Photo: Image courtesy of Hapag-Lloyd

Hapag-Lloyd to trial LNG-conversion vessel in 2019

Hamburg-headquartered shipping company Hapag-Lloyd is set to trial an LNG-conversion vessel during 2019, as it looks to keep the costs down amidst new IMO regulation. 

With a stricter International Maritime Organisation emissions regulation (IMO 2020) coming into force as of January 1, 2020, the new sulphur cap for compliant fuel oil will be lowered from 3.5 percent to 0.5 percent.

This new regulation is aimed a improving the ecological footprint of the shipping industry, and the majority of all vessels are expected to be operated with low-sulphur fuel oil by then.

Using low-sulphur fuel oil will be the key solution for the shipping industry and Hapag-Lloyd to remain compliant, the company said in its statement.

At the same time, the utilization of the compliant low-sulfur fuel oil comes along with an increase in fuel costs, which experts estimate to initially amount up to $60 billion annually for the entire shipping industry.

On the assumption that the spread between high-sulphur fuel oil (HSFO) and low-sulphur fuel oil (LSFO 0.5%) will be $250 per tonne by 2020, Hapag-Lloyd estimates its additional costs being around $1 billion in the first years.

Therefore, the company developed a Marine Fuel Recovery mechanism, which will be gradually implemented from January 1, 2019, and replace all existing fuel-related charges.

In addition to the LNG conversion vessel, Hapag-Lloyd intends to conduct trials using exhaust gas cleaning systems (EGCS) on two others during 2019.

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