Coal shippers may see a hike of between 20% and 40% in freight prices in 2020 once carriers switch to low-sulphur fuels, Anthony Knutson, principal analyst for Wood Mackenzie, has warned. Coal companies traditionally rely on cheaper, high-sulphur fuel oil. “Coal exporters and importers can expect a 20% to 40% step change increase in coal route voyage rates on a US dollar per tonne basis [if they switch to lower-sulphur fuel],” Knutson said in the report. However, the implementation of the International Maritime Organization's sulphur cap will force companies to find alternatives, from relatively untested and costly scrubber technology to purchasing new vessels capable of running on liquefied natural gas, Knutson said. The European Union is also considering introducing stricter rules that would require ships with more than 3,000 tonnes gross tonnage (GT) or larger to use cleaner fuels.
Coal shippers may see a hike of between 20% and 40% in freight prices in 2020 once carriers switch to low-sulphur fuels, Anthony Knutson, principal analyst for Wood Mackenzie, has warned. Coal companies traditionally rely on cheaper, high-sulphur fuel oil. However, the implementation of the International Maritime Organization's sulphur cap will force companies to find alternatives, from relatively untested and costly scrubber technology to purchasing new vessels capable of running on liquefied natural gas, Knutson said. The European Union is also considering introducing stricter rules that would require ships with more than 3,000 tonnes gross tonnage (GT) or larger to use cleaner fuels.