New UN Shipping Rules to Boost Climate Change, Wipe 3% Off US GDP by 2020

IMO Flag
Flag of the International Maritime Organization. By Denelson83 – Derivative of Image:Flag of the United Nations.svg and an image at Flags of the World., CC BY-SA 3.0, Link

Guest essay by Eric Worrall

The United Nations International Maritime Organisation is in the process of introducing new marine diesel standards which economists worry will have a serious negative impact on Climate Change and the US economy.

Sulphur-emissions rules for shipping will worsen global warming

The IMO’s rules could also wipe 3% off America’s GDP

The imo will cut emissions of sulphur either by reducing its content in marine fuel from 3.5% to 0.5% from 2020 or by requiring ships to remove it from exhaust fumes. Sulphur from ships causes acid rain and air pollution, which contributes to between 212,000 and 595,000 premature deaths a year and 14m cases of childhood asthma, according to research published in Nature Communications in February.

Most shipowners will switch to pricier low-sulphur fuels. But if all ships did so in 2020, demand for them would double (see chart) and the industry’s fuel bill would rise by $60bn, roughly the entire sum spent in 2016, say analysts at Wood Mackenzie, a research firm. It would also have a dramatic impact on aviation and road transport. Ships run on a heavy residue that remains after petrol, diesel and other lighter hydrocarbons are extracted from crude oil in refining. Competition for lighter fuel that clean ships require could raise the price of diesel for lorries by 50% and for jet fuel by 30-40% in 2020, reckons Philip Verleger, an energy economist. The resulting spike in global transport costs, he says, would hit world trade and wipe a staggering 3% off America’s gdp and 1.5% off the whole world’s in 2020.

Worse still is the effect of the new rules on global warming. The Intergovernmental Panel on Climate Change, a un-backed body, says sulphur emissions have a net cooling effect because they scatter sunlight in the atmosphere. Sulphur also helps to form and thicken clouds that reflect sunlight away from the Earth.

Read more: https://www.economist.com/business/2018/10/27/sulphur-emissions-rules-for-shipping-will-worsen-global-warming

The rationale behind the move is apparently a study published in February, which suggested cleaner burning fuel would substantially reduce childhood asthma rates, and deaths from diesel particulates.

As someone who suffers from pollution triggered asthma I am concerned about pollution.

But according to The Economist, this UN rule change will have a devastating global economic impact, especially on the USA.

Large shippers will be able to afford expensive scrubbers, but the expense will put small shippers at a serious commercial disadvantage; small shippers will be forced to either buy expensive low sulphur diesel, putting pressure on road transport and aircraft diesel supplies, or small shippers will have to pay for expensive smokestack scrubbers they can’t really afford.

Big shipping companies will potentially make an enormous profit from this UN rule change, at the expense of their smaller competitors and the rest of the global economy.

Wiping 3% off US GDP, and spiking transport fuel prices by 50% may also have a political impact on the USA, around the time of the next Presidential election.

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October 26, 2018 12:03 am

These international regulations are enforced by each country that ratifies each treaty. When a merchant vessel arrives in port, an army of inspectors turns up, to inspect logs both hand and automatically produced. They inspect equipment, making sure it is at the correct revision level and working. The most recent treaty change that I am aware of is ‘ballast water management and the USA are the most strictest of inspectors…

October 26, 2018 12:52 am

“Sulphur also helps to form and thicken clouds that reflect sunlight away from the Earth.”
Only at low altitudes

The sulfur in jet fuel has been increased, for high altitude flights to increase pressure. This creates stratospheric clouds which trap heat. NASA looked into this, but, anything that might throw doubt on CO2 being evil, gets no funding, and so NASA left it there.

Flight Level
October 26, 2018 1:23 am

Permitted only transport and state controlled fuel attributions are well established communist traditions.
Nothing new under the sun. Just ramping up on a worldwide scale.

Peta of Newark
October 26, 2018 1:25 am

As someone wondered, How did the sulphur get into the fuel?

