The chief executive of one of the world’s largest container shipping companies, Japan’s Mitsui OSK Lines, has reportedly said new environmental rules for marine fuels could cost the shipping industry US$50 billion.
Junichiro Ikeda told the Financial Times the regulations could drive many operators out of business if the industry is unable to pass on the cost.
To curb emissions from ships, the UN International Maritime Organisation has decided to cap sulfur content in marine fuel oil, cutting the limit from 3.5% to 0.5% in 2020, the article reported.
Ship owners reportedly will either have to switch to more expensive, higher-quality marine fuel, invest in emissions-cleaning systems referred to as “scrubbers” or use alternative fuels such as liquefied natural gas.
Jack Jordan, an editor at information service S&P Global Platts, was quoted as saying that ship owners were having to choose a strategy “with next-to-zero concrete information available, and the ones that make the wrong choice could be driven out of business in the early 2020s”.
In 2016, the Organisation for Economic Co-operation and Development (OECD) predicted the cost of the cap for container shipping would be US$5-30 billion, while last year consultancy Wood Mackenzie said it could be up to US$60 billion.
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