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Mémoire
Bachelor thesis

Implications for shipowners and charterers of the IMO 2020 low sulphur regulations

    2020

51 p.

Mémoire de bachelor: Haute école de gestion de Genève, 2020

English The objective of this thesis is to evaluate the effects of the implementation of the International Maritime Organization (IMO) 2020 regulations of low Sulphur emissions on the shipping industry. The new amendments to MARPOL Annex VI that came into force on January 1st, has generated as great deal of anticipation and uncertainty for shipowners and market participants. The choices that shipowners were, and still are, faced with is whether to operate their vessels on more expensive compliant fuel of less than 0.5% Sulphur content or invest in a new technology of onboard exhaust treatment systems (scrubbers) that allow them to operate on less expensive high Sulphur fuel oils. The difference in price between low Sulphur fuel oil and high Sulphur fuel is the determining factor as to the profitability of investing in scrubbers. Prior studies have concluded that certain types of scrubbers offer a short payback period and can offer a distinct advantage to the owners of such systems. The price difference in fuel types was proving to be profitable for the owners of scrubber fitted vessels during the first months on 2020 until the economic disruption of the Covid-19 pandemic and the ensuing crash in oil prices. This study aims at analysing the financial presentations that were published by selected shipping companies who invested in scrubber systems and compare them with the current market conditions and possible developments. Another aspect that will be considered, is the speed of vessels operating with scrubbers compared to those that are not. Fuel consumption represents the largest portion of operational costs for merchant ships. The speed of vessels has an exponential relationship to the amount of fuel that they consume. By observing a sample of vessels this study has found that scrubber fitted vessels do in fact operate considerably faster than non-fitted vessels. At the current low price difference between high Sulphur fuel and low Sulphur fuel, the conclusion of this research is that scrubbers are not a profitable investment at the present time, they do however still hold the potential of becoming profitable if oil demand recovers to pre-pandemic levels in the next few years.
Language
  • English
Classification
Economics
Notes
  • Haute école de gestion Genève
  • International Business Management
  • hesso:hegge
License
License undefined
Identifiers
  • RERO DOC 329869
Persistent URL
https://sonar.ch/hesso/documents/315067
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