Implications of the IMO 2020 Sulphur cap from a Hull & Machinery claims perspective
23 September 2019
On 1 January 2020 the limit for Sulphur in fuel oil used in vessels operating outside designated control areas will be reduced from 3.5% to 0.5% under the IMO 2020 Sulphur Cap, set out in MARPOL Annex VI. These changes apply globally to all fuels used onboard vessels, whether in the main or auxiliary engines or other machinery. This will be one of the biggest changes to the marine industry in decades as Shipowners and Charterers must find ways to comply with the new rules or face heavy penalties which vary between jurisdictions.
Most attention has been focused on the impacts to P&I Clubs who may be left picking up the pieces in the event of non-compliance with the new rules by their members. However, Hull & Machinery insurers are not immune from losses arising as a result of the 2020 changes.