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Perspectives

International Maritime Organization 2020 regulations

Strategies in an uncertain world

Effective January 2, 2020, the International Maritime Organization (IMO) 2020 regulation mandates ships to use fuel with less than 0.5 percent sulfur versus a maximum of the current 3.5 percent. The regulation was finalized in 2016, allowing plenty of time for IMO 2020, but the industry has adopted a wait-and-watch approach due to uncertainty in future compliance options, fuel availability, and quality. Explore our new report for short- and long-term strategies, as well as considerations for the shipping industry, to address these challenges.

The IMO 2020 regulation defined

IMO 2020, also known as Sulphur 2020 or MARPOL 2020, is a regulation officially confirmed by the International Maritime Organization in October 2016 with the aim of reducing harmful sulfur oxides (SOx) emissions by the maritime industry.

More than 60,000 shipping vessels are in operation today that fall into the IMO 2020 designation. Of these, only 3,000 so far have been retrofitted with a scrubber system to absorb SOx emissions.

With mandates in place by January 2, 2020, a growing question in the industry is, "What will be the level of compliance?" And a second, more important question, "What will be the correct adoption strategy in the shorter and longer terms, assuming there is a certain level of non-compliance?"

Keeping that in mind, this report aims to discuss the scale of the problem, challenges ahead, strategies that are pragmatic and achievable, and the longer-term options the shipping industry should consider.

Looking ahead to IMO 2020

Interested in discussing the IMO 2020 regulation further to better understand other key questions, such as:

  • What happens beyond 2020?
  • How do we strategize if IMO 2020 is worse?
  • How does the Liquified Natural Gas outlook play out with the current glut coming to an end?

Let’s talk.

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Explore our 2020 industry outlook

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Subhasis Ray
Manager

Deloitte MarketPoint LLC
+1 713 982 3715
 

Casper Ryborg
Partner

Deloitte Northwest Europe
+45 30 93 55 51

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