The standard answer would be that it came from a time in Earth’s history when plant growth was particularly lush and luxuriant. A time when the plants grew so fast that the decomposition processes couldn’t keep up.

Haha, just like we have now. 70% water. 10% barren dry desert (I would assert to be man-made), 10% frozen desert and 10% left to grow *everything*

And as soon as anything does grow, we eat it, poison it, plough it or, The Most Hideous Crime Possible, we burn it. Safe in the knowledge imparted by out primary-school teacher that all plants need is CO2 and water and are simply begging and gagging to be eaten or burnt.

Back on topic, is it impossible that sulphur had anything to do with the luxuriant growth of past times?
Lets ask some Scandavian tree growers:
https://www.telegraph.co.uk/news/worldnews/europe/sweden/1403483/British-acid-rain-helps-our-trees-says-Norway.html
What was is the cost of using 10% of the electricity from a coal-powered station to clean its own flue, to dig holes in limestone quarries, to bury or otherwise ‘lose’ the resulting gypsum – even before you account for the cost of the lost tree production

We might ask those amongst us with the biggest willies, NASA, about Global Greening. Is it really down to CO2.
We might wonder why farmers of a century ago were really happy to have railway lines running across their fields. Surely those steam engines were a serious fire hazard to ripening cereal and hay crops. Were those farmers insane?
We might ask modern farmers, especially in the UK and especially *especially* the growers of oil-seeds about the fertilisers they now need – fertilisers fortified at some expense, with sulphur.
You cannot add sulphur to (agricultural grade) fertiliser without removing something already there, so what cost to farmers of buying more (of a more expensive) fertiliser?

We might ask the parents of asthmatic children if the children were bottle or breast fed. We might ask about home hygiene – were the mothers obsessed about bugs and germs and smells, constantly drenching the home in perfumed soaps, cleaners, air-fresheners and laundry products.
We might ask when the young children were introduced to the myriad irritants, allergens and flat-out poisons found in vegetables. Even before we get into the hormonal horror that is soya.

Not that we need to ask the parents.
Just look at the children as young adults. Are they short, fat, of low intelligence, easily bored & irritated, addicted to soda-pop and cell-phones? Tells us all we need to know.

Is sulphur a vital ingredient that plants use to make important nutrients, Vitamin A by example.
What about the B vitamins. Vital for nervous function, being aware that the tingling in your fingers coming from sugar and alcohol use are exactly the same sort of cells that compose your entire brain.
Is a nutrient missing or is something there that shouldn’t be? Aluminium not least.

If your fingers and toes are tingling, hot, cold, dead, overly sensitive, wtf is happening inside your head?

I think we know the answer……..
The GHGE and Climate Warming Global Weirding Change

Flight Level
Reply to  Peta of Newark
October 26, 2018 1:46 am

Excellent !

Dean
Reply to  Peta of Newark
October 26, 2018 6:20 am

Umm that’s great, but oil is derived from ancient animal life, not plants. That’s coal……

Editor
October 26, 2018 1:29 am

Sulphur from ships causes acid rain and air pollution, which contributes to between 212,000 and 595,000 premature deaths a year and 14m cases of childhood asthma, according to research published in Nature Communications in February.

Premature deaths are unverifiable GIGO stats and claims about asthma are ridiculous.

All five of the EPA’s “criteria pollutants” have been drastically reduced since 1980, yet asthma continues to rise:

https://wattsupwiththat.com/2017/04/03/the-misuse-of-asthma-as-a-justifaction-for-epa-rules/
https://wattsupwiththat.com/2018/05/17/putting-the-clean-air-act-on-ice/

Roger Caiazza
Reply to  David Middleton
October 26, 2018 5:36 am

Excellent graphics. Thank you

Olavi
October 26, 2018 2:09 am

EU did allready that suphur directive. In Finland all ships use lowsulphur fuel or CNG. All new ships have CNG using engines. To use gas to fuel ships is most brobable development in future. So it does make lot of jobs in shipyards all over the globe. I’ll think it boost economy lot more than expenses to change the fuel. If China sends ships over with wrong fuel, they’ll cant go in any harbour in developed contry. So think it again is it so bad?

