Shipping industry’s new emissions rules means cost of cleaner fuel soars – The National

Shipping industry’s new emissions rules means cost of cleaner fuel soars – The National

Rates for older bulk vessels that can only run on high-sulphur fuel barely cover costs. Two weeks ago, the vast majority of the world's ships were forced to change the fuel they use.. But the cost of the new fuel has skyrocketed to the point where it recently surpassed diesel and gasoline in Singapore, Asia's oil-trading hub.. "The cost of world trade is rising when the bunker costs go up," said Peter Sand, chief shipping analyst at BIMCO, a trade group for many of the world's vessel operators.. IMO 2020, as the rule is known, is a global sulphur cap on marine fuel of 0.5 per cent, down from 3.5 per cent in most parts of the world.. The price surge points to significant support for those refineries that make the new product.. The equipment allows their vessels to keep using the old fuel without breaking the rules.. Those who invested appear to be gleaning a competitive advantage because the discount for the old fuel is so big.. If the current market doesn't improve, those lower earnings might eventually discourage some ship operators from transporting cargoes, something that would help the owners of vessels that do have scrubbers.. Mr Sand,