From January 1st, 2020, the new IMO (International Maritime Organization) 2020 Low Sulphur Regulation will be in effect. All sea-going vessels worldwide will have to comply and reduce their sulphur emissions by 85%.
This new regulation aims to reduce the environmental impact of the industry and significantly improve air quality, an initiative in which the CMA CGM Group has been involved for more than 15 years.
The International Maritime Organization (IMO) have promised that this deadline isn’t going to change.
CMA CGM will be fully compliant as of January 1st, 2020 and has decided:
- to favour the use of Very Low Sulphur Fuel Oil (with 0.5% Sulphur) for its fleet,
- and to invest significantly:
- by using Liquefied Natural Gas to power some of its future container ships (20 ships by 2022, including 9 vessels of 23,000-TEUs), notably resulting in a 99% reduction in sulphur oxides and fine particles emissions,
- by ordering several scrubbers for its ships.
What does it mean for the customers?
All these measures represent a major additional cost. So this cost will be taken into account through the application of fuel surcharges on a trade-by-trade basis.
- For short-term contracts (up to 3 months validity):
Low Sulphur Surcharge – IMO 2020 (LSS) as of December 1st, 2019. LSS will be calculated as follow: LSS IMO 2020 = (0.5% FUEL PRICE PER TON – OCT 2019 3.5% HIGH SULPHUR FUEL PRICE PER TON) X TRADE COEFFICIENT*For long-term contracts (more than 3 months validity): BAF Formula based on VLSFO 0.5% as of January 1st, 2020. It is calculated as follow:BAF = 0.5% FUEL PRICE PER TON X TRADE COEFFICIENT*
However, right now over 60,000 vessels worldwide need to make the necessary changes in order to comply.
Source: www.cma-cgm.com, man-es.com.
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