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Port Report: Fuel quality rules left up to port states for IMO 2020

Meeting the IMO 2020 sulfur regulation should not be a problem for owners when the regulation enters into force in January 2020 but making certain that the enforcement of the regulation is uniformly applied across the globe could prove problematic.

International Maritime Organization (IMO) regulations are not enforced by the organisation itself, but rather by member states affiliated to the United Nations’ maritime regulator. The same is true for the much heralded Sulfur Cap which will see the sulfur content in fuels reduced to less than 0.5 percent, globally, from its current levels of less than 3.5 percent in international waters. This in turn will reduce the poisonous sulfur oxide gas emitted from ships.

In order for the enforcement of the regulation by member states it is required that each national jurisdiction applies the regulation by establishing it as law through its own legal system. That would allow each jurisdiction to take legal action against those that do not comply.

Tim Wilson, the principal specialist for marine fuels at Lloyd’s Register’s Fuel Oil Bunkering Advisory Service (FOBAS) told FreightWaves, that it is unclear how many flag administrations have translated this regulation into law. The flag state denotes the jurisdiction that a ship operates under, for example, a Panama flagged vessel is subject to Panamanian law.

In addition, port state control, the jurisdiction for the port of call for a vessel can also act against a non-compliant ship, but again Wilson said it is unclear how many administrations have entered this regulation into their statutes.

Denmark has ordered sniffer drones that will analyse the sulfur content in vessel funnel gases, but Denmark’s jurisdiction is in a Sulfur Emission Control Area, where the regulation allows just 0.1 percent of sulfur in vessel fuel, whereas the new regulation will apply to international waters and will require the less stringent 0.5 percent of sulfur in the ship’s fuel.

This could mean that some rogue operators could choose to burn non-compliant fuel up to the emission control area and then switch to the compliant 0.1 percent fuel without any checks in place. This could be a particular problem in the U.S. where the emission control areas reach out 200 miles from shore, with many vessels crossing the comparatively empty Pacific Ocean without crossing into any jurisdiction.

“Would the Americans know if the fuel used before crossing the 200-mile limit is compliant?” asks Wilson. The U.S. will be looking for 0.1 percent compliant fuel and although the vessel will only be legally allowed to carry sulfur rich heavy fuel oil if it is fitted with a scrubber, a sulfur cleaning technology, will the authorities check that the fuel oil is compliant, said a sceptical Wilson.

He also points out that while Sweden had initially made the non-compliance with the sulfur regulations in the Baltic emission control area a criminal offence that had now been changed to a civil law as the prosecution levels for a criminal case were too stringent.

Wilson says that with a civil case you can hold a non-compliant vessel and demand that it offloads the offending fuel, that is a much slower process than loading it, “it could take up to five days,” said Wilson and with the costs of hiring a ship at anything between $5,000-$35,000 per day, depending on the size, that could be a costly affair. Even then the owner would need to buy new, compliant, fuel and pay a fine. Such a move would prove a suitable deterrent if the jurisdiction has in fact passed the rules into its national laws.

Some of the owners’ questions around the Sulfur Cap could be answered when the Marine Environment Protection Committee of the International Maritime Organization (IMO) meets in the week starting 13 May 2019. The IMO, in the spring of 2018, was asked to look at best practices for coastal states and port state controls in implementing the sulfur regulation.

According to a document that has been submitted to the secretariat by the U.S. delegation, that will be discussed at the next meeting in May 2019, “These best practices are intended to assist Member States in carrying out their responsibilities under MARPOL Annex VI, to ensure effective implementation [and enforcement] of statutory requirements.”

Discussions within the correspondence group included the methods in which fuel quality would be maintained as well as the difficulties around making sure the fuel bunkered would be compliant with new regulations.

Most participants within the group made no further comments to the draft document that had been circulated. But one member of the group pointed out that, “There is a need for monitoring by the Member States of the integrity of the quality management systems of bunker suppliers while also acknowledging there seems to be no such legal provision in MARPOL Annex VI.”

The document submitted by the U.S. to the Marine Environment Protection Committee acknowledges that member states are required to promote the use of compliant fuels and to ensure that bunker suppliers are meeting their obligations under the new rules.

