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An environmental rule hitting the maritime world at the turn of the New Year will open a steep divide in operating costs across shipping markets.
A large share of vessel operators have chosen to limit their sulfur emissions with exhaust systems called scrubbers that trap sulfur created by fuel-burning engines.
The systems cost several million dollars but will allow the operators to avoid buying new low-sulfur fuel that oil traders say will be some 30% more expensive than conventional bunker fuel. That will give ships with scrubbers a big cost savings that companies expect to use to get an edge in competition for international cargoes.
The gap is growing out of an antipollution mandate by the International Maritime Organization, the maritime regulating arm of the United Nations. Starting Jan. 1, some 60,000 oceangoing vessels must cut their sulfur emissions by more than 85%.
The approved methods are scrubber exhaust systems or burning cleaner fuels that have been developed as an alternative to the heavy-polluting bunker that has long powered commercial ships.
Shipping-industry executives expect the mandate to add some $50 billion in fuel costs over the next four years.
The fuel switch is the first step in a decadeslong plan that will eventually push the industry toward carbon-neutral vessels.
The International Energy Agency estimates that by 2025 there will be some 5,000 ships using scrubbers, covering about 30% of world-wide tonnage. Scrubbers typically last for up to five years, after which operators will move to use low-sulfur fuels.
A large share of vessel operators have chosen to limit their sulfur emissions with exhaust systems called scrubbers that trap sulfur created by fuel-burning engines.
The systems cost several million dollars but will allow the operators to avoid buying new low-sulfur fuel that oil traders say will be some 30% more expensive than conventional bunker fuel. That will give ships with scrubbers a big cost savings that companies expect to use to get an edge in competition for international cargoes.
The gap is growing out of an antipollution mandate by the International Maritime Organization, the maritime regulating arm of the United Nations. Starting Jan. 1, some 60,000 oceangoing vessels must cut their sulfur emissions by more than 85%.
The approved methods are scrubber exhaust systems or burning cleaner fuels that have been developed as an alternative to the heavy-polluting bunker that has long powered commercial ships.
Shipping-industry executives expect the mandate to add some $50 billion in fuel costs over the next four years.
The fuel switch is the first step in a decadeslong plan that will eventually push the industry toward carbon-neutral vessels.
The International Energy Agency estimates that by 2025 there will be some 5,000 ships using scrubbers, covering about 30% of world-wide tonnage. Scrubbers typically last for up to five years, after which operators will move to use low-sulfur fuels.
