When can a bunker fuel be said to meet
a specific sulphur limit? Unfortunately,
the answer to this fundamental question
is not straightforward. There is a misalignment between the sulphur verification procedure prescribed by the International Maritime Organization (IMO) and the one applied
in commercial contracts throughout the
marine fuel industry. This has been creating confusion and distress for bunker fuel buyers and sellers for years, resulting in friction and frequent disputes.
There are some challenging unresolved issues remaining for MEPC to decide on, but we have a pretty good idea of what is coming following deliberations in February at the IMO’s Sub-Committee on Pollution Prevention and Response (PPR 6). Let’s look at what we can expect.Consistent implementation guidelines. A big part of the IMO’s 2020 package are the Guidelines on consistent implementation of the 0.50% sulphur limit under MARPOL Annex VI. These guidelines include preparatory elements which were already finalised at MEPC 73 in October last year; namely the Ship implementation plan (SIP) along with an appendix on tank cleaning (based on a submission from IBIA), and an appendix addressing the impact on machinery systems with advice on how to prepare for use of a variety of fuels (which IBIA also contributed to). Planning for, and even the execution of, these preparatory steps should be well underway by now.
There’s more advice coming, including definitions to help to clarify the language to describe various types of fuels, a section on handling various types of compliant fuels, and a list of fuel quality parameters that have been identified as a potential cause for concern. These include stability, compatibility, cold flow properties, acid number, flash point, ignition and combustion quality, cat fines, low viscosity, and unusual components. There is an appendix that sets out more information on each of these.
Apart from the practical advice for ship operators to help them operate safely with various types of fuel, there is a huge body of guidelines relating to various aspects of enforcement, and how to deal with non-availability.
FONARs, loopholes and left-overs PPR 6 agreed on a standard Fuel Oil Non-Availability Report (FONAR) format for situations where, despite best efforts, the ship could not obtain compliant fuel oil. The FONAR requires a ship to provide detailed documentation to prove why it has, knowingly, taken onboard fuel oil exceeding the relevant MARPOL Annex VI sulphur limits (0.10% or 0.50%). The ship must document that it has made every effort to obtain compliant fuel oil.
It can also claim that operational constraints and concerns about the quality of the compliant fuel oil available caused it to take an alternative, non-compliant fuel. This quality clause has been called a “loophole” by some, however, it is important to note that any such concerns would have to be thoroughly documented and a ship would also be expected to specify steps to resolve its operational constraints. In fact, looking at the wording in the FONAR, it is difficult to imagine a scenario when a ship might be able to defend using a non-compliant high sulphur fuel oil in lieu of a compliant marine distillate or fuel oil blend due to operational constraints, unless it can convincingly document that the available compliant fuel(s) would be unsafe to use.
Moreover, the idea that a FONAR is some kind of “get out of jail free” card is misconceived. It is a mechanism for the ship to self-report non-compliance. Port State control (PSC) is expected to take a FONAR into account as a mitigating circumstance and may refrain from penalising the ship; however, the ship will still have a deficiency as it is still non-compliant.
Guidelines have also been developed for how FONARs should be investigated by authorities, but PPR 6 could not find a resolution regarding how to deal with any bunkers exceeding the 0.50% sulphur limit remaining on board a ship once the carriage ban takes effect. Many member states insist it must be debunkered at the first port of call; however in reality this may not always be possible. IBIA has co-sponsored a proposal by Australia calling for a pragmatic approach during 2020. If a ship has non-compliant fuel left over after a FONAR situation, we propose that if remaining non-compliant fuel oil cannot be debunkered at the ship’s next available en route port, the relevant administrations (flag and port State) may allow the ship to use it on the high seas while en route
This would only be as a last resort, and only be applicable for the first 6 to 12 months of the global cap as a contingency measure during a period when we may not have full global availability of compliant fuels. We anticipate headwinds for this proposal, but IBIA believes there are plenty of deterrents to prevent ships from using this as a loophole, such as the fact it still has a deficiency and faces both administrative and practical burdens as a result of lifting non-compliant fuel, including the prospect of extra tank cleaning to flush out leftover non-compliant fuel. Work also remains with regards to how to reflect FONARs on the IMO’s Global Integrated Shipping Information System (GISIS), where improvements can be made, including efforts to verify the information submitted.
