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Pull your SOx down!

Players in the western Mediterranean are happily rolling with the 2020 changes, but the latest Barcelona Convention meeting looks likely to throw a curveball, as John Rickards reports

It’s no surprise that the fuel producers and bunker suppliers of most of the western Mediterranean spent the final few months of 2019 touting the strengths of their 2020 preparations. After all, even if it was the way they felt, it would be a bold company indeed to come out and say they still didn’t have the right specs, viable supply volumes, or any clue what the market’s demands were going to be or how to meet them.

Thankfully, though, everything seems to be in hand and we went into the new year carried aloft on a wave of “ready and able” promises that, so far at least, seem to have been borne out in practice.


In September, Italian producer Saras announced that it was starting direct supply of IMO 2020-compliant bunkers at specific dedicated areas of the ports of Sarroch and Cagliari alongside all its regular grades, produced at its local Sarlux refinery.


The company’s tanker Atlantic will serve these two ports, as well as, Saras said, offering further supply options to ships passing along the Sicilian Channel and the Tyrrhenian Sea. “Through this activity the Port of Cagliari will be provided a service not available until now. Saras is proud to continue its sustainable growth path and to be able to contribute to the industrial and commercial development of Sardinia.”


In Spain, oil giant Cepsa went into the winter positively bouncing with confidence regarding the changeover, citing its refining strengths and depth of its preparations.


In a statement announcing its first deliveries of IMO 2020-compliant fuel in the Canary Island in November, the company certainly wasn’t shy about the coming January: “Thanks to years of experience in this field, Cepsa has been ready for months in advance for what is one of the greatest changes and greatest challenges in the history of the shipping business,” it said. “As one of the biggest players in marine fuel supply, Cepsa’s preparation for these changes has been years in the making. Work at its Research Center and major investment in its refineries have put it ahead of the curve.”


In fairness, the company was trialling its own non-blended VLSFO fuel on nine vessels back in May 2019. Cepsa claims that blended fuels – which seem to be making up the bulk of the market in most places – are more unstable. The trial stems in question weren’t small ones – 5,500 tonnes were supplied to two ships in Santa Cruz de Tenerife, followed by 2,750 tonnes supplied to ships in Las Palmas on Gran Canaria. It certainly shows that despite generally soft uptake ahead of the year end, some operators (in this case, one of them a cruise line), have been looking to get an early feel for the new fuel type.


Carlos Giner, director of Cepsa’s bunker business, said: “We are so pleased to have been able to successfully fulfil our first orders for sustainable marine fuel in the Canary Islands. It’s something we’ve been prepared for months in advance. Cepsa defines itself as providing fuel for every situation, every customer, and once again we have stayed true to this — the regulatory changes come into play in January, so we are ahead of the game.”


Other producers were a little more measured in their announcements.


BP said in August that it was adding Valencia to its list of compliant fuel ports – making it the company’s only one in the Mediterranean – but only offering 0.10% sulphur MGO, not 0.50% sulphur fuel oil (VLSFO). The port is served by a BP-operated 4,000 dwt bunker barge loaded with gasoil from BP’s Castellon Refinery, which is located approximately 75 km north of Valencia.


Somewhat surprisingly, BP said it expected the IMO 2020 limit to mean MGO would account for the majority of marine fuel usage, and highlighted the fact that as a known quantity, MGO would mean no change in operating procedures or ship performance.


“Fuel incompatibility is one of the main challenges our customers are faced with as the industry is shifting to cleaner fuels,” global head of BP Marine Eddie Gauci said. “Our early market entry with MARPOL 2020 compliant marine fuel demonstrates BP Marine’s commitment to the industry and vessel owners to ensure availability with enough lead time to allow for a smooth transition to low sulphur fuel.

We believe that an offer of the low sulphur marine gasoil variety DMA in the region will benefit our customers and the region.”


Whether the company will move to offer its VLSFO in the port as well remains to be seen. Currently its only European outlet for VLSFO is the ARA region in northwest Europe. Rival ExxonMobil is offering its low sulphur fuel through Marseille and Genoa. Augusta and Civitavecchia in Italy are supplied by Bunker Energy, with a dedicated pipeline providing the former with straight run VLSFO for shipment ex-barge.


On the southern side of the western Mediterranean, the Port of Ceuta announced its first VLSFO availability in November, with 34,500 tonnes of compliant fuel transferred to storage by Vilma Oil at the port’s new no. 3 berth, shortly followed by its first bunkering with VLSFO, with 90 tonnes delivered to a Turkish general cargo ship. Ceuta has been looking to increase bunker traffic given its proximity to the Strait, and in the first nine months of 2019 had seen 665,087 tonnes delivered to visiting vessels.


In Gibraltar, it should be business as normal, relatively speaking. The major suppliers all set up their compliant fuel supplies well in advance and given the importance of bunkering to the port it’s no surprise the change was given some priority in government.


The territory has been looking to the future as well, with the government setting legislation handling LNG bunkering as well as laying out a well-defined code of practice covering the sector. The first instance of LNG bunkering in the port came in August, when the semi-submersible crane vessel Sleipnir bound to the Mediterranean from its building yard in Singapore took on 3,200 tonnes of LNG supplied by TitanLNG, who brought in a tanker specifically for this delivery.


