In Singapore, High-Sulfur Fuel Could Lead to Prison

Singapore is known as the world's largest bunkering hub, and Singapore-based refineries are quickly gearing up to provide products that meet the new IMO standard for 0.5 percent low sulfur fuel oil. Singaporean authorities are also making moves to enforce the new IMO requirement with local regulations: they have already banned the use of open-loop scrubbers within Singaporean waters, and they are planning to apply the country's Prevention of Pollution of the Sea (Air) Regulations to the new sulfur limit. 

Singapore's laws on air pollution are already strict. If a ship fails to comply with emissions regulations, the owner and the master may both be held liable and sentenced to a fine of up to $7,400 or a prison term of up to two years. The law already provides a maximum limit for fuel sulfur content pegged to the global maximum specified by IMO, which will ratchet down to 0.5 percent on January 1, 2020. 

According to Bloomberg, Singapore's enforcement regime may be particularly important for the efficacy of the new global sulfur limit. Goldman Sachs forecasts that roughly 20 percent of the world's fleet will simply not comply with the new requirement in the first year of implementation; OPEC's estimate is slightly higher at about 25 percent. Given these predictions and the large price incentive to use heavy fuel oil, enforcement action may be required in order to secure widespread adoption of the rule. 

Singapore is perhaps uniquely well-suited to the task of regulating marine fuel: Its bunkerers delivered nearly 50 million tonnes last year, more than at any other port in the world. Vessels come to Singapore to fuel up, and under the IMO 2020 sulfur regulation, vessels may not carry non-compliant fuel for their own use unless they are equipped with scrubbers - meaning that compliance can be established with a  straightforward lab test of the contents of a ship's fuel tanks.