RIM Market News >  Asian Viewpoints

Indonesia to exempt domestic vessels from IMO’s tightening of sulfur regulations from 2020

2019/08/23 12:00

Regarding the International Maritime Organization (IMO)’s tightening of regulations for sulfur content in bunker oil from 2020, the Indonesian government announced in July that it would not force domestic vessels registered in Indonesia to obey the new regulation. IMO will lower the limit for sulfur content in bunker oil that is used in general sea areas from 3.5% to 0.5% from January 2020. It is extremely rare that members of IMO announce that they will not force compliance of the tighter regulations although only domestic vessels will be exempted in this case. Indonesia is a category C member of IMO. The Indonesian government explained that it made this decision based on national interest as an increase in fuel prices and distribution costs will make commodity prices higher and this will burden the lives of citizens. There are 18,000 islands of various sizes in Indonesia and marine transportation by domestic vessels is a main way of distribution. There are said to be about 9,000 domestic vessels in Indonesia. At refineries in Indonesia, it is undecided how to treat high sulfur fuel oil when it is no longer needed and refineries are not ready to increase production of low sulfur fuel oil. Therefore, it is very difficult to procure bunker oil with low sulfur content within the country. The Indonesian government has been trying to reduce imports of oil products from last year to improve the balance of international payments. It decided to focus on supply of crude oil and oil products produced in the country to the domestic market. It is against the financial policy of the government to import fuel oil with low sulfur content that is relatively expensive.

IMO’s regulations are applied in waters inside and outside of member countries. Each member can punish vessels that do not obey the regulations at its own discretion but it is the duty of members to make vessels comply with the regulations. People who are involved in maritime affairs are highly interested in how IMO will react to Indonesia going forward.

Singapore : Energy Desk  Satoshi Hagimoto  +65-6345-9894
Copyright©2019 RIM Intelligence Co. ALL RIGHTS RESERVED.
facebook      twitter

About SSL?