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Global Shipping Fleet Braces for Fuel Shock

Lower-emissions rule will strain fuel supply and trigger retrofit expense.

By Firat Kayakiran, Bloomberg | Updated on April 05, 2017

Little more than 2 1/2 years from now, the global fleet of merchant ships has to reduce drastically how much sulfur ships’ engines belch into the atmosphere. While that will do good things — like diminishing the threat of acid rain and helping asthma sufferers — there’s a $60 billion sting in the tail.

That’s how much more seaborne vessels may be forced to spend each year on higher-quality fuel to comply with new emission rules that start in 2020, consultant Wood Mackenzie Ltd. estimates. For an industry that hauls everything from oil to steel to coal, higher operating costs will compound the financial strain on cash-strapped ship owners, whose vessels earn an average of 70% less than they did just before the 2008-09 recession.

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