Ivor Ward
October 26, 2018 2:17 am

Perhaps they need some of Moonbeams evidence based policy.

SAMURAI
October 26, 2018 2:46 am

Yeah, let’s destroy the world economy ‘cuz Leftist hacks want to destroy capitalism through the CAGW hoax and any other means necessary…

There is now overwhelming empirical evidence every single catastrophic Global Warming prediction is completely devoid from reality…

Ironically, the larger and longer the disparities between CAGW projections vs. reality become, the worse future calamitous projections become, as does Leftists’ certainty that CAGW is an irrefutable fact that can’t even be debated…

This isn’t sciecnce, it’s aggressively ignorant religious dogma.

old construction worker
October 26, 2018 3:06 am

‘The United Nations International Maritime Organisation is in the process of introducing new marine diesel standards which economists worry will have a serious negative impact on Climate Change and the US economy.’
Before someone jumps down my throat let me say diesel engines fumes needs to be clean up. There is a “but“. I did not get a chance to vote on the representatives who came up with the rules nor is our U.N. representative a elected position. It would seem to the regulations would have to be ratified by the U.S. Congress as if it were a treaty.

Greg Freemyer
Reply to  old construction worker
October 26, 2018 4:40 am

Old construction worker,

The garbage they currently burn on ships on the open ocean is far worse than diesel. When oil is refined about 10% of the original crude is left over as residue.

I assume it is dense in the worst of what makes crude oil crude!

That’s what bunker C is, or “residual fuel oil”.

In sulfur terms:

Diesel sold in the US for highway use: 15 PPM sulfur
Current emission limit on the open ocean: 35,000 PPM sulfur
New regulation: 5,000 PPM sulfur

Personally, and ignoring political issues, I’d be happy to see 35,000 ppm sulfur fuel banned globally.

Unfortunately there are still 3rd world countries that burn “residual fuel oil” to make electricity.

Alasdair
October 26, 2018 3:18 am

I suspect that all these “Premature Death” papers and reports suffer from “Hockystickitus”.
They seem to come up with the same conclusion:- “This nasty thing (whatever) will kill you; so something must be done”.

We are all suckers for this sort of statistically manipulated pseudo science which makes it very dangerous. Rich pickings for those who wish to control.

Gregory Adams
October 26, 2018 3:57 am

Someone please explain how that group of un-elected people have any power over anyone? They are not a government and have no power to legislate or regulate anyone.

Greg Freemyer
October 26, 2018 4:19 am

For those advising it won’t be enforced, that is very unlikely.

And in this case they are also planning to enforce it the selling end. Ships won’t be allowed to buy fuel oil (bunker c) unless they have a multi-million dollar emission scrubber.

And the UN IMO is talking about making a regulation to make it a finable offense if a ship is caught even carrying fuel oil, regardless of if the logs show it was burned or not.

As to who enforces the fine, I believe it is the country where the ship is registered. So if China as an example wanted to ignore this regulation and openly allow fuel oil to be sold to ships registered to China, I’m sure they could, but that is really unlikely.

For one thing, China is implementing their own ECA (emission control area) just like the US and EU have. China has been using LNG (liquid natural gas) as fuel on their inland waterways routinely for several years. LNG is the least polluting liquid fuel possible (CH4 + O2 => CO2 + H2O).

I really don’t think cheating will happen on a large scale and neither does the shipping industry.

Reply to  Greg Freemyer
October 27, 2018 6:52 am

It is the country that determines a ship has failed an inspection that fines the ship, and detains the ship until the fine is paid.

It is a daily occurrence for some shipping companies….

Steve O
October 26, 2018 4:21 am

What is proposed to be done with the fuel that nobody will now be able to use?

