Economic and Legal Impact of 2020 Sulphur Limit Under Annex VI, MARPOL

Effective from 1 January 2020, the International Maritime Organisation (IMO) has brought down the permissible sulphur emission from vessels to 0.50% m/m from the earlier set 3.5% m/m Sulphur emission limit. The maritime stakeholders stepping away from Heavy Sulphur Fuel Oil (HSFO) and looking towards Very Low Sulphur Fuel Oil, Liquefied Natural Gas, Marine Gas Oil, (VLSFO, LNG, MGO), for compliance or use of Exhaust Gas Cleaning Systems (EGCS) with HSFO. These modes of compliance however are not completely failsafe as they present economical and regulatory challenges. The article presents a study of IMO and Marine Environment Protection Committee (MEPC) regulations, guidance, and guidelines for the implementation of low Sulphur limit. The nations member to International Convention for the Prevention of Pollution from Ships (MARPOL) are subject to new Sulphur limit and they have devices their own set of policies for compliance causing a lack of uniformity. MARPOL has left the decision of sanctions on the Member State thus the set standards also vary and there exist certain nations with sanction policies in case of violation. The research has addressed the national policies of major maritime contributing nations having varied geographical proximity. Greece, UK, Panama, USA, Australia, China, India, and Nigeria are considered for the study. The study has shown that open-loop EGCS have been prohibited in various nations due to environmental concerns. Further, many states have not formed sanction policies reflecting the allocation of responsibility in case of non-compliance consequently have established a threat of criminal action against the captain and the crew of the ship. The article concludes that the IMO can issue reservations for national implementation or formulate modal law for national policy-making so that uniformity is achieved. Furthermore, the economic challenges prevalent have occurred due to the high cost of alternative fuel and installation of EGCS which has consequently impacted the opting of compliance mechanism by the shipping industry. The newly built ships preinstalled with EGCS are preferred. The study has suggested that for old vessels EGCS might be the adequate option as the cost of fuel is expected to increase in the post COVID-19 era. IMO Sulphur Regulation, Shipowner, Charterer, EGCS, Low Sulphur Fuel