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IMO terreace with flags

IMO makes progress on 2020 preparations

Speculation that there may be a delay in implementing the 0.50% sulphur limit has once again been rebuffed, but safety concerns persist. Unni Einemo reports on outcomes from MEPC 73 and MSC 100

Renewed doubts about the timely implementation of the 2020 sulphur limit, sown by media reports ahead of the 73rd session of the IMO’s Marine Environment Protection Committee (MEPC 73), have hopefully been put to bed. Speculation was rife that a proposal from a group of large flag states and shipping organisations, suggesting an experience building phase (EBP) due to concerns about the safety of low-sulphur fuels,

Moreover, MEPC 73 discussed a proposal from Bangladesh calling for a delay to implementing a ban on the carriage of bunkers above 0.50% sulphur (unless ships have approved abatement technology), citing concerns about the availability, safety and cost of compliant fuels. It said the ban should not be adopted “until the economic availability and sufficient supply of low sulphur fuel oil is ensured” with a particular emphasis on the damaging effect of the expected cost increase. Several developing countries supported the proposal from Bangladesh, but a clear majority of countries wanted the carriage ban to go ahead without delay. It was adopted and will take effect from 1 March, 2020.

 

IBIA made a statement to MEPC 73 during discussion of the proposal, saying; “We sympathise with the fears of developing countries, the least developed countries and small island developing states that higher transport cost may have a negative impact on their economies. However, the paper from Bangladesh seems to suggest that delaying the high sulphur fuel oil carriage ban equals a delay to the implementation of the 2020 sulphur limit. This is not the case. It is simply a tool facilitate enforcement of the global sulphur limit more effectively. It is feared that without effective enforcement, the temptation to cheat will be enormous, putting those that do comply at a huge commercial disadvantage.”

 

Bangladesh was not alone in entertaining the misconception that the global sulphur limit won’t take effect until the carriage ban is in force; it’s an idea that has been heard in several quarters. IBIA has explained at every opportunity – in articles and at conferences – the sulphur limit will take effect on 1 January 2020. There will be no delay.

 

IBIA also told MEPC 73: “Industry planning and preparations are already well underway with substantial investments being made both in the refinery sector and among shipowners to meet the 2020 deadline. If we move the target now, those preparations will be thrown into disarray. We do understand fears that there could be insufficient availability of good quality compliant fuels. However, ships that encounter genuine non-availability situations should be able to use the standardised fuel oil non-availability report to be developed by IMO in line with Regulation 18.2 of MARPOL Annex VI to prove that they were unable to obtain compliant fuel.”

 

The standardised fuel oil non-availability report has yet to be agreed and will be up for discussion at the 6th session of the IMO’s Sub-Committee on Pollution Prevention and Response (PPR 6) in February 2019, along with other aspects of 2020 implementation guidelines that have yet to be agreed, such as sulphur verification issues and control mechanisms. MEPC 73 did, however, complete guidelines on preparatory steps for ship operators and best practice guidance for bunker suppliers, both of which IBIA contributed to.

ENVIRONMENT

Ship Implementation Plan
Guidance on ship implementation planning approved by MEPC 73 will assist ship owners in preparing for the use low sulphur fuels to comply with the 2020 sulphur limit. The ship implementation plan (SIP), which is not mandatory, can help ship owners/operators plan and demonstrate the steps taken to prepare individual ships
for compliance by 1 January 2020. Elements covered include a risk assessment and mitigation plan regarding the impact of new fuels; fuel oil system modifications and tank cleaning (if needed); fuel oil capacity and segregation capability; and bunkering plans in the lead-up to the compliance date, plus how the switch can be documented.

 

IBIA contributed to the practical advice contained in two appendices to the SIP regarding impact on machinery systems and tank cleaning. The appendix addressing the impact on machinery systems contains advice on how to prepare for use of distillates, fuel oil blends, or both. “Ships that are equipped to deal with a multitude of fuel types, by having multiple segregated tanks and the ability to heat or not heat fuels in each tank, will be in the best position to deal with the market reality in 2020. It is therefore prudent to inform owners that even distillates may need heating during operations in cold climates and hence tank heating capacity should be retained,” IBIA told MEPC 73.