Greg Freemyer
Reply to  Steve O
October 26, 2018 5:17 am

Since the above rule was passed 2 years ago, refineries around the world have been working to install upgrades that refine more of the crude oil and leave behind less residue.

The expectation of Shell is the global market for residual fuel oil will drop from ~10% of the fuel market to about 6.5% as of Jan 1, 2020 (the day this regulation kicks in).

Many billions have already been invested by owners of refineries globally to reduce the amount of residual fuel oil they produce. In the next few years, that will continue and there will simply be a lot less residual fuel oil created in a few years.

Reply to  Steve O
October 27, 2018 6:57 am

I understand from friends who have refinery experience that we are now developing large piles of sulfur.
I expect someone will invent or discover a need for this additional material soon.

Tom in Florida
October 26, 2018 5:35 am

“Big shipping companies will potentially make an enormous profit from this UN rule change, at the expense of their smaller competitors and the rest of the global economy. ”

If this could be true, then we have to look at who is buying stock in these big shipping companies.

October 26, 2018 6:43 am

Sulphur in fuel is itself a fuel component. Making sulphuruc acid from sulphur gives net power to phosphate fertilizer plants. So ships would also burn more ‘clean’ fuel.

Fleming
October 26, 2018 6:51 am

Some random comments;

Most large ships (big marine diesel engines) run on Heavy Fuel Oil which can be described as the sludge left in the refinery after the other fuels have been extracted. It is thick black stuff and has to be heated to 50degC or more before it will flow and can be pumped.
The ships will also carry a low sulphur fuel closer to what we would call diesel.
Some countries have a rule that ships have to change to low sulphur fuel as they draw close – An example is the English Channel where ships have to switch fuel as they enter and burn “the clean stuff” close to land.

LNG is used as a fuel when that is the cargo and the ship is using what boils of from the cargo tanks.

I was talking to a yachting couple whose boat sank and they took to a liferaft. The ship that spotted them circled around them for a hour before picking them up. The reason was that like an old Fordson tractor that ran on petrol(gasoline) when cold then switched to paraffin(kerosene) when warmed up, they had to switch from heavy fuel oil to diesel (Manoevering Oil) if they were to be able to re-start the engine after stopping.

There are satellite photos around showing the clouds forming in a ship’s wake after being “seeded” by the SO2 from the ship exhausts.

old white guy
October 26, 2018 7:04 am

why would the US care or even do anything that the UN suggests?

Loren Wilson
October 26, 2018 10:46 am

Most of the acid rain produced by the high-sulfur fuel oil goes right into the ocean. Same for the particulates.
As pointed out above, many ports already require ships to switch to low-sulfur fuel before approaching the harbor. California already has ports where the ships turn off their engines and plug into the electrical system at the dock. there are advantages to switching to lower sulfur fuel or natural gas. NG is cheaper per BTU than fuel oil, but storage is more expensive. Engine maintenance goes down as well.

Editor
October 26, 2018 10:56 am

I do not remember the world’s governments giving the United Nations the power to make laws, rules, or regulations that are enforceable on the individual nations and their shipping fleets.

Can anyone enlighten me here?

Reply to  Kip Hansen
October 27, 2018 5:40 am

The regulation is made by treaty at the IMO.

​Monitoring, compliance and enforcement of the new limit falls to Governments and national authorities of Member States that are Parties to MARPOL Annex VI. Flag States (the State of registry of a ship) and port States have rights and responsibilities to enforce compliance.

http://www.imo.org/en/MediaCentre/HotTopics/Pages/Sulphur-2020.aspx

Reply to  Kip Hansen
October 27, 2018 6:53 am

Your country and mine are members of IMO and we all agree to abide by the voted for, rules.

keith
October 26, 2018 11:09 am

Can’t image any Russian, Chinese or vessels registered in tin pot countries like Panama taking any notice of this. The idiots in the UK, of course, will jump and ask ‘how high’ but as hardly any vessels are registered in the UK any more, it won’t make any difference.

