German container shipping firm Hapag-Lloyd announced that one of its ships recently refueled in Rotterdam with a new, eco-friendly biofuel, as part of the company’s plan to reduce CO2 emissions generated by its operating ships.
According to Reuters, the tighten rules on ship’s sulphur emissions set by IMO from 1st January 2020, burden the profit outlook for Germany’s container shipping line “Hapag-Lloyd” for this year, after its successful year of 2019.
German container shipping company Hapag-Lloyd revealed plans to retrofit its 15,000 TEU boxship ‘Sajir’ to use LNG propulsion, in a pilot project expected to pave the way for converting large ships to LNG. The LNG conversion is expected to save 15-30% in CO2 emissions from the ship’s operation.
Hapag-Lloyd Cruises announced that it will use low-sulphur Marine Gas Oil on all expedition ships from July 2020. Currently, the company is using MGO in particularly vulnerable areas like the Arctic, Antarctica and Kamchatka. The routes will be managed on the basis an eco-efficient average speed, which aims to reduce fuel consumption by one third.
Ahead of the 2020 sulphur cap, Hapag Lloyd said that using low-sulphur fuel oil will be the key solution for the company to remain compliant. This fuel however, comes with an increase in fuel costs, something that made Hapag Lloyd establish a Marine Fuel Recovery (MFR) mechanism.
Speaking about the upcoming 2020 sulphur cap, Hapag-Lloyd said that this regulation will challenge the entire shipping industry. The company cites three ways to achieve compliance and notes that if this is achieved then the industry will become much greener.
Hapag-Lloyd will limit its costs to deal with increasing fuel prices that caused the company to cut its current profit outlook. Namely, as the company’s CEO, Rolf Habben Jansen noted, costs increased more than expected, something that puts pressure on the operating margins.
German shipping company Hapag-Lloyd’s CEO Rolf Habben Jansen said on Wednesday the issues were complex, but installing scrubbers to remove sulphur did not appear to be the company’s preferred option. He added that the company plans to give details of compliance with the sulphur cap within three to six months.
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