Hapag-Llyod establishes Marine Fuel Recovery to achieve IMO emission regulation

As the International Maritime Organisation’s emissions regulation (IMO 2020) is coming into force on 1 January 2020, Hapag-Lloyd has declared its readiness to comply fully with the new regulation, said Rolf Habben Jansen, Chief Executive Officer, Hapag-Llyod.

Under the new regulation, sulphur cap for compliant fuel oil will be lowered from 3.5% to 0.5%. The new regulation will significantly improve the ecological footprint of the shipping industry, and the majority of all vessels are expected to be operated with low-sulphur fuel oil by then. Using low-sulphur fuel oil will be the key solution for the shipping industry. Furthermore, it is the most environmentally friendly solution in the short term.

At the same time, the utilisation of the compliant low-sulphur fuel oil comes along with an increase in fuel costs, which experts estimate to initially amount up to 60 billion US dollars annually for the entire shipping industry.

On the assumption that the spread between high-sulphur fuel oil (HSFO) and low-sulphur fuel oil (LSFO 0.5%) will be 250 US dollars per tonne by 2020, Hapag-Lloyd estimates its additional costs being around 1 billion US dollars in the first years.

The German shipping company has developed a Marine Fuel Recovery mechanism, which will be gradually implemented from 1 January 2019 and replace all existing fuel-related charges.

According to Rolf Habben Jansen, “We embrace the level playing field and environmental improvements resulting from a stricter regulation, but it is obvious that this is not for free and will create additional costs. This will be mainly reflected in the fuel bills for low-sulphur fuel oil, as there is no realistic alternative for the industry remaining compliant by 2020. With our MFR, we have developed a system for our customers that we think is fair, as it allows for a causal, transparent an easy-to-understand calculation of fuel costs.”

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