The significant rise in global freight rates caused by tightening emission control regulation from the International Maritime Organization (IMO) started on January 1, 2020 to help reduce air pollution from global ships is putting high pressure on steel exporters.
In particular, the marine sector consumed about 3.8 million barrels of fuel each day in 2017, which made it responsible for 50 percent of the global demand. The bulk of this fuel was high sulfur fuel oil (HSFO), which produced sulfur emissions of between 1% m/m and 3.5% m/m when consumed by most shipping liners. Getting emission levels to under 0.5% m/m will require a large commitment from the shipping industry.
Nevertheless, as IMO 2020 announced, the ships can only use marine fuels with a sulfur content of not more than 0.5% when operating outside Emissions Control Areas (ECAs). The current sulphur content limit is 3.5%. ECAs include the Baltic Sea, the North Sea, the North American ECA (which includes most United States and Canadian coastlines), the US Caribbean ECA (which includes Puerto Rico and the US Virgin Islands, Fastmarkets has learned.
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