CMA CGM puts sulphur-content rule compliance cost at $2b

The French-based shipping giant that took over Singapore's Neptune Orient Lines (NOL) estimates it will cost about US$1.5 billion (S$2.06 billion) to comply with a green shipping regulation to cap sulphur content in marine fuels.

CMA CGM said the estimate was based on an extrapolation of its US$15 billion or so share in costs that the cap will likely impose on the global container ship industry.

The 0.5 per cent cap on sulphur content will take effect by 2020.

It would cost the larger international shipping sector - which includes both cargo and passenger carrying vessels - about US$60 billion, said Mr Nicolas Sartini, chief executive of APL, which CMA CGM acquired in 2016 when it bought out NOL in 2016. The combined group holds about 10 per cent of the container shipping market.

Mr Sartini named several steps CMA CGM group intends to take to comply. The French giant has already commissioned the construction of nine new liquefied natural gas (LNG)-fuelled container ships, the single biggest investment made by a container shipping company so far in ships to be powered by the cleaner burning fossil fuel.

It also plans to use sulphur cap-compliant fuel oils where possible and install scrubbers on ships that may have to run on high sulphur-heavy fuel oil.

Scrubbers remove sulphur and other pollutants from exhaust gas emitted by ship engines.

A version of this article appeared in the print edition of The Straits Times on October 04, 2018, with the headline 'CMA CGM puts sulphur-content rule compliance cost at $2b'. Print Edition | Subscribe