A low sulphur surcharge and a carbon surcharge can both show up as a line item on an ocean freight invoice, and it is easy to assume they are the same charge billed twice. They are not. The IMO sulphur cap controls sulphur oxide (SOx) and particulate air pollution from marine fuel. It has nothing to do with carbon dioxide, and it predates the EU's carbon rules by years. This guide covers the sulphur rule on its own terms: the global 0.50% limit, the stricter 0.10% limit inside Emission Control Areas, the three ways a shipowner can comply, what a scrubber actually buys you (and where it does not), and a separate carbon rating, the Carbon Intensity Indicator, that happens to live in the same part of the regulation.
Two regimes, not one, and they get confused often
If a carrier's invoice already carries an emissions-related charge, it is worth knowing which rule it is paying for. The European Union's EU ETS and FuelEU Maritime rules price carbon dioxide and fuel greenhouse-gas intensity; both are regional EU measures that started applying to shipping from 2024 and 2025, and both are covered in our guide to EU ETS and FuelEU surcharges. The IMO sulphur cap is a different, older, global rule under the International Convention for the Prevention of Pollution from Ships (MARPOL), Annex VI, regulation 14. It governs SOx and particulate matter, not CO2, and it has applied worldwide since 1 January 2020, four years before the EU's carbon rules existed. A shipper tracking its own carbon footprint separately should see our guide to freight emissions reporting in 2026; that reporting obligation has nothing to do with the sulphur content of the fuel a vessel burns.
The global cap: 0.50% m/m, in force since 1 January 2020
Under MARPOL Annex VI regulation 14, ships operating outside a designated Emission Control Area must burn fuel oil with a sulphur content of no more than 0.50% mass by mass (m/m), down from the previous global limit of 3.50% m/m, as confirmed on the International Maritime Organization's own Sulphur 2020 page. The change took effect on 1 January 2020 and is widely referred to in shipping as "IMO 2020." It applies to every ship in international trade everywhere in the world except inside an Emission Control Area, where a tighter limit had already applied for years.
Emission Control Areas: the stricter 0.10% limit
Inside a designated Emission Control Area (also called a SOx Emission Control Area, or SECA), the limit has been tighter for longer: 0.10% m/m since 1 January 2015, down from a prior 1.00% limit. As of October 2026, five areas carry that 0.10% limit:
| Emission Control Area | 0.10% sulphur limit in force since |
|---|---|
| Baltic Sea | 1 January 2015 |
| North Sea | 1 January 2015 |
| North American (US and Canadian coastal waters) | 1 January 2015 |
| US Caribbean Sea (Puerto Rico, US Virgin Islands) | 1 January 2015 |
| Mediterranean Sea | 1 May 2025 |
The Mediterranean Sea is the newest of the five, and it is a good example of why implementation dates need checking rather than assuming. IMO's Marine Environment Protection Committee adopted the designation in December 2022, but the 0.10% limit only actually took effect on 1 May 2025, which IMO's own site confirms was a real, in-force milestone rather than a date still pending. More areas are moving through the same pipeline: the Canadian Arctic and the Norwegian Sea were designated in 2024 for phased implementation through 2027, and a North-East Atlantic area was approved in April 2025. None of this is final in the sense that it stops expanding, so check IMO's current Annex VI pages before fixing a route plan on a specific ECA boundary.
