IMO 2020 Sulphur Cap, SEA, Thailand and a feeling of doom

Thailand ready for IMO 2020 Sulphur Cap, but…
Like any other maritime nation, Thailand is steaming full ahead towards IMO 2020 Sulphur Cap (SC), and finds itself about ready for Jan 1 2020 deadline, investing into new FSUs and low sulfur fuel oil production. Like any other maritime nation, Thai approach to Sulphur Cap is stunningly one-sided. It’s mostly, about preparedness and capacities to produce and supply low sulfur fuels, plus potential gains for refineries, storages and bunker supply businesses.
One of Thai oil majors, Thai Oil Public Company Limited or Thaioil, a subsidiary of PTT Group and largest oil refinery in Thailand, is predicted to gain most, with some 60% of its’ production being distillates. Other majors, namely PTT GC, IRPC and BCP, are expected to boost their refinery production in the wake of refinery margin growth.
ExxonMobil was to start selling IMO 2020 compliant fuels in Laem Chabang, main port of Thailand, prior to the January 1, 2020, by the third quarter of 2019.
The largest operator in oil tanker and oil and petroleum storage in Thailand, PRIMA MARINE, revealed its’ plan to add eight FSU tankers of 300,000 dwt each, to its current fleet of seven FSUs, which accounts for 50% company’s profit, at present.
Exhaust Gas Scrubber Systems aren’t, so far, banned in Thailand ports and waters, and hopefully, will remain allowed for use. Maritime Port Authority in several countries banned the use of Exhaust Gas Scrubber System, providing no scientific evidence for its decision, nor inviting industry for consultation.
As of Aug 29, in South East Asia (SEA) region only Singapore and China banned scrubbers almost unconditionally, while the rest of Asia thought better of it, and didn’t, so far, indicate any such intentions.
There’s no clarity yet as to how exactly Thailand Maritime Authorities are going to enforce Sulphur Cap, what sanctions and punishments are they planning or proposing to implement, against Sulphur Cap violators. I believe, it’s a “wait and see” policy – the best policy under the circumstances. Not many States, so far, define and determine their future punitive practices, except some extremely enthusiastic followers and supporters of UN/IMO agendas, like say, Singapore.

… what Sulphur Cap Regulation really means?
It’s way too early to forecast, what’s in store for ships and shipowners, in year 2020, especially if we try to have a closer look at the whole Sulphur Cap scheme, its’ fundamentals and its’ disruptive potential.
Sulphur Cap Regulation is the first international regulation to hit all peoples and nations. Cost of everything will go up, simply because some 95% of world trade is carried out by ships. Cost of fuels, raw materials and production components will go up. Respectively, energy costs will go up. Construction costs will go up. Food costs will go up. Production costs will go up. People will spend more on energy bills and basic food, and therefore, buy less consumer goods (let alone expensive goods and services, such as medicine, houses and cars, cruise/tourism and leisure/hobby items), causing production reduction. Production reduction will trigger wages and workforce cuts. It’s a vicious circle, a snake eating its’ tail. Economy will be pushed into a reverse mode.
Thailand is heavily dependant on maritime shipping, both in imports and exports. Shipping disruptions, in worst scenarios, will disrupt nation’s everyday life and economy, with unpredictable consequences. The biggest headache with SC is, nobody knows, what negative impacts SC will bring in short, medium or long term periods.
The only thing we can be sure of, is total lack of anything socially and economically positive in SC implementation, because SC “scientific” validity just doesn’t stand any serious scrutiny.

Gap between South East Asian and Western nations
There is a growing gap between SEA and Western nations. I am not talking about economy characteristics, I am talking about the perception of the world, including environment, social issues and nationalism. I’ve got an impression, that many Thai people don’t understand and don’t accept modern Western social and environmental ideas and practices. If somebody would try to preach in Thailand multiculturalism, diversity, and guilt for being racist or xenophobic, or just Thai, like leftists practice it in the EU or in USA, he’s in for a big unpleasant surprise. It is true not for Thailand only, it is true for all SEA nations. They recognize themselves as independent, sovereign nations, and they’re proud of it. Modern Western ideology of self-destruction and self-loathing is absolutely alien for these nations, it goes off like water drops repelled from an oily surface.
Environment concern doesn’t seem to be on Thais problems top priority list, also, if on any problem list at all, top or negligible. How can it be a problem, if there’s absolutely no perception of catastrophic, of indeed, any Climate Change. Sea level remains the same, natural disasters don’t exceed historic levels, and there’s no shortage of fresh seafood, except at times when government implements new international regulations, aimed allegedly, at conservation of sea biodiversity. Not much known about the effectiveness of such regulations (nothing at all, actually), but seafood prices go up, no exception. It’s the only proven, perceptible and visible effect of environment protection.