The document also points out, “Regulation 18.3 requires fuel delivered to ships to comply with a number of qualitative requirements. However, no specifications (i.e. ISO 8217) or routine testing scheme exists, which would guarantee that a fuel complies with such qualitative requirements.”

Wilson points out that the regulation focuses on the fuel use rather than the supply and so owners, when buying fuel must be certain to stipulate the correct specifications for the fuel required and to make certain that these specifications are entered onto the bunker note, which is a legally binding contract between the fuel supplier and buyer.

Wilson said that there has been a lot of fuss made over the introduction of low sulfur fuel, but he believes that in the end the system will settle down. He points out that fuels are already blended, and owners are used to using settling tanks, not mixing incompatible fuels and ordering the correct specification for their vessels.

“The major problem is training crew, monitoring fuels and knowing how to blend fuels,” said Wilson. On board testing is also a good idea, he added, with some sophisticated testing equipment available at around $10,000 this can be done, but Wilson believes that owners only really need to buy a testing and compatibility kit in $1,000 range to get a reasonable analysis of the fuel.

Scott Herring, the key marine accounts manager at Parker Kittiwake, explained to FreightWaves how the compatibility kits work. “We don’t want to pull the wool over people’s eyes, the compatibility kits are not ground-breaking technology, it’s a small oven and some chromatography paper that simulates the combustion process in the cylinder.”

Effectively, an engineer will mix the fuels in the approximate ratios that they could be mixed within a tank, they will then place the mixture on the chromatography paper and place it in the oven for around 20 minutes.

There should be a thickening of the mixture in the middle, with smooth droplets in a circle with no deposits or lines if the fuels are compatible.

Picture this, what the chromatography paper looks like after a fuel compatibility test.

The Parker Kittiwake testing system is relatively inexpensive at around $2,000 and Herring says the company has seen an increase in the sales of the system of 36 percent since the start of the year, but enquiries are up 267 percent in the same period, said the company. “We expect the interest to continue to grow into next year when the rules are applied,” said Herring.

Wilson added, “It [the testing] will only be indicative, but it will give the crew an idea of what’s in the fuel, that analysis and compatibility check, to see if the new fuel will work with the existing fuel already loaded can build confidence.”

Herring accepts that some operators use the oven in the galley with the chromatography paper and that this can also work, but he said, “Our kit will give you a uniform, repeatable and reliable test result,” which is not necessarily the case with the galley oven, and with so much at stake a small investment of this kind can save a lot of trouble and money.

According to the FOBAS specialist European and Singapore based authorities have developed a process which allows them to check back through the ordering and supply process to find where the problems came from, but Houston, another region where many ships refuel, has not developed such a system.

Technology could play a part here. FOBAS has developed a system that will monitor the transaction between supplier and buyer through a blockchain system. The fuel supply process was developed by BLOC, the Blockchain Labs for Open Collaboration, based in Denmark in partnership with representatives from every element of the ship fuel supply process, including testing services, suppliers, ship operators, port authorities oil traders.

Using blockchain each company involved in the supply of fuel is verified and can verify that the fuel supplied meets the customer’s specification. That allows all those, including the regulatory authorities, to have a verifiable record of what fuel was supplied. Testing companies will verify that samples meet the specification and that will help the ship fuel supply industry and the fuel buyers.

“The idea behind BLOC’s system is very good,” said Wilson, “It is exactly what the industry needs, a stepped approach to fuel supply.”

However, he cautioned that often fuel suppliers may buy oil from a number of sources and that will be blended, but that could mean that they are unaware of where fuel has come from and what is in it themselves, so the BLOC system could still find it difficult to pin down what is in the fuel supplied.

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Nick Savvides, Staff Writer

Nick came to FreightWaves in December 2018 from Fairplay, a shipping market publication. He covers the shipping, freight and logistics industry in Europe. Since starting his career as a journalist in 1990, Nick has worked for a number of significant freight publications abroad, including International Freighting Weekly, the online news service for Containerisation International, ICIS, the chemical industry reporting service, as well as Seatrade in Greece. Nick also worked as a freelance journalist writing for Lloyd’s List, The Observer, The Express and The European newspapers among others before joining Seatrade Newsweek in Athens.

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