Three ways to comply, and what each one actually costs
A shipowner has three real options, and each carries a different cost shape:
| Option | What it is | The real tradeoff |
|---|---|---|
| Low sulphur fuel oil | Burn compliant VLSFO or marine gas oil everywhere | No capex, but a higher per-tonne fuel cost than heavy fuel oil, with price volatility passed through on BAF and LSS lines |
| LNG or another alternative fuel | Run on a fuel that is inherently low in, or free of, sulphur | Large newbuild or retrofit capex, and still a small share of the global fleet |
| Scrubber plus continued heavy fuel oil | Install an exhaust gas cleaning system and keep burning cheaper HFO | Scrubber capex, plus open-loop washwater discharge is banned in a growing list of ports and territorial waters |
The scrubber catch most shippers never hear about
A scrubber (an exhaust gas cleaning system) washes SOx out of exhaust gas so a ship can keep burning cheaper heavy fuel oil and still meet the sulphur limit at the funnel. Open-loop scrubbers do this by discharging the washwater, now carrying the scrubbed-out sulphur compounds, straight back into the sea. That discharge is exactly what a growing number of ports and coastal states will not allow. Singapore's Maritime and Port Authority requires vessels to switch to compliant fuel, or to closed-loop mode, before entering its port waters, among the circulars it has issued specifically covering scrubber residue disposal. Fujairah, one of the world's largest bunkering ports, imposed a comparable ban on open-loop discharge in its own waters via a Notice to Mariners, and a P&I club's own tracking of the issue lists China and Belgium among other jurisdictions restricting open-loop discharge in parts of their waters too. The practical result: a scrubber-fitted ship is not exempt everywhere it sails. On a leg that bans open-loop discharge, it either runs the scrubber in closed-loop mode, storing the residue for onshore disposal where that capability exists, or switches to compliant fuel anyway, which erodes the saving the scrubber was bought to deliver.
What this looks like on your invoice
Most of what shippers actually see is a Low Sulphur Surcharge (LSS), a line item recovering the extra cost of compliant fuel. Our guide to BAF, CAF, PSS and freight surcharges covers LSS alongside every other recurring fee on an ocean invoice, and flags the thing worth asking about directly: LSS is increasingly folded into the Bunker Adjustment Factor (BAF) rather than billed separately, so if you see both named on the same invoice, ask whether they overlap. Whether an ECA transit specifically adds cost on top of that depends on fuel-switching timing rather than being automatic. A vessel that already burns compliant fuel for the whole voyage, common since 2020 made 0.50% fuel the default outside ECAs too, sees a smaller step change entering an ECA than one running on HFO behind a scrubber, which has to decide, leg by leg, whether to keep scrubbing or switch fuel. Ask your forwarder which situation applies to your route rather than assuming either way.
The Carbon Intensity Indicator: a different rating, worth knowing anyway
One more rating lives in the same part of the rulebook and gets confused with the sulphur rule often enough to flag here directly: the Carbon Intensity Indicator (CII), under MARPOL Annex VI, Chapter 4, mandatory since 1 January 2023 for cargo ships, RoPax and cruise vessels above 5,000 gross tonnage. CII has nothing to do with sulphur. It rates a ship's operational carbon efficiency, grams of CO2 per unit of transport work, on an A to E scale, comparing the ship's actual "attained" CII for the year against a "required" CII that tightens relative to a 2019 baseline, as Lloyd's Register's own statutory compliance guidance explains. A ship rated D for three consecutive years, or E even once, must submit a corrective action plan under Annex VI regulation 28, approved by its flag administration or a recognised organisation, setting out how it will get back to C or above. CII sits firmly on the carbon side of the ledger rather than the SOx side this guide is mostly about; it earns a mention here only because the same classification societies and the same Annex VI chapter structure cover both, and a forwarder fluent in one is usually fluent in the other.
What to do next
- Ask how the LSS on your invoice is calculated, and whether it already overlaps with BAF.
- If your routing passes through an ECA, ask whether the vessel is switching fuel or scrubbing, since that decides whether the transit adds a real cost or not.
- If a quote involves a scrubber-fitted vessel, ask whether its ports of call allow open-loop discharge; a growing number do not.
- Check ECA boundaries against IMO's current Annex VI pages before fixing a route plan, since the list keeps expanding.
A forwarder who can walk you through exactly which of these charges applies to your route, and why, is worth finding before you commit to a quote. Search self-published listings by country and service in the CargoLinked directory, or post your shipment and let forwarders quote with their own routing and fuel choices already factored in.
Emission Control Area boundaries, sulphur limits and CII thresholds are all set and updated by the IMO over time. Confirm current boundaries and dates directly against IMO's own MARPOL Annex VI pages, or with a classification society, before relying on any date in this guide.