Climate Change worldwide rally total failure in SEA
The best and most spectacular illustration of true Thai and other SEA nations stance on Climate Change fear-mongering, is perhaps, much-touted by mainstream media Climate Change worldwide rally on Sep 20 this year. Hundreds of thousands of children and teens marched through Western cities – some 310,000 in New York, some 350,000 throughout Australia, etc., on a Friday Climate Change Strike, being more than happy to skip the school or college. Mainstream media of course, mentioned rallies in South East Asia, too. Some 300 Climate Change protesters were found and head-counted in New Delhi, and some 200 (200 according to local sources, 240 according to Reuters) in Bangkok. An embarrassing fact – the majority of Bangkok protesters were Westerners with their children. Knowing leftists practices, I bet nucleus of those protesters enjoyed a free trip to Thailand, paid by rallies organizers. Hundreds of thousands in the West, and dozens in Asia – what can be more illustrative, than this awesome difference?

SC frustration
Problems meanwhile, arise with each passing day. Bunker suppliers, refineries, logistic companies, shipbuilders, insurers are either very concerned, or plain panicked. Even CEOs of major shipping companies, in a rare burst of sanity and sobriety, lashed at IMO with harsh criticism. What did they expect I wonder, waking up when the house is already engulfed in fire (ignited with their help, by the way)?
SC is a global regulation, thoughtlessly and irresponsibly ratified by coastal nations. The main and final strike will be landed on shipping not on Jan 1 2020, but in March, when ban on using all conventional fuels, globally, will come into force. The ship may use high-sulphur fuel only until she calls any port anywhere around the globe, even worse than that – the ship is violating SC, if bunker tanks are “dirty”, i.e. not cleansed and certified as clean. It means, that effectively, the ships can’t use old brands of fuel anywhere around the globe.
Thailand doesn’t depend on domestic shipping as heavily, as its’ neighbors, Indonesia, Malaysia, India and Philippines, do. Thailand domestic shipping is not as big and conspicuous as theirs, and because of it, if /when things come to worst, Thailand may suspend SC implementation in domestic shipping without much noise and public attention, avoiding IMO/UN hysterics and pressure.
But it won’t solve the main problem of possible logistics and supply chains disruptions, and inevitable prices hikes. That SC preparedness, touted already by many nations, is in fact, nothing more than a scratch on the surface of the problem. It’s factually, a technical readiness to supply ships with low-sulphur fuels, and nothing more than that.
Does any government of any nation around the world have contingency plan in case of serious supply chains disruptions, including disruptions of supply of fuels for power plants, and food supplies?

Nations are approaching a red line, fast
Nations across the world are approaching a red line, fast. The red line is dividing world as we know it, more or less comfortable or at least, survivable, for most of people, with developing economy and progressing technologies, from world yet unknown, but outlined in UN Green Agenda – austerity for everyone except elites; mass unemployment; shortages of everything from electricity to basic foods and medicine; sky-high cost of living; rationing; and of course, dictatorship, required for Agenda enforcement. Nations ruling elites will have to make a choice, by either staying with their people, or by crossing the line and joining globalist elite.
There’s a hope, that South East Asian nations will stand up against the UN and its’ numerous branches. If mass migration is of any illustration, SEA nations preferred nationalism and sovereignty to national suicide and “open borders” madness.
The most vicious, devious issue of SC is its’ global character. Nation may unilaterally waive SC in its’ domestic shipping, but waiving SC Regulation in international trade requires multinational response, at least on regional level.
It feels like some disaster movie coming live, with bunch of terrorists placing nuclear devices with timers in sleeping volcanoes, and hitting ON button. Everybody in industry understands that SC will have (already has) negative impact, but nobody knows how bad it will be. Explosion device can’t be deactivated, and if/when things come to worst, volcanoes can’t be extinguished by some sole move or action, it demands multinational response.

Voytenko Mikhail
October 2019

Author

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My name is Mikhail Voytenko, I’m Russian, professional merchant marine navigator, by education and former experience. I own and run Maritime Bulletin website for more than 10 years. I've been involved in solving a number of piracy hijack cases, including the hijack of ro-ro FAINA, loaded with tanks. It was me who made public, and unravel, freighter ARCTIC SEA mystery. I've been also closely involved in a number of maritime disaster, one of them being MSC FLAMINIA major fire.