Reply to  keith
October 27, 2018 6:49 am

All countries on the ‘White List’ will enforce these rules against all vessels entering their ports. There are many international treaties (as shipping is inherently international) covering every aspect ship operations.

“Requirements for the consumption of low sulphur fuels in Emission Control Areas (ECA) are not uncommon.
Under MARPOL Annex VI the International Maritime Organisation (IMO) can establish ECAs where vessels have to comply with mandatory measures for the control and reduction of nitrogen oxides (NOx) and sulphur oxides (SOx). There are currently four ECAs, comprising the Baltic Sea, the North Sea, North America and the United States Caribbean Sea areas[1]. From 1 January 2015, vessels have been required to consume fuel with less than 0.1% sulphur content while operating in these ECAs (unless the vessel is fitted with equipment such as scrubbers to reduce the sulphur in exhaust fumes, or is operating on alternative fuel such as LNG, or has a dispensation conferred by Reg. 14.4.4).”

Any vessel arriving in a port in an ECA HAS TO provide evidence of compliance. Including vessels registered in your tin pot countries.

Ships are routinely ‘arrested’ for non compliance with an of these treaties. Masters and Chief engineers are routinely fined.

Shipping companies employ specialist companies to enforce compliance with these regulations to minimize the occurrence of fines or worse: holding up a ship for a day or two, which is very expensive.

Have a look at this ‘quick’ check list from the American Bureau of Shipping – it is a guide on how to reduce your likelihood of being detained in port due to an infringement. Its only 44 pages long…..

https://ww2.eagle.org/content/dam/eagle/rules-and-resources/Flag-and-Port-State-Information/Quick-Reference-Guidance-for-Reducing-Port-State-Detentions

catcracking
Reply to  Steve Richards
October 29, 2018 5:55 pm

I believe 0.5% sulfur is 5000 ppm. Correct?
Ultra low sulfur diesel is 15 ppm. Is this too strict?

Paul C
October 26, 2018 3:39 pm

And when will the UN be banning the dimethyl sulfide emissions from the oceans? I think the amount of sulphur emitted by all those algae is supposed to be roughly equivalent to the sulphur emissions of all of mankinds activities combined.

Michael S. Kelly, LS, BSA, Ret.
Reply to  Paul C
October 27, 2018 6:17 am

Or the sulfur emissions of volcanoes? Mt. Pinatubo by itself put more sulfuric acid into the atmosphere in 1991 than human beings had done ever. This is pretty crazy, though the cost effectiveness people would argue that at $2 million per life saved, this makes perfect sense.

DaveAllentown
October 27, 2018 9:46 am

I am skeptical of the US 3% GDP loss claim.

By definition GDP is C + I + G + E(net).

C is consumption, I is investment and G is government spending, all irrelevant to this discussion.

That leaves E, or net Exports. We run an annual trade deficit of $800 billion. That is all lopped off GDP.

Trade with Canada and Mexico is predominantly over land. We run substantial trade deficits with most everybody else.

For us to lose 3% GDP ($600 billion) our shipped exports would have to drop to near zero while our shipped imports (well over $1 trillion) would have to remain unchanged.

If worldwide shipping evenly falls x per cent, our GDP will rise, not fall.

R Hall
October 27, 2018 10:00 am

I wonder whether this rule will apply to the Navies of the world?
It is one thing to impact the cost of the freight hauling shippers, but quite another to impact the costs and operations of the Navies and Coast Guards.

Catcracking
October 27, 2018 11:51 am

This will be like a tariff on imported goods from everywhere overseas and on exported goods from the US

October 28, 2018 5:58 am

There is a good article on this here

https://www.jwnenergy.com/article/2018/8/meeting-imos-new-limits-sulphur-marine-fuels/

Also see the linked and quoted brochure by Shell.

Reply to  It doesn't add up...
October 28, 2018 8:21 am

But the Political Class has decreed , Reality notwithstanding .