 

The second appendix to the SIP on tank cleaning is a shortened version of an IBIA document submitted to the IMO. IBIA’s document highlighted the safety and compliance risks associated with the option of simply “flushing through” fuel systems for ships that have used high viscosity high sulphur fuel oil (HSFO), as remaining HSFO residues sticking to various surfaces would dissolve/dislodge and could cause problems with excessive sludge and contaminate compliant fuel making it exceed the sulphur limit.

 

However, some shipping organisations felt that the appendix needed to mention that just flushing through HSFO fuel systems (i.e. not cleaning tanks first) until they are sufficiently clean is also an option.
Options described in detail in IBIA’s document include manual cleaning of tanks during dry docking, manual cleaning during service, and cleaning tanks in service with specialised additives.

 

Supplier best practice
MEPC 73 approved the IMO’s “Guidance on best practice for fuel oil suppliers for assuring the quality of fuel oil delivered to ships”. It was largely based on IBIA’s best practice for fuel oil suppliers provided to MEPC 72. A group of co-sponsors; representing both the shipping industry and the fuel oil supply industry, cooperated on primarily editorial changes of IBIA’s original document in a bid to produce guidance that would be acceptable to all parties and aligned with other IMO guidance. The co-sponsors were IBIA, ICS, INTERTANKO and IPIECA. The Best Practice focuses on quality control for oil-based bunker fuels during production, in the supply chain and during transport, storage and transfer. It includes recommendations for sampling and testing to be conducted and documented at each point of product custody transfer throughout the supply chain. Records of custody transfer of cargoes, certificates of quality, sample seal numbers and quality analysis reports should be documented.

 

IBIA is proud to have assisted in the process allowing for the IMO guidance document to be finalised in just two MEPC sessions. Combined with the best practice guidance for buyers/purchasers approved at MEPC 72, and the draft best practice for Member States/coastal States, all aspects of quality control will be addressed. Hopefully this will help all stakeholders in ensuring better understanding of what it takes to ensure that ships are provided with bunker fuels that meet their regulatory and operational requirements.

 

Work on the Guidance on Best practice for Member States/coastal States did not progress during MEPC 73 as it was felt that the draft had too many areas without consensus or a satisfactory conclusion. MEPC 73 agreed to re-establish the Correspondence Group on Fuel Oil Quality to continue working on it and submit a draft for finalisation and approval at MEPC 74.

Quality discussion continued at MSC
The proposal for an experience building phase (EBP) received substantial support at MEPC 73, especially from the countries that had also supported the proposal to delay the effective date of the carriage ban. The proposal said the EBP should include “a systematic and evidence-based process for reviewing and possibly improving” the regulatory framework under MARPOL Annex VI.

 

However, the prevailing view was that talk of an EBP resulting in a potential review of MARPOL Annex VI would send the wrong signal and cause uncertainty about the 2020 sulphur limit implementation. The open-ended suggestion that the EBP might lead to future regulatory amendments was seen as particularly worrisome as parallels would inevitably be drawn to the EPB and the implementation delay associated with the Ballast Water Management Convention. But it was clear that fears regarding the safety of using compliant fuels are not going away. The question is what the IMO can actually do about it in a way that doesn’t undermine efforts to ensure compliance with the 2020 sulphur limit.

 

In summary, it was agreed to invite more refined proposals to MEPC 74 with the scope restricted to enhancing the implementation of Regulation 18 of MARPOL Annex VI with regards to reporting issues around fuel oil quality and non-availability, including proposals for ways to enhance the IMO’s reporting system, GISIS, for data collection and analysis.