Another area MEPC 74 needs to clarify is how to deal with the situation where a ship has a bunker delivery note (BDN) that says the fuel is compliant, but the ship’s own test programme results suggest it is not. This is not covered by the FONAR because the ship thought it had procured compliant fuel oil, but now has an indication it may not be. At present, such cases are typically recorded as a ‘note of protest’ from the ship against the supplier and such NOPs are frequently reported by the ship’s flag state to the relevant GISIS module.
Enforcement & controls on ships
There are three parts to the IMO’s framework being prepared to ensure ships comply with the 2020 sulphur limit: draft amendments to the regulation itself (MARPOL Annex VI), the draft Guidelines on consistent implementation of the 0.50% sulphur limit under MARPOL Annex VI, and draft 2019 Guidelines for port State control under MARPOL Annex VI, updating the 2009 guidelines. All these drafts are due to be approved at MEPC 74, which would complete the non-mandatory guidelines, while the draft regulatory amendments need to be formally adopted at the next MEPC and hence are not expected to enter into force until mid-2021.
The amendments to MARPOL Annex VI include a new requirement for ships to have sampling point(s) fitted or designated for the purpose of taking representative sample(s) of the fuel oil being used on board (in-use samples), unless the ship has a low-flashpoint fuel system. All new ships must have them, while they will be phased in for existing ships linked to their first renewal survey after entry into force of the regulation. Appendix VI, which describes how to verify fuel oil sulphur content and currently applies only to the MARPOL sample taken during delivery ship, will be amended to also cover in-use samples and so-called onboard samples. The latter refers to fuel oil intended to be used or carried for use on board ship, and is intended to facilitate control of the carriage ban set to take effect on 1 March, 2020, which prohibits ships (unless they have approved abatement technology) from carrying any fuel oil exceeding 0.50% sulphur in their fuel tanks.
The consistent implementation guidelines, meanwhile, provide details on how administrations should undertake ship inspections, including when to target ships for closer inspection based on document checks or results from remote sensing or portable devices indicating a breach of sulphur limits.
Importantly, the guidelines include
a paragraph saying that final analysis should be carried out in accordance with ISO 8754: 2003 by a laboratory that is accredited for the purpose of conducting the test in accordance with ISO/IEC 17025 or an equivalent standard, and that test results should reported in accordance with ISO 8754 protocol, meaning a tested value at or above 0.10% sulphur should be reported with no more than two decimal places.
Moreover, it specifies that while the verification procedure for MARPOL delivered samples should be in accordance with appendix VI of MARPOL Annex VI, for other samples taken on board the ship, the in-use and onboard sample, the sample should be deemed to meet the requirements provided the test result from the laboratory does not exceed the specification limit +0.59R, also known as the 95% confidence limit. IBIA has campaigned at the IMO for both of these aspects to be included to ensure consistency in how ships are treated. We also want to ensure that in-use and onboard ship samples are not treated in accordance with the current appendix VI, which does not fully recognize the 95% confidence margin principle and hence carries a risk that a fuel that is actually compliant is deemed non-compliant due to inherent variations in test precision.
If a non-compliance is established, the guidelines advice that the port State may prevent the ship from sailing until it takes any suitable measures to achieve compliance. In addition, it calls for the port State to report the relevant non-compliance information to the ship’s flag Administration, the authorities where non-compliant fuel was supplied, and for deficiencies to be report to the MARPOL Annex VI GISIS module.
