New International Maritime Organization (IMO) Diesel Emission Standards is a Potential Positive Development for Capstone
04 September 2018 - 10:30PM
Capstone Turbine Corporation (www.capstoneturbine.com) (Nasdaq:
CPST), the world’s leading clean technology manufacturer of
microturbine energy systems announced today that the new
International Maritime Organization (IMO) emission standards could
become an additional growth catalyst for the microturbine
manufacturer.
On January 1, 2020, the International Maritime Organization
(IMO) will enforce new diesel emission standards designed to
significantly curb air pollution produced by the world's shipping
industry which has essentially received a “free pass” for many
years. An estimated 90% of the goods in this world are shipped
via ocean freight, and the industry is projected to grow 3% every
year creating an ever-increasing greenhouse gas problem.
Many industry experts think the much-anticipated shipping
revolution could spark a dramatic upswing in diesel fuel demand
over the coming months as the shipping industry is forced to switch
from heavy oil or high sulfur diesel to cleaner diesel which is
used in on-highway trucks. The heavy oil used by 80% of the world’s
cargo and container ships is more carbon-intensive than other fuels
and produces high greenhouse gases as well as air
pollutants such as sulfur dioxide, which causes acid rain.
“The new IMO emission standards could provide multiple
beneficial catalysts to our business as higher crude oil prices
drive increased exploration and production activities and drive our
natural resources market vertical which was 38% of our product
revenue last year. In addition, higher cost diesel fuel compared to
cheaper heavy oil should increase the use of compressed natural gas
(CNG) and liquefied natural gas (LNG) as fuel and spark additional
interest in electric and hybrid vessels which is positive for our
transportation vertical,” said Darren Jamison, Capstone’s President
and Chief Executive Officer.
This is all part of a broader global push towards cleaner energy
markets, and the IMO is set to ban shipping vessels using fuel with
a sulfur content higher than 0.5 percent, compared to levels of 3.5
percent at present. The most commonly used marine fuels are thought
to have a sulfur content of around 2.7 percent. When the new IMO
rules go into force approximately 15 months from now, industry
experts have concerns as the global shipping industry is widely
thought to be ill-prepared for the upcoming change in fuel
regulations.
Industry experts indicate that if crude oil prices decline
before the new 2020 IMO rule takes effect, it will minimize the
impact. However, if oil prices don’t decline or continue to
increase before 2020 the increased demand for cleaner diesel could
boost the demand for crude and send oil prices up to $90 to $100
per barrel after 2020.
“Increased oil prices in excess of $90 per barrel will lead to
more fuel switching in the over-the-road trucking industry with
fleets potentially looking at switching from diesel to LNG or CNG
trucks. Increased availability of LNG and CNG is generally positive
for Capstone. Lastly, increased oil prices and lower emission
standards should also push the development of hydrogen as a
fuel. Capstone is currently in development of a new
microturbine fuel injector for use with hydrogen in partnership
with the U.S. Department of Energy,” concluded Mr. Jamison.
About Capstone Turbine Corporation
Capstone Turbine Corporation (www.capstoneturbine.com) (Nasdaq:
CPST) is the world’s leading producer of low-emission microturbine
systems and was the first to market commercially viable
microturbine energy products. Capstone has shipped over 9,000
Capstone Microturbine systems to customers worldwide. These
award-winning systems have logged millions of documented runtime
operating hours. Capstone is a member of the U.S.
Environmental Protection Agency’s Combined Heat and Power
Partnership, which is committed to improving the efficiency of the
nation’s energy infrastructure and reducing emissions of pollutants
and greenhouse gases. A DQS-Certified ISO 9001:2015 and ISO
14001:2015 certified company, Capstone is headquartered in
the Los Angeles area with sales and/or service centers in
the United States, Latin America, Europe, Middle East and
Asia.
For more information about the company, please visit
www.capstoneturbine.com. Follow Capstone Turbine on Twitter,
LinkedIn and YouTube.
Forward-Looking Statements
This press release contains “forward-looking statements,” as
that term is used in the federal securities laws. Forward-looking
statements may be identified by words such as “expects,” “believe,”
“objective,” “intend,” “targeted,” “plan” and similar phrases.
These forward-looking statements are subject to numerous
assumptions, risks, and uncertainties described in Capstone's
filings with the Securities and Exchange Commission that may cause
Capstone’s actual results to be materially different from any
future results expressed or implied in such statements. Capstone
cautions readers not to place undue reliance on these
forward-looking statements, which speak only as of the date of this
release. Capstone undertakes no obligation, and specifically
disclaims any obligation, to release any revisions to any
forward-looking statements to reflect events or circumstances after
the date of this release or to reflect the occurrence of
unanticipated events.
“Capstone” and “Capstone Microturbine” are registered trademarks
of Capstone Turbine Corporation. All other trademarks
mentioned are the property of their respective owners.
CONTACT: Capstone Turbine CorporationInvestor
and investment media
inquiries:818-407-3628ir@capstoneturbine.com
Integra Investor RelationsShawn M.
Severson415-226-7747cpst@integra-ir.com
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