As part of the shipping industry’s continued efforts to decrease its environmental impact and reduce air pollution, the International Maritime Organization is preparing to roll out a landmark set of regulations to come into effect on January 1st 2020.

IMO Sulphur 2020 will cap the sulphur content in bunker fuel to 0.5% for all commercial shipping vessels (down from its current 3.5%), with a view to reduce overall sulphur oxide emissions from ships by 77%.

While ocean freight is one of the more sustainable shipping alternatives at the moment, the new regulations will further help prevent acid rain, tackling ocean acidification and reducing harm to agriculture, and benefit air quality globally with health benefits felt across coastal communities especially.

To meet the new regulations, marine vessels will either need to fit exhaust gas cleaning systems (known as scrubbers) or switch to more expensive low sulphur distillate fuels or low sulphur fuel oils.

Compliance is estimated to increase the cost of port-to-port moves by 10-20 percent or up to USD 200 per TEU, depending on the carrier, fuel cost locally and route.

Some carriers are implementing new rates from 1st November 2019, while others will introduce a new recovery fee from 1st December.

Capacity may also be impacted in the short-term and the new regulation will likely impact global freight rates and global fuel supply and demand.