ONE chooses low-sulphur fuel for 2020 compliance

The network, integrating K Line, NYK Line and Mitsui OSK Lines, said in a briefing document that VLSFO, also known as hybrid oil, was “one of the most realistic and cost-efficient solutions to enable ONE to be compliant ready by 1 January 2020”. The group reported that it is in discussions with bunker suppliers for specifications.

The company noted that the long lead time and heavy investment for exhaust gas scrubbers – with a scrubber-equipped newbuild taking up to three years to build and retrofitting requiring more than a month in drydock – meant that it is not a viable option for compliance from 2020. But it did not rule out the use of exhaust gas scrubbers across some of its fleet in the ‘second phase’ and said that it was also “evaluating to charter vessels with scrubber systems to expand the number of compliant vessels in the fleet”.

Regarding the use of LNG as fuel, ONE reported similar constraints to scrubbers when it comes to newbuilding periods. It added: “Although our LNG-powered vessel deployment plan is not concrete at this moment, evaluation is underway where development of LNG bunkering environment is being further analysed… There are existing facilities and projects in Europe and we see some ongoing projects in Asia, such as in Singapore and Japan.”

ONE said it would start complying with the 2020 regulation before the effective date, as it takes several months to transit from non-compliant fuel. It noted that the current spread between heavy fuel oil and LSGO is approximately US$150-200 per tonne – a gap which is expected to increase in 2020, with an impact on operational cost.