New rules will come into effect next year in what has been described as the biggest shake-up in the shipping industry for decades. From 1 January 2020 the International Maritime Organization (IMO) will ban ships from using fuels with a sulphur content above 0.5%, compared with 3.5% before the deadline.
This new environmental regulation, IMO 2020, is aimed at improving human health by reducing air pollution. Only ships fitted with sulphur-cleaning devices known as scrubbers will be allowed to continue burning high-sulphur fuel. Ship owners can also use cleaner fuel such as liquefied natural gas (LNG).
There is still a question over whether jurisdictions and ports could restrict the use of certain types of scrubbers due to uncertainty over the effects of the waste water that gets pumped into the sea. Earlier this year, ten environmental groups called on the IMO to impose an immediate ban on the use of scrubbers.
Users of the devices argue that there is no conclusive scientific research showing that discharges from open loop scrubbers – which wash out the sulphur – cause environmental harm. The IMO has encouraged further study into the impact of scrubbers on the environment.
Around two-thirds of traded salt is shipped by sea. Freight rates for salt are determined by trends in the shipping industry as a whole and IMO 2020 is expected to increase operating costs and push up overall freight costs from 2020.
De-icing salt is a key raw material in the US$70Bn commercial landscape maintenance and snow removal market in the USA. In recent years, salt has been shipped opportunistically from as far away as Egypt and Ukraine to supply this market. The new 1 January 2020 rule may increase costs for international salt producers hoping to compete with domestic US salt suppliers in this lucrative and growing industry.
Roskill’s new Salt: Global Industry, Markets & Outlook report was just published in November 2019. Click here to download the brochure or sample pages or access further information.
Raw material trade flows involving the salt industry will be discussed in detail at Roskill’s upcoming Salt 2020 conference in Toronto.