Bunker Adjustment Factor (MGO BAF)

MGO BAF rules

On 1 January 2015, the EU Sulphur Directive 2012/33/EU brought about a major reduction in sulphur dioxide emission from ships, and that will heavily impact shipping in northern Europe. The Directive will require ships sailing in the English Channel, the North Sea and the Baltic Sea (the North European emission control area) to use bunker oil with a maximum 0.1% sulphur or apply alternative methods in order to achieve the same effect.

The MGO BAF levels are based on the average price of the MGO oil and the EUR/USD rate measured from the 20th of a given month to the 20th of the following month.

Due to continued volatility in global fuel markets - largely influenced by the evolving situation involving Iran and broader geopolitical tensions in the Middle East, including risks to operations in and around the Strait of Hormuz - our fuel-related operating costs are subject to change.

Bunker Adjustment Factor (BAF) surcharge is adjusted each month based on rates for MGO and USD/EUR the adjustment for April reflects the current energy situation effecting the price on marine fuels, thus leading to increased transport costs.