TradeWinds: IMO 2020 Sulphur Emission Cuts Are Just the Start of the Challenge

12 August 2019

by Michael Tusiani

Over the past few years, the world’s shipping industry has been focused on the implementation of the IMO-mandated global reduction in sulphur content of fuel oils from 3.5% to 0.5% by next January.

Looming far larger, is the developing IMO mandate to lower carbon dioxide emissions by 2050 to 50% of 2008 levels.

Poseidon Principles

Adding further pressure is the adoption of the Poseidon Principles by many of the leading global banks, which will have a profound effect on the shipping industry, impacting vessel life, financing and potentially worldwide trade.

With no new developing technology that looks likely to replace the diesel engine, meeting the IMO’s 2050 greenhouse gas (GHG) emission target appears to be a long way off.

This is an acute issue for LNG carriers.

Any vessel built today with an expected trading life of 30 years or more may face compliance issues with the future GHG emission targets. As a result, today’s new LNG carriers could face premature obsolescence.

With no new developing technology that looks likely to replace the diesel engine, meeting the IMO’s 2050 greenhouse gas (GHG) emission target appears to be a long way off. This is an acute issue for LNG carriers.

Plus, the Poseidon Principles bind signatory banks to eliminate financing on vessels that do not comply with the IMO 2050 guidelines

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