Compliance with new standards : lower sulfur content from 1st January 2015

To comply with new regulations set by the International Maritime Organization (IMO), carriers will be required to use upgraded marine fuel with a 0.5% sulfur maximum limit by 2020 (possibly 2025).

This implies the annual investment of billions of dollars and a series of changes to be phased in over the years and across the different oceans.

A new step consists in switching from the current 1% sulfur content to the 0.1% target in a number of emission control areas (ECA).

The ECA include the coastal waters of North America, the English Channel, the North Sea and the Baltic Sea in Northern Europe.

From January 2015, all shipping lines crossing these areas will be required to use fuel with a maximum 0.1% sulfur content.



To comply with the new requirement, carriers will be obliged to buy a more refined type of fuel which is 40-50% more expensive.

As fuel or bunker charges represent the major operating costs of container vessels, the carriers have announced that they will apply low sulfur surcharges (LSS or LSF) from Jan. 1, 2015  for all vessels passing through emission control areas (ECA).

It is difficult to estimate precisely the financial impact this will have on shipments. The increase will vary according to the trade lanes, routes, vessels, used etc.

Each carrier will set their own level for this surcharge. However the amount might be about $50-$100 per TEU from North Europe to the U.S. East Coast.

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