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The maritime industry is facing great changes: Starting 1 January 2020, vessels will only be allowed to use fuel with a maximum sulphur content of 0.5 percent. The current standard is fuels with a sulphur cap of 3.5 percent. The so-called IMO2020 regulation is the first in a series of International Maritime Organization (IMO) measures to reduce marine pollution. Using low-sulphur fuel oil will be the key solution for the shipping industry and Hapag-Lloyd to remain compliant. Furthermore, it is the most environmentally friendly solution in the short term.
The stricter IMO emissions regulation will significantly improve the ecological footprint of the shipping industry. Based on the assumption that the spread between high-sulphur fuel oil (HSFO) and low-sulphur fuel oil (LSFO 0.5%) will be 250 US dollars per tonne by 2020, Hapag-Lloyd estimates additional costs of around 1 billion US dollars in the first years. For this reason, Hapag-Lloyd has developed the Marine Fuel Recovery (MFR) mechanism, which will be gradually implemented starting on 1 January 2019.
With our new Marine Fuel Recovery (MFR) mechanism, we have developed a system for our customers that we think is fair, as it allows for a causal, transparent and easy-to-understand calculation of fuel costs. The MFR, which will be reviewed quarterly (or monthly if fuel price fluctuations are above USD 45 per tonne), takes into consideration various parameters, such as the vessel consumption per day, fuel type & price (specific for HSFO, LSFO 0.5% and LSFO 0.1%), sea and port days, and carried TEU. These parameters derive from a typical representative service in the market on a specific trade.
Our vessels will start refueling with the more expensive LSFO 0.5% in Q4 2019 in order to fully comply with IMO2020 as from 1 January 2020.
Find further information regarding IMO2020 and Hapag-Lloyd's new Marine Fuel Recovery (MFR) mechanism.