IMO 2020 sulfur cap
Since January 1, 2020, marine fuel may not exceed 0.50% sulfur outside control areas, 0.10% inside them; the change of fuels has produced machinery damage and bunker disputes.
On January 1, 2020, the maximum sulfur content of marine fuel falls worldwide from 3.50% to 0.50%, under Annex VI of MARPOL. In sulfur emission control areas, the Baltic, the North Sea, North American coasts and the US Caribbean, the limit was already 0.10% since 2015, and the Mediterranean was added on May 1, 2025. Shipowners can choose between burning compliant fuel, marine diesel or very low sulfur fuel oil (VLSFO), fitting an exhaust gas scrubber that removes sulfur at the funnel, or switching to liquefied natural gas. Ships have been barred from carrying non-compliant fuel since March 1, 2020, unless fitted with a scrubber. The insurance consequences are of two kinds. The first lies in bunkers: new VLSFO blends, of variable composition, have caused incompatibilities between supplies, deposits in filters and engine damage. The hull policy answers for machinery damage if it is fortuitous, but not for the fuel itself or the cost of purging the bunkers, and the owner turns against the supplier, with short contractual limitations of liability. The second is compliance: a violation means a fine and detention of the ship, and several ports ban open-loop scrubber discharges.
Textbook case. Bulk carrier loads 1,500 tonnes of VLSFO in Singapore. Three days later, the main engine fuel supply filters clog, the engine stalls twice in a channel. Damage to an injection pump: USD 180,000. Purging and replacing 1,500 tonnes of bunkers: USD 1.1M. The hull policy pays for the pump, after deductible. The fuel and purge stay with the owner, who claims against the supplier, whose terms cap liability at the supply price. A bunker surveyor is appointed within 48 hours to take samples.
IMO 2020, IMO 2020 sulfur cap, 0.50% sulfur limit, marine fuel sulfur limit, emission control area, SECA, VLSFO
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