ALL EXPRESS AND IMPLIED WARRANTIES. YOU USE THIS UPDATE AT YOUR SOLE RISK. This update and any view or comment expressed herein are provided for informational purposes only and should not be interpreted in any way as recommendation or inducement to buy or sell products, commodity futures or options contracts.


Subscribe to our blog

Price Feed

Stay up-to-date on current fuel prices and market trends with our NYMEX price feed (15 minute delay to the live market).

© 2018 Market data provided and hosted by Barchart Market Data Solutions. Fundamental company data provided by Morningstar and Zacks Investment Research. Information is provided 'as-is' and solely for informational purposes, not for trading purposes or advice, and is delayed. To see all exchange delays and terms of use please see disclaimer.


Contact Us