Will new 2020 maritime emission standards trigger the next recession?

[brewer12345]

Quote:

Originally Posted by Christine The price of oil has been high before. What happened then should be googleable. But what about all the ships? Will they need to upgrade their engines for this? The eventual cost of that will be added to the cost of the goods transported?

The use of low sulfur fuel may require some modest modifications to the existing engines, but it won't be a huge deal. The bigger issue may be what will happen to refined fuel prices. The ships can be retrofitted with scrubbers and still burn the dirty fuel and comply with the new regs. However, scrubbers are not really a proven technology for ships, they cost money, and they take time to manufacture and install. That means that there is the potential for chaos in this refined fuels market in 16 months or so.

[GravitySucks]

Quote:

Originally Posted by Walt34 Yawn. Since I don't own any ships I'm not gonna concern myself with this.

If you have a lot of equity mutual funds you probably do own a piece of one!

[Christine]

Quote:

Originally Posted by brewer12345 The use of low sulfur fuel may require some modest modifications to the existing engines, but it won't be a huge deal. The bigger issue may be what will happen to refined fuel prices. The ships can be retrofitted with scrubbers and still burn the dirty fuel and comply with the new regs. However, scrubbers are not really a proven technology for ships, they cost money, and they take time to manufacture and install. That means that there is the potential for chaos in this refined fuels market in 16 months or so.

So basically the ships can either buy the more expensive cleaner fuel or install a scrubber which costs time and money. In both cases cost is up.

[brewer12345]

Quote:

Originally Posted by Christine So basically the ships can either buy the more expensive cleaner fuel or install a scrubber which costs time and money. In both cases cost is up.

Yes, but I guess I did not state the conclusion. A lot of (most?) ships will not install scrubbers from the outset. That means they will basically burn diesel fuel when the rules go into effect. Do we have enough refinery capacity globally to cope with the sudden surge in demand? It takes years to open a new refinery even if you don't have first world regulations and ecological concerns. So if there isn't enough capacity to go around, we are all stuck with whatever the fallout turns to be. $10/gallon diesel fuel could make life rather bumpy.

[Christine]

Quote:

Originally Posted by brewer12345 $10/gallon diesel fuel could make life rather bumpy.

So direct fuel costs up for all with diesel engines. Including my motorhome. In addition to indirect costs from ocean freights.

Not so good unless you own a refinery.

[braumeister]

Diesel and gasoline both come from the same barrel of crude oil. Typically, a refinery produces about 20 gallons of gasoline and 12 gallons of diesel from a 42 gallon barrel of crude, among other products.

So if demand for diesel jumps, they will make more of it, and the cost of both will rise accordingly.

[Totoro]

Not worried, impact may happen for a short period, but no biggie.

https://www.tankershipping.com/news/...ance_52055.htm

Had a radio show here discussing this here a while ago. One fleet owner was going to switch, the other one was going to install scrubbers everywhere.

Depends on fleet size, age, room on the vessel etc .. it should push up cost of shipping a little bit, but a one year payback period (at current estimated prices) mean it's not that much relatively speaking.

Shipping prices as trigger for recessions is laughable. It's the other way around.