BUSAN, Nov. 24 (Korea Bizwire) – The date when new environmental regulations mandated by the International Maritime Organization take effect is rapidly approaching. Starting January 1, 2020, all ships must use fuel with a maximum sulphur content of 0.5 percent, a 3-percent cut from the current cap of 3.5 percent.
The IMO also made it mandatory for ships (5,000-ton or more) using international routes to record and report their annual fuel data to their respective government bodies, including fuel type, consumption, and mileage.
The IMO’s reinforcement of its regulations is expected to have a significant effect, increasing fuel expenses as well as shipbuilding costs, with a ship’s fuel efficiency expected to play a greater role in determining shipping companies’ profit margin.
With impending deadlines at hand, the Korea Maritime Institute said Wednesday that there’s an urgent need for Korea to inspect its vessels’ fuel efficiency and prepare with countermeasures.
According to the KMI’s recent investigation of 890 Korean vessels operating on international routes, 28 percent, or 248 ships, were found to be operating at undesirably low levels of fuel efficiency, including 40 container ships, 116 bulk carriers, and 52 oil tankers.
The KMI recommended that these ships, which will no longer have a competitive edge, be decommissioned quickly and replaced with high-efficiency, environmentally-friendly vessels.
It also suggested that the government should expand Korea’s construction of bulk carriers, which are in high demand by local shipping companies, going against recently announced government measures related to the shipping and shipbuilding industries that would shrink the local construction of bulk carriers.
In order to persuade ship owners to decommission their vessels, KMI officials suggested providing subsidies that will give companies the financial capacity to place new ship orders, the same policy that the Chinese government began in 2013, to the great benefit of China’s shipping company COSCO, which received roughly $770 million in both 2014 and 2015.
The KMI further added that among world’s ten leading maritime countries, the average life expectancy of Korean ships increased from 12.6 years to 13.8 years over the past 20 years, while the other nine countries saw a decrease from 15.1 years to 12.1 years, indicating that Korea has had poor investment in new vessels.
By Kevin Lee (firstname.lastname@example.org)