“We thank the Port of Gibraltar for their support,” Titan LNG CEO Niels den Nijs said. “The operation was performed in the sheltered bay helping to make this a safe, efficient and smooth operation.”


While shore-to-ship LNG bunkering will, the government has reiterated, never happen in Gibraltar as the gas tanks onshore are solely for use by the territory’s 80MW gas power plant, ship-to-ship bunkering is something Gibraltar would like to see more of in the future.


There may, of course, be somewhat trickier matters to deal with in the coming months as Brexit rumbles on. While a transition period runs to the end of the year the UK’s prime minister has insisted it won’t be extended. So Gibraltar’s government has put in place as much contingency planning as it can to keep the port running smoothly, for instance, building a ro-ro access ramp to allow direct calls rather than goods coming from Algeciras by road. But some bunker suppliers use tank storage across the Bay in Algeciras, and the end of the transition period – and free movement for fuel cargoes between Gibraltar and Spain – could be vastly more complicated than IMO 2020.


ECA proposal taking shape
Another complication on the horizon, and one involving every littoral state in the region, is the possibility, looking increasingly like an inevitability now, of the Mediterranean becoming the next sulphur emission control area (ECA).


The latest meeting of the Conference of the Parties (COP) to the Barcelona Convention in December 2019 in Naples set out a new road map to establishing a SOx ECA across the region, after first Spain and then Italy joined France earlier in the year in calling for its establishment.


It wasn’t all plain sailing, though. Several member states wanted to see further study into the economic impacts of instituting an ECA across the region, while NGOs led by Italian clean air group Cittadini per l’Aria expressed their disappointment that the proposals so far “lacked ambition” in their timeline and that they didn’t include NOx emissions limitation as well as SOx.


The EU put forward a considerable number of proposals that the UN’s deputy coordinator Tatjana Hema said was a “step up” as they emphasised the need for the ECA to cover the entire Mediterranean in order to maximise environmental and health benefits and to avoid competition distortion. Those proposals were supported by Israel, but others, including Egypt, Algeria, Morocco and Tunisia were concerned that they were being rushed, with too little time to consider them in the four days of the COP meeting. Others, including coordinator Gaetano Leone, were put off them by the need for new rounds of consultation.


After what the UN described as “lengthy negotiations” – amongst others alluded to in Leone’s closing remarks to the conference when he said the “tensions and fights of this COP” would soon be forgotten as “we are Mediterranean after all” – the convention settled on lesser changes to the original draft text, but even they could have far-reaching consequences for shipping.


The proposed Mediterranean ECA under MARPOL Annex VI will cover the entire Mediterranean, and is intended to be submitted for formal approval to the 78th session of the IMO’s Marine Environment Protection Committee (MEPC 78) in 2022. In the meantime, the COP’s technical and economic experts will prepare the detailed groundwork for the ECA, while signatory states to the Barcelona Convention who haven’t yet ratified MARPOL Annex VI or put it into their domestic legislation are being encouraged to do so as soon as possible.


Suggestions from environmental body Nabu, which has long campaigned for the move, that the Mediterranean ECA could be in place as early as 2023 are perhaps optimistic, but it does now look like it’s coming in the next few years.


Local emission reduction initiatives
Various ports in the region have been looking at ways to cut local air pollution over the past few months. Marseille is extending its cold ironing facilities to reduce ships’ use of fuel at berth with the aim of making the port entirely electric by 2025, Barcelona is reportedly considering cutting the number of cruise calls it accepts due to NOx and particulate levels, and Naples is coming under increased pressure from environmental and health groups over similarly high levels of air emissions from ferries and cruise vessels. As not all ports have been able to offer alternatives to on-board generation so far, it’s encouraging then to see the region’s first “mega battery” retrofits take place on two Grimaldi Group vessels described by Grimaldi’s Andrea D’Ambra as “an important component in our vision for sustainable shipping.”


Norwegian company Corvus Energy installed 5.5 MWh battery energy storage systems (ESS) on the ro-pax cruise ferries Cruise Barcelona and Cruise Roma during the summer, which will allow the vessels to operate solely on battery power and with zero emissions for up to four hours during port stay.


“An ESS this massive had never before been retrofitted onboard a cruise ferry vessel. It’s clear now that if shipowners are willing to go green, the technology exists,” said Corvus’ Roger Rosvold. “We are extremely proud to be chosen to supply such a groundbreaking installation. The Grimaldi Group is a highly skilled and experienced shipowner. We are impressed with their commitment to reduce emissions from their operating fleet and their in-depth knowledge on what can be done. Good collaboration and close partnership are key in developing new and innovative solutions to accelerate the adoption of green technology. At Corvus, we will continue to drive technology further by pushing boundaries for the use of batteries.”

Corvus has a (relatively) long history of maritime battery and energy storage projects, providing battery power to more hybrid or all-electric ferries than all other providers of energy storage systems combined. With port air quality very much a hot issue and the Mediterranean’s high requirements for ferry traffic and hefty cruise presence, this kind of large-scale installation seems likely to become more common, particularly if the Grimaldi experience is a positive one.


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