 

Meanwhile, IBIA was also a co-sponsor of MEPC 73/5/17, advising the Committee about the progress made on an initiative to develop industry guidance as part of a multi-stakeholder exercise to address the safety issues associated with new low sulphur fuel blends or fuel types.Two expert groups of representatives from 16 organisations across the shipping industry, the refining industry, bunker suppliers, standards organisations and other interested parties have been established and the drafting of the cross industry guidance is underway. A key objective of this initiative,
set in motion by IPIECA and OCIMF, is to create a unified industry guidance that helps mitigate any safety and operational issues that may arise. The first draft is expected to be discussed at PPR 6.

 

Fuel safety issues were also addressed at the 100th session the Maritime Safety Committee (MSC 100) in the first week of December, where it was agreed that fuel safety matters should be addressed by MSC separately and independently from MARPOL Annex VI. It will be added as a new work item to the agenda at MSC 101 with the title “Development of further measures to enhance the safety of ships relating to the use of fuel oil”. Concrete proposals were invited to MSC 101.

 

There will still be overlap between MEPC and MSC on the subject of how to enhance the IMO’s GISIS reporting system to achieve a better overview of fuel safety related reports. IBIA made the point during MSC 100 that the information submitted also needs to be vetted because at present, some of the information on GISIS is questionable.

States urged to report availability of compliant fuels
States that are parties to MARPOL Annex VI are supposed to inform the IMO of the availability of compliant fuel oils in their ports using a dedicate GISIS module. Liberia put a proposal to MEPC 73 to “issue a resolution urging States to report the availability of compliant fuel oil well in advance of 1 January 2020 to enable shipowners and operators to gain experience on the carriage and use of the new fuels on their ships and with proposed ship implementation plans” to enhance a smooth and effective transition to the new regulatory requirements. The proposal was generally supported at MEPC 73, which is hardly surprising. Of course it would be a good thing if information about availability of compliant fuels was widely available to help ship operators plan and prepare for the new sulphur limit.

 

However, to achieve this, member states would really have to up their game as the GISIS module, at the time of writing, indicated that only three countries have availability of fuels that comply with MARPOL Annex VI and there is no indication as to when availability data was submitted which makes it hard to tell if the information is current.

 

Apart from the need for member States to actually report availability, there are some commercial realities which make it challenging to do this effectively as well. First of all, it will be difficult for authorities to give assurance about availability on some future date, because until there is demand for fuel to comply with the 0.50% sulphur limit, suppliers in general won’t be offering it. Secondly, oil companies are unable to report in any detail on future plans for supply due to competition laws. So while there was consensus at MEPC 73 that early reporting of availability of 2020-compliant fuels is desirable, it was not clear how this can be done effectively, but it was agreed to issue
an MEPC circular urging states to report availability.

 

HFO ban in the Arctic?
Discussions about measures to reduce risks of use and carriage of heavy fuel oil as fuel by ships in Arctic waters centred on developing appropriate methodology to conduct an impact assessment on Arctic communities and economies of a proposed ban on HFO. The gist of the discussion at MEPC 73 suggests that not just appropriate methodology, but also results of impact studies, will be submitted to PPR 6 for consideration. If the benefit of a ban on HFO is seen as outweighing the potential negative economic impact, a ban might be proposed next year for approval in principle at MEPC 74.

 

GHG strategy follow-up
MEPC 73 approved a programme of follow-up actions of the Initial IMO Strategy on reduction of GHG emissions from ships. The programme is chiefly a planning tool for how to bring the work forward, with no concrete measures agreed as yet. Draft terms of reference for the Fourth IMO GHG Study were discussed but not agreed, with a view to approval at MEPC 74. Draft terms of reference for the fifth meeting of the Intersessional Working Group on Reduction of GHG emissions from ships (ISWG-GHG 5) were approved, expected to take place just prior to MEPC 74.

 

Proposals on concrete measures were invited to these meetings and it is hoped that MEPC 74 will manage to move this work forward, starting with tightening existing IMO instruments on energy efficiency and lay the groundwork for the more fundamental changes needed to achieve the IMO’s stated goal of cutting GHG emissions from global shipping, compared to 2008 levels, by at least 50% by 2050. There’s much work and consensus building to be done.

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