10th October 2019

REVISION – IMO 2020: Implementation of Bunker-related surcharge and change of BAF

reference fuel

Dear Valued Customers,

From 1 January 2020, the new IMO (International Maritime Organisation) 2020 Low Sulphur Regulation
will be in effect – all sea-going vessels worldwide will have to comply and reduce their Sulphur emissions
by 85%.

To comply with the Regulation, Sulphur in fuel oil must be reduced from 3.50% to 0.50% to decrease the
amount of sulphur oxide emissions. It should have major health and environmental benefits globally,
including improving air quality and reducing risks of acidification of the oceans.

CNC, as part of the CMA CGM Group, will be compliant using advanced air quality systems onboard our
vessels, and as the main solution, using compliant fuels with 0.50% or 0.10% sulphur.

The new IMO 2020 Low Sulphur Regulation impacts the global shipping industry and shipping costs are
set to increase worldwide. As the cost of the Very Low Sulphur Fuel Oil (VLSFO) is expected to be
significantly higher than the present High Sulphur Fuel Oil (HSFO), CNC will implement a new price
reference for its short-term and long-term contracts.

• For short-term contracts up to 3 months’ validity, please be informed that a monthly bunker-
related surcharge* will be applied on top of CNC’s ocean freight charges, effective 1 st
November 2019.

• For long-term contracts of more than 3 months’ validity, please be advised that VLSFO
will replace HSFO as the price reference for the quarterly Bunker Adjustment Factor (BAF),
effective 1 January 2020. The BAF is applied on top of the ocean freight charges and will still be
revised on a quarterly basis with a one-month notice.

For more information, please contact your local CNC representatives.

Thank you for your business and continued support.

Sincerely,

CNC

*Denomination of the applicable surcharge may vary according to local regulation.

Should you require any clarifications, please feel free to contact your local CNC representative.

Low Sulphur IMO 2020 Regulation