U.S. Coast Guard Sees Ships Switching to Cleaner Fuel in October

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June 3, 2019

U.S. Coast Guard Photo

By Stephen Cunningham (Bloomberg) — The U.S. Coast Guard expects ships to start switching over to cleaner burning fuels as soon as the fourth quarter to meet new international standards that kick in next year.

“Our focus has been on a smooth and transparent and consistent implementation of the 2020 sulfur cap,” said Jeff Lantz, director of commercial regulations and standards for the Coast Guard, referring to new regulations by the International Maritime Organization, the UN shipping agency.

From Jan. 1, vessels will have to burn fuel containing no more than 0.5% sulfur in most of the world, down from 3.5%. Ships fitted with scrubbers to remove the pollutant can continue using existing high-sulfur fuel. The tighter restrictions are expected to boost diesel demand, increasing the cost of fuel used in trucks and airplanes around the world.

While some ports are planning to deploy drones to enforce the new regulations, that’s not a route the U.S. is planning to go down just yet, especially given the few cases of non-compliance discovered in its coastal waters which have been governed by stricter pollution rules since 2015.

“We don’t see the need to go for more dramatic measures at this point in time,” Lantz, who heads up the U.S. delegation to the IMO’s Marine Environment Protection Committee, said in a phone interview on Thursday.

Lantz dismissed speculation that the U.S. last year sought to slow implementation of the rules, given concerns that they could cause fuel prices to spike in a re-election year for President Donald Trump.

“The U.S. did not propose to slow anything down,” Lantz said. “The U.S. is quite well prepared on compliance” with its refineries as capable as any others in terms of providing fuel that meets the standards, he said.

© 2019 Bloomberg L.P

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