2020 Sulphur Limit - BIMCO Bulletin

2020 Sulphur Limit

TECHNOLOGY AND EFFICIENCY | 2020 SULPHUR LIMIT November 2018 The 2020 sulphur limit whats the problem? By lars Robert Pedersen, Deputy Secretary General at BIMCO a mid the countless concerns and decisions to be made by industry players ahead of 1 January 2020, what are the real issues when it comes to marine fuel? Admittedly, for shipowners, charterers and fuel suppliers, there are many unknowns but, as an industry, when it comes to contracts, we already have it pretty well covered. Bad bunkers Over the summer, a number of cases reminded shipowners of the risk that bad bunkers could flood the markets come 2020. This issue is not new, and I do not believe it is directly related to the 2020 sulphur limit coming into force. Admittedly, for shipowners, charterers and fuel suppliers, there are many unknowns I do, however, recognise that the frequency of bunker qualityrelated incidents is likely to rise because of the increased level of blending needed to reach the new sulphur limit. Opportunistic blending using marginal quality stocks may become a real issue. lars Robert Pedersen To address these concerns, we have MARPOL Annex VI, Regulation 18.3. It sets out various quality requirements for fuels delivered to and used on board ships. These are regulatory minimum standards and must be adhered to by both suppliers and users. By signing a declaration of conformance on the Bunker Delivery Note, the supplier warrants that these quality requirements have been met. The ISO 8217:2010 and later revisions all replicate these regulatory minimum quality requirements and fuels supplied to ISO 8