In 2016, the IMO announced that the effective date for the reduction of marine fuel sulphur (“S”) will be 2020. Under the new global cap, ships will have to use marine fuels with a sulphur content of no more than 0.5% against the current limit of 3.5%S in an effort to reduce greenhouse gas emissions. The Emission Control Areas (ECAs) will remain at the 2015 standard of 0.1%S content.
Sulphur-free LNG fuel:
Shipowners will soon need to decide if they want to continue using high sulphur fuel oil, in conjunction with scrubbers or exhaust gas cleaning systems; or switch to low sulphur fuel options, including distillates; or virtually sulphur-free LNG fuel.
The transition to 0.5%S will cause more changes to global marine industry than the switch to the 0.1%S fuel in the ECAs. The impact of this transition represents approximately 75% of global marine fuel demand when compared to the demand of ECA.
Improved logistics segregation:
In total, 3 million barrels per day (mbd) of High Sulphur Fuel Oil (HSFO) bunkers will need to switch to 0.5%S fuel through blending with gas oil, plus improved logistics segregation.
Higher production costs and increased use of gasoil in the 0.5%S blend will most certainly drive up the fuel cost. At the same time, a lack of demand for HSFO will temporarily drive down its price potentially making it uneconomical for it to be produced while new stricter regulations will through time force it out of existence for marine use.
Utilizing LNG to fuel cargo ships, FORWARD brings a major environmental impact with substantial economic savings.
The vessels of Forward will comply with and exceed all known, applicable, and forthcoming environmental regulations; these include International Maritime Organization’s (“IMO”) 2016 NOx Tier III rules, IMO’s global Marpol Annex VI 0.5% sulphur (SOx) cap effective on January 1st, 2020, and the most stringent 2025 Energy Efficiency Design Index standards and emission levels which Forward will exceed.
Between now and 2020, the global LNG production is expected to rise by 50% with the US alone accounting for a massive 550% increase in its own exporting capacity. The increased availability of LNG is expected to have an impact on its already competitive price.
LNG requires neither scrubbers nor catalytic converters (“SCR”). The result is also a lower, more economical electrical balance.
Forward’s vessels have been designed to run for 40 days or to cover 14,000 nautical miles on LNG only. With their dual-fuel capacity this range is doubled.
Forward, with its unprecedented environmental footprint and its impressive dollar fuel efficiency, will create a new benchmark for the industry.
Forward’s solutions, proprietary concepts and designs including the patent-pending machinery arrangement, are equally applicable to tankers and container ships.
Project Forward is led by Arista Shipping S.A. and other industry leaders, namely:
- American Bureau of Shipping (“ABS”), classification society,
- Wärtsilä, the engine supplier,
- GTT, the LNG tank supplier,
- Deltamarin, ship designer;
- Royal Dutch Shell plc, recently linked with Project Forward to assist in the global distribution of LNG.
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Source: Alexander Panagopulos, Shipowner / Entrepreneur