What is Low Sulphur Surcharge and why is it applicable..??

Currently all modern commercial ships run on fossil fuels such as MGO (Marine gas oil), MDO (Marine diesel oil), IFO (Intermediate fuel oil) , MFO (Marine fuel oil), HFO (Heavy fuel oil) collectively known as bunker fuel..

These fuels have a high content of sulphur which is quite harmful to the environment..

The International Maritime Organization (IMO) has been working to reduce harmful impacts of shipping on the environment since the 1960s..

The regulations for the Prevention of Air Pollution from Ships (Annex VI) seek to control airborne emissions from ships (sulphur oxides (SOx), nitrogen oxides (NOx), ozone depleting substances (ODS), volatile organic compounds (VOC) and shipboard incineration) and their contribution to local and global air pollution, human health issues and environmental problems..

In April 2018, more than 100 Member States met at the United Nations IMO in London and adopted an initial strategy on the reduction of greenhouse gas emissions from ships by at least 50% by 2050 compared to 2008 levels..

The current global limit for sulphur content of ships’ fuel oil is 3.50% m/m (mass by mass)..

The regulations to reduce sulphur oxide emissions has introduced a new global limit for sulphur content of ships and as from 1st of January 2020 the new global limit on the sulphur content will be 0.50% m/m..
IMO has advised several methods through which ships can meet lower sulphur emission standards..
Ships can meet the requirement by using low-sulphur compliant fuel oil. An increasing number of ships are also using gas as a fuel as when ignited it leads to negligible sulphur oxide emissions.

This has been recognised in the development by IMO of the International Code for Ships using Gases and other Low Flashpoint Fuels (the IGF Code), which was adopted in 2015. Another alternative fuel is methanol which is being used on some short sea services.

Ships may also meet the SOx emission requirements by using approved equivalent methods, such as exhaust gas cleaning systems or “scrubbers”, which “clean” the emissions before they are released into the atmosphere. In this case, the equivalent arrangement must be approved by the ship’s Administration (the flag State).

Low Sulphur Surcharge is a surcharge levied by the lines to cover the costs associated with using low sulphur fuel in line with the IMO 2020 Sulphur Cap regulation..