The global shipping industry carries around 90% of world trade volume and is also one of the major contributors to sulfur emissions.
To reduce air pollution and protect human health as well as marine ecosystems, the International Maritime Organization (IMO) introduced a landmark environmental regulation known as IMO 2020.
This policy not only marks a major milestone in maritime environmental regulation but also transforms the marine energy landscape by accelerating the shift toward low-sulfur fuels.
So, is Liquefied Natural Gas (LNG) truly the answer to this regulatory challenge? Let’s find out.
What Is IMO 2020?
IMO 2020 is a global regulation issued by the International Maritime Organization (IMO) aimed at reducing air pollution from ships, particularly sulfur oxide (SOₓ) emissions produced from burning marine fuel oil.
The IMO, a United Nations (UN) agency, is responsible for ensuring maritime safety and managing environmental impacts from international shipping.
Starting January 1, 2020, the maximum sulfur content in ship fuel was reduced from 3.50% to 0.50% (by mass), as stipulated in MARPOL Annex VI, Regulation 14.
This rule applies to all ships operating in international waters outside Emission Control Areas (ECAs), specific regions where an even stricter limit of 0.10% sulfur applies.
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What Is the Main Purpose of IMO 2020?
The primary goal of IMO 2020 is to reduce sulfur oxide (SOₓ) emissions from marine fuel. These gases are among the main causes of acid rain and fine particulate matter (PM2.5) formation, which pose serious risks to heart and lung health.
By enforcing the 0.50% sulfur limit from January 1, 2020, global SOₓ emissions are projected to drop by up to 77%, equivalent to about 8.5 million metric tons per year.
The benefits go beyond environmental protection. This policy is estimated to prevent hundreds of thousands of premature deaths each year, particularly in coastal regions with heavy shipping activity.
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How Does IMO 2020 Affect the Industry?
Compliance with IMO 2020 inevitably requires companies to make operational adjustments and new investments.
For Shipping Companies
To comply with the new sulfur limits, shipping companies have several technical options. The most common is switching to low-sulfur fuel oil (LSFO), which contains about 0.5% sulfur.
While this option is straightforward, it significantly raises operational costs since LSFO prices are typically 20–50% higher than high-sulfur fuel oil (HSFO) previously used.
Another alternative is installing exhaust gas cleaning systems (scrubbers). These allow ships to continue using high-sulfur fuel while removing sulfur from exhaust gases before they are released into the atmosphere.
Although scrubbers can offer long-term economic benefits, installation costs are substantial, ranging from US$2 million to US$5 million per vessel.
For the Energy Industry
The enforcement of the 0.5% sulfur cap triggered a surge in demand for Very Low Sulfur Fuel Oil (VLSFO) and Marine Gas Oil (MGO).
Refineries equipped with advanced desulfurization and hydrocracking technologies have benefited most from this transition, as they can efficiently produce compliant fuels.
This major shift also reshaped global trade patterns among oil producers, energy traders, and major ports, now serving as central distribution hubs for low-sulfur marine fuels.
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Is LNG the Solution to IMO 2020?
Yes. Liquefied Natural Gas (LNG) is one of the most effective solutions for meeting IMO 2020 requirements while offering long-term environmental advantages for the shipping industry.
LNG contains virtually zero sulfur, far below the 0.5% m/m sulfur cap set by the IMO. As a result, LNG-fueled ships can fully comply with IMO 2020 without the need for costly scrubber systems or the risk of generating additional waste.
Furthermore, LNG reduces nitrogen oxide (NOₓ) emissions by up to 90% and nearly eliminates particulate matter (PM), making it an ideal fuel for operations within Emission Control Areas (ECAs) that impose even stricter emission limits.
The implementation of IMO 2020 marks a turning point for global shipping, driving the adoption of low-emission fuels such as LNG.
While it still emits CO₂ and faces challenges like methane slip, LNG remains the leading transition fuel toward a cleaner and more sustainable maritime future.
References:
- International Maritime Organization. Accessed 2025. IMO 2020 – Cleaner Shipping for Cleaner Air
- Xeneta. Accessed 2025. IMO 2020: Scrubbers vs. LSFO
- Tandfonline. Accessed 2025. An Analysis of Available Solutions for Commercial Vessels to Comply with IMO Strategy on Low Sulphur
- The ICCT. Accessed 2025. The Climate Implications of Using LNG as a Marine Fuel
- Econnect Energy. Accessed 2025. How Do IMO 2020 Regulations Impact the LNG Market?
