Tens of thousands of cargo ships, tankers, container ships and cruise liners belch noxious sulfuric gases and fine particles that drift over cities and cover them with smog.

It is not a pretty picture, but it is one that may change in January 2020 if a decision by the United Nations International Maritime Organization to strictly limit the amount of sulfur in maritime fuel is fully carried out.

That is a big if, because shippers have been slow either to make the switch to higher-quality fuels or install expensive equipment known as scrubbers to clean exhaust from what is known in the industry as “bunker fuel.” Oil companies are also watching and waiting, as few have upgraded their refineries to adapt to new regulations.

“It comes down to who is going to blink first,” said Neil Beveridge, an oil analyst at Sanford C. Bernstein, a research firm for investors. “So far, the shipping industry looks like it is sleepwalking into a disaster. Everyone is waiting for everyone else to make the first move.”

Methods of enforcement are also still an open question.

Billions of dollars in investments are potentially at stake, since the global demand for high-sulfur fuel amounts to more than three million barrels a day out of the 100-million-barrel-a-day market, according to industry experts.

Read more