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Business News of Saturday, 21 December 2019

Source: Goldstree Business

Ghana readies to implement shipping sulphur cut

Government is considering issues concerning the availability of fuel that meets the new global Sulphur cut regulations as well as the proper handling of ships coming into the country’s ports without the compliant fuel as the requirement comes into effect in less than two weeks, beginning January 1, 2020.

The considerations also include the availability of facilities to test fuels in use by ships among others. This is part of key measures being undertaken to enable smooth implementation of the policy.

Although Ghana does not have a national flag shipping line, nor in fact any locally owned shipping lines at all, its two sea ports, at Tema and Takoradi respectively rank among the busiest ports on the West African coast and ongoing expansion projects coupled with recently instituted state policies aimed at making their use more cost competitive for shippers, are expected to significantly increase the frequency of ship calls even further.

Importantly, Ghana and all Member States of the International Maritime Organisation (IMO) including key stakeholders in the maritime sector have confirmed the general readiness to meet the 2020 global Sulphur cut requirement.

This was highlighted during a recent roundtable industry meeting in the United Kingdom hosted by IMO together with its partners in the shipping and refineries sectors in assessing the general compliance of the requirement which saw increasing confidence towards implementation of the policy.

The IMO and shipping industry have issued a series of comprehensive guiding principles on compliance for shipping companies and crews to assist Member States and the shipping sector to effectively implement the policy.

The guiding principles include ship implementation planning guidance which addresses issues such as risk assessment for new fuels and tank cleaning.

Importantly, some key initiatives have been taken domestically to enable players in the maritime sector brace up ahead of its implementation. For instance, the Ghana Maritime Authority (GMA) in collaboration with the Ghana Shippers’ Authority and key stakeholders have climaxed a nationwide sensitisation campaign aimed at educating members in the industry on the impact the policy will have on their businesses as it is expected that the implementation will likely result in higher freight rates for all category of shipments.

Consequently, an Inter-Ministerial Committee consisted of the GMA, the Shippers’ Authority, the National Petroleum Commission, the National Petroleum Authority, Ghana Ports and Harbours Authority, Ghana Revenue Authority Customs Division have recommended some key measures for implementation.

The new global cap being implemented by the IMO – the regulatory authority for international shipping – requires ships to cut sulphur oxide emissions from the current limit of 3.50 percent m/m (mass by mass) to 0.50 percent m/m.

This will significantly reduce air pollution from ships with positive benefits for both human health and environment in contributing to reducing diseases such as stroke, lung cancer and cardiovascular disease as well as acidic rain.

In Ghana it is also being seen as possibly a forerunner for a reduction in the Sulphur content in fuel used by vehicles and power generation equipment such as generating sets.

Background

The new limit is part of the International Convention for the Prevention of Pollution from ships (MARPOL), a key environmental treaty under the auspices of the IMO.

Both the IMO and the shipping sector – as well as refineries and fuel (bunker) suppliers – have been rigorously preparing the sector for the new regulation. Instructively, for most ships this will mean a switch to new types of compliant fuel oils, that is very low sulphur fuel oil (VLSFO), or marine gas/diesel oil.

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