Wednesday, February 27, 2019

As Sulphur Cap Draws Closer So Vessel Owners Need to Explore Their Options

Maritime Insurance P&I Club Spells Out the Alternatives
Shipping News Feature
WORLDWIDE – It's not just Brexit that has a deadline drawing ever closer, the International Maritime Organisation (IMO) has decreed that in just ten months' time, on 1 January 2020, under the auspices of the MARPOL convention that the use of heavy fuel oil in merchant vessels will be outlawed. Now the maritime insurance specialist Shipowners' Club has been looking at the four methods a vessel owner or operator can select from in order to comply with the regulations.

Whatever system is chosen the resultant emissions must contain no more than 0.5% mass by mass (m/m) of sulphur, that’s just a seventh of the current permissible limit. What is really key to compliance however is that this needs to be a two stage operation that is, no matter what method is chosen, there must be detailed and complete records showing an audit trail demonstrating the rules have been obeyed to the letter. Omissions will doubtless be seen as hidden transgressions by the authorities so records should be both accurate and transparent.

Every stage of the switch between fuel oil types, installation of any scrubber system and any associated maintenance records needs to be clearly recorded. State Port Authorities will doubtless be keen to collect fines should any anomalies or irregularities be spotted and this applies equally when different fuel types are used, with proper segregation and the tank cleaning records and fuel quality test results ,maintained in good order and in an easy to understand format.

The Shipowners’ Club makes the point that crew need to be fully trained, not just in the physical demands of the new regime, but in this importance of maintain a spotless set of records, and a review of existing procedures and risk assessment parameters should also be considered.

So what are the options for compliance and which is best for individual operators? The choice really comes down to each specific set of circumstances, in a single fleet there may be different requirements even for sister ships. If for example a vessel makes any part of a voyage within an Emission Control Area (ECA). When these appeared in 2015 the limit was set of 0.1% m/m yet the switch was simplified with the use of low sulphur distillate fuels.

This type of fuel however is particularly expensive so for a vessel entering such an area occasionally the operator will probably choose to switch between different fuel types. In this case those accurate records are of even more importance.

The second, and most talked about option, is the ‘scrubber’ system which allows the use of any fuel available and can be retrofitted to the ship. There are two types, open loop, which is likely to be objected to in many locations, as the water which cleans the emissions is discharged into the sea, rather defeating the required environmental objectives, and closed loop. These use a recycled body of water which continually recirculates and treats the emissions, but generates a large amount of toxic detritus which needs to be disposed of responsibly, and potentially expensively.

Scrubber systems are more suitable for larger vessels as they require a fair amount of room to fit however, as the Shipowners’ Club points out, getting time and dry docking facilities may make them impractical which leads to the third, and next less expensive option, switching to a low sulphur oil (treated IFO or HFO). This presupposes that the ship operates where these are permissible, but the drawback can be ensuring that the right fuel is available in the right quantities in the right time and place. Pre purchase bunker agreements at the ports in which the fleet usually calls can assure this.

Finally we have alternative fuel sources which include a variety of gases and of course the electrical option which is only currently in its infancy. These newer sources of power are likely to become de rigeur as time passes as they will accommodate any future MARPOL policies in the future. Even so the retrofitting option to accommodate fuels such as LNG is becoming more widely available and popular, whilst numerous newbuilds are designed with this or dual fuel in mind.