BRS Group has warned it is possible that shipping could become a last resort for producers of heavy fuel oil (HFO) bunkers.
Chairman Francois Cadiou said in the French shipbroker’s annual review that under the current regulatory regime HFO would always be cheaper than cleaner fuels because it is a toxic residue that is left at the end of the refining process.
“Although the demand for HFO should eventually decline, we could also envisage a future scenario where shipowners will be paid to take a by-product that nobody else wants or can use, something already seen in the recycling industry,” he added.
“Banning HFO in an orderly way so as to take care of everyone’s interest would be a sensible solution. It is already banned in Arctic and Antarctic areas,” the broker said.
The shipping industry needs to take drastic solutions and focus on the existing fleet in order to cut emissions, Cadiou argues.
At the end of 2022, just shy of 30% of the orderbook of 3,600 newbuildings consisted of dual-fuel units.
This represents about 350 dual-fuel ships per year up to 2025.
At this pace, it will take more than 100 years to have a full dual-fuel fleet in place, with no guarantee these vessels will fully meet the 2050 net-zero targets, the chairman said.
Cadiou also argues that a reduction of 20% in vessel speeds would immediately result in a 50% drop in CO2 and greenhouse gas emissions.
And he called for increased resources to be diverted to longer-term solutions such as the development of carbon-neutral e-fuels and the development of green corridors where cleaner alternatives would be available.
Carbon tax needed
“That is why the International Maritime Organization should also follow in the footsteps of the European Union and develop a carbon tax for shipping with a reasonable amount of levy per ton of CO2 to become the international norm and a way of levelling the playing field between HFO and cleaner fuels," the chairman said.
“The shipping industry could show its leadership now by phasing out HFO and in doing so make history,” he concluded.