A key part of the framework is the draft 2019 Guidelines for port State control under MARPOL Annex VI, updating the 2009 guidelines. As the title suggests, these provide a full set of details for initial ship inspections, grounds for closer inspections, and detainable deficiencies. There are some concerns here, including scenarios described above regarding how to deal with non-compliant fuel oil remaining onboard a ship after using a FONAR, and the situation when a ship has BDN that says the fuel is compliant, but the ship’s own test results suggest it is not. IBIA is also concerned about the PSC guidelines indicating that all sample analysis should be done in accordance with appendix VI of MARPOL Annex VI. That will contravene the 95% confidence principle agreed for in-use and onboard samples in the guidelines for consistent implementation until amendments to appendix VI covering such samples enter into force in mid-2021.
A full review of the 2015 Guidelines on Exhaust Gas Cleaning Systems (EGCS) needs more time, however, elements relating to malfunction of the EGCS system or a monitoring instrument have been sent for approval by MEPC 74 in May. The message is quite simple: if the ship is unable to fix the malfunction or accidental breakdown within an hour, it should switch to compliant fuel. If the ship doesn’t have sufficient compliant fuel onboard to cover the system downtime and has to use high sulphur fuel, it will go on record as a non-compliance.
MEPC 74 will also discuss proposals about how to assess and address the potential environmental impact of scrubber discharges to water, which is not expected to be quite so simple.
More control of bunker suppliers
Measures to improve control of the quality of fuel oil provided by bunker suppliers has been discussed at the IMO for years, and now there are some instructions for member States on what can be done as part of IMO guidelines to encourage consistent implementation of the 0.50% sulphur limit.
First of all, designated authorities should take samples and test fuel oils from bunker barges or shore bunker terminals, but avoiding unduly delaying the operation, movement or departure of ships.
There is no specific requirement for how frequent such sampling should take place; that is left to the discretion of relevant authorities. Secondly, authorities should take appropriate corrective measures against bunker suppliers found to have issued incorrect BDNs and/or non-compliant fuels. Confirmed non-compliance should be reported to the MARPOL Annex VI GISIS module. PPR 6 also developed a joint MSC-MEPC circular addressing the delivery of compliant fuel oil by suppliers, for approval at MEPC 74 in May and at the Maritime Safety Committee (MSC 101) in June. The draft circular is aimed at Members States to take appropriate action against suppliers under their jurisdiction to ensure they deliver compliant fuel oil. They are also told to urge fuel oil suppliers to take into account Guidance developed by the IMO on best practice for fuel oil suppliers and fuel oil purchasers/users for assuring the quality of fuel oil delivered to and used ships.
A group of shipping organisations have submitted a proposal for a bunker supplier licencing scheme for discussion at MEPC 74. IBIA is in principle supportive of licensing schemes as it helps promote a level playing field for suppliers that adhere to best practices. However, for a supplier licencing scheme to be made mandatory by the IMO, it would need to be limited in scope to issues pertaining to IMO regulations in order not to go beyond the scope of member states’ obligations. This may include measures to ensure suppliers to adhere to MARPOL Annex VI requirements regarding fuel quality (Regulation 14 and 18.3) and SOLAS, and that they provide the correct documentation and representative samples as required by IMO regulations.
Success up to industry and member states
IMO has worked relentlessly to address the concerns surrounding the 2020 sulphur limit by offering guidance on every aspect it possibly can, from helping ships prepare to deal safely with compliant fuels and ensuring that control mechanisms are in place to deter non-compliance which would counteract a level playing field. Now, it is up to industry and member States to make it happen.
Only Annex VI signatory countries, numbering 93 at the time of writing, covering close to 97% of global tonnage and about half of all the world’s coastal states, can enforce the regulations. Only around 30 countries have experience in sulphur limit enforcement so far, namely those with emission control areas (ECAs) designated by the IMO or locally/regionally/nationally designated sulphur limits. For the rest of the world, it remains to be seen how they will enforce, though some, like Singapore, are already sending signals that they will take a firm stance.
The success of the 2020 sulphur regulation rests primarily with the industry. The supply side needs to bring compliant, fit for purpose products to the market before then end of 2019 and operators need to clean out their fuel systems and buy compliant fuels before the end of 2019 in order to be compliant on 1 January, 2020. IBIA, along with other industry bodies, is working hard to provide the information and support the industry needs to succeed.