Pakistani shipping line is in danger as IMO set Jan 1,2020 deadline
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Almost 100 countries haven’t signed up the IMO agreement yet. These include Argentina, Colombia, Ecuador, Israel, Iraq, Mexico, Pakistan, and Egypt.
KARACHI: International Maritime Organization (IMO), the regulatory authority for International shipping, has set a deadline for shipping lines of January 1, 2020 for reduction of sulfur-dioxide and nitrous-oxide pollution from fuel oil.
The new IMO rule is poised to ban shipping vessels using fuel with a sulphur content higher than 0.5 per cent. At present, the upper limit on sulphur oxides is 3.5 per cent, unless the ships are equipped with exhaust-cleaning systems known as scrubbers, down from 3.5pc.
The Treasure Magazine on November 13 2019 has informed its readers regarding this drastic change. According to the magazine the ships would require a fuel product to meet the more stringent rules. It also means; ships found in violation of the new law risk being impounded as ports are expected to police visiting vessels.
Pakistani refineries and concerned ministry stand aloof in this matter. According to rough estimates, 25 per cent of NRL production contains Sulphur content.
Given this situation, the Companies like Attock and Pakistan Refinery are duty bound to apprise their shareholders about the situation and clarify over the anticipated losses.
Majority of the nations and most of the refineries across the globe have spent millions of dollars and have upgraded their plants and equipment with a view to avert the anticipated losses and have complied with IMO-directive.
How the rules would be implemented is yet to be sorted out. The protocol is still to be established. One candid example is the UAE, with Fujairah port acting as a hub for regional shipping. Reports are now saying that though, the UAE has ratified the IMO 2020 rules, it may not rush to punish non-compliant ships when new rules will be effective from Jan 1.
Some others also need to play catch up. Almost 100 haven’t signed up the IMO agreement yet. These include Argentina, Colombia, Ecuador, Israel, Iraq, Mexico, Pakistan, and Egypt.
The Suez Canal, a trade artery between Europe and Asia passes through Egypt. How these countries would police the non-compliant vessels using their waters are still to be ascertained.
However, as per IMO, those countries that have ratified the bill, represent 97 per cent of the global fleet. This means, the laggards, including Pakistan, will need to join the club, sooner rather than later.
The decision to implement a global Sulphur –dioxide limit of 0.50 percent m/m in 2020 was taken by the IMO during its Marine Environment Protection Committee (MEPC) meeting for its 70th session in London.
It has been for about a decade that International Maritime Organization has been pursuing for the reduction of Sulphur contents in fuel and oil. In the last quarter of 2019, it is high time that the UN agency and renounced world bodies are about to put their feet down and start denying birth to the vessels combusting Sulphur content.
Contraction in the Economy which has led to the shrinking of Development expenses is also serving as the pumpkin seeds for the struggling refineries. Refineries inventory of coal tar runs into billions of rupees, for example, if the coal tar inventory worth Rs 5 billion is vested as materialize-able loss in a refinery like NRL then what will happen to a naieve investor who just do not know about IMO-2020 and Solomon goose.
