Shippers are making progress with preparations for the upcoming 2020 sulphur cap, despite predictions of doom and gloom, according to The Wall Street Journal.
While shipping industry leaders have predicted that the sulphur cap could cost the industry up to $50 billion, and some have looked to delay its implementation, a consensus is forming on how to distribute costs and providers of the new 0.5% sulphur fuel are busy setting up depots and distribution sites.
Much of the extra cost will be passed on to customers, with shipping companies arguing that they could go bankrupt if attempting to take the hit themselves. In the short term, they are expecting to pay up to 40% more for low-sulphur fuel than for bunker because of the higher setup and production costs.
As such, freight rates and surcharges are likely to increase significantly, though customers will demand transparency over how and when these higher rates are applied.
According to health experts, the new sulphur cap could prevent around 150,000 premature deaths a year due to global air pollution, as well as 7.6 million cases of childhood asthma.
Source: The Wall Street Journal