Tuesday, October 9, 2018

Maritime Stakeholders Clarify Their Position on the Incoming Marine Fuel Sulphur Cap

Misconceptions Cleared Up by Joint Statement from Registries and Ship Owners
Shipping News Feature
WORLDWIDE – More controversy around the incoming mandatory sulphur cap on marine fuels as ordained by the International Maritime Organization (IMO) and due to come into force on the 1 January 2020. In August a bevy of industry stakeholders, including the Registries of the Bahamas, Liberia, Marshall Islands and Panama, together with BIMCO, INTERCARGO and INTERTANKO, heavy hitters all, co-sponsored and submitted a document to the Marine Environmental Protection Committee (MEPC) 73 meeting taking place 22-26 October 2018.

It now transpires that the document, ‘MEPC 73/5/14, Safety Implications and respective challenges associated with 2020 compliant fuels’, and henceforth referred to as ‘the paper’, has given rise to certain misconceptions which some of those involved now feel should be clarified. The paper, was intended to assist the MEPC 73 in its consideration of potential safety implications associated with the transition to the incoming 0.50% fuel oil sulphur standard.

The paper contains a proposal to establish an experience-building phase (EBP), intended as an institutionalised data gathering measure, with the purpose of providing greater transparency and detailed information on the compliance situation following the introduction of the cap. Now the contributing co-sponsors say they are aware of the uncertainties and challenges associated with the consistent implementation of the standard and are seeking consensus at MEPC 73 to develop an approach to safely address these challenges, while not delaying the enforcement of the standard.

The contributors have therefore itemised six things which they see to be misconceptions and subject to misinterpretation, and we publish the list of these, together with their respective clarifications, below:

  • Misconception 1: The paper seeks to delay the 0.50% global fuel oil sulphur content standard (regulation 14.1.3 of MARPOL Annex VI).

    Clarification: The co-sponsors are fully committed to a successful transition to the 0.50% fuel oil sulphur standard on 1 January 2020. The paper absolutely does not attempt to change the standard, nor does it seek to delay the 1 January 2020 effective date. The co-sponsors stand by the decision of MEPC 70 in 2016 to retain 1 January 2020 as the effective date for regulation 14.1.3 of MARPOL Annex VI (Resolution MEPC.280(70)). Any claim that the co-sponsors are seeking to delay the 1 January 2020 coming into force date is false.

  • Misconception 2: The paper implies a delay to the enforcement of the 0.50% global fuel oil sulphur content standard.

    Clarification: There is no suggestion in the paper to delay or weaken the general enforcement provisions of MARPOL Annex VI in a wholesale manner. Compliance with the 0.50% global fuel oil sulphur standard is expected to be enforced on 1 January 2020 in the same manner as the current 3.50% global standard (and the 0.10% standard within emission control areas (ECAs) are enforced today. Concentrated inspection campaigns are being carried out by port State control regimes in anticipation of the transition, and strict enforcement should be expected. The paper seeks to facilitate a pragmatic approach by Administrations specifically in those instances where a ship is not able to achieve compliance due to fuel non-availability and fuel quality problems. This is relevant regardless of the means by which a ship owner chooses to comply with the standard and does not suggest a wholesale relaxation of enforcement regimes in all scenarios.

  • Misconception 3: The proposal is not clear as to what constitutes ‘undue penalisation’ of individual ships.

    Clarification: ‘Undue penalisation’ in this context refers to unfair control measures applied to a ship which is found non-compliant due to factors beyond its control, despite all best efforts and preparation. Given the challenges anticipated with the transition to the 0.50% global fuel oil sulphur limit and potential safety risks resulting from new blends or new fuel types, based on trends identified within the paper, attention is called upon relevant authorities to ensure fuel oil suppliers uphold their share of obligations under MARPOL Annex VI to supply safe and compliant fuel oil and take appropriate remedial action against suppliers that have been found to deliver non-compliant fuel oil. This is a key component to the successful implementation of regulation 14.1.3. The responsibility for compliance cannot fall entirely upon the ship owner in this regard.

    Ultimately, it is up to Parties of MARPOL Annex VI to determine the appropriate action to take in non-compliance situations with due regard to mitigating evidence provided in case of non-availability. The paper makes no distinct proposal in this regard. However, noting that further work is required of the Sub-Committee on Pollution Prevention and Response (PPR) in developing guidance for consistent implementation to address fuel oil non-availability situations, especially in light of the forthcoming amendments to establish a prohibition against the carriage of non-compliant fuels, information gathered from the EBP will provide greater transparency to enable all Parties to take appropriate enforcement action in a consistent manner in such situations.

  • Misconception 4: The paper seeks to delay the adoption of the MARPOL Annex VI amendments prohibiting carriage of non-compliant fuel oil.

    Clarification: The draft amendments to regulation 14 of MARPOL Annex VI to institute a prohibition against the carriage of non-compliant fuels are set to be adopted at MEPC 73 and enter into force as early as 1 March 2020. Importantly, this decision does not have any impact on the effective date for the 0.50% global fuel oil Sulphur standard taking effect on 1 January 2020. On that basis, there is no connection between the EBP proposal and the consideration of adoption of these amendments. The amendments are under consideration as a separate agenda item, and the paper does not propose any delay to the adoption of these amendments.

  • Misconception 5: The functioning and timeline for the EBP is unclear.

    Clarification: The co-sponsors envisage the EBP as a unique formalised data collection and analysis measure to closely monitor the implementation of the 0.50% global fuel oil sulphur content standard. Specific details on the plan for the data gathering and analysis would need to be developed during the period between MEPC 73 and MEPC 74, in collaboration with all other IMO Member States and Organisations, to find the most appropriate approach (either through expansion of the IMO GISIS database, or another separate reporting platform). Similarly, a fixed timeframe was not proposed for the EBP so that it has sufficient flexibility to either be shortened or extended to conclude when the fuel oil availability situation stabilizes on a global basis. In any case, all ships are expected to fully comply with the 0.50% global fuel oil sulphur content standard on 1 January 2020, regardless of when the EBP commences or how the data is collected.

  • Misconception 6: The EBP will lead to a revision of MARPOL Annex VI, which will create uncertainty and delay implementation.

    Clarification: A possible review of the regulatory framework of MARPOL Annex VI is suggested in order to provide a goal or end-point to the EBP process. Functionally, such a review cannot delay implementation of the 0.50% global fuel oil sulphur content standard after it has already come into effect. It is not possible to ascertain whether any improvements to the regulatory framework are necessary, without knowing the actual implementation situation after 1 January 2020. Possible revisions might be necessary to ensure more effective implementation of the standard. Otherwise, if the results of the EBP suggest there is no compelling need to improve the regulatory framework, then no revisions will be considered.