Hapag-Lloyd is preparing customers for a mechanism to charge more for cleaner fuel

German container shipping giant Hapag-Lloyd said on Monday it is preparing customers for a mechanism to charge more for cleaner fuel starting next year to comply with tighter environmental rules.

The Hamburg-based firm said on Monday that it has developed what it will call a marine fuel recovery mechanism (MFR), which it will gradually introduce from Jan. 1, 2019.

With a stricter International Maritime Organisation emissions regulation (IMO 2020) coming into force in 2020, the new sulphur cap for compliant fuel oil will be lowered to 0.5 percent from 3.5 percent – involving a $250 per tonne price spread at current rates charged by refiners for the product.

The MFR formula combines consumption patterns of each vessel as well as cargo sizes, sea and port times with market prices for fuel oils.

Hapag-Lloyd, the world’s fifth largest container line, expects it will have to pay $1 billion more annually for low sulphur fuel in the first few years after the IMO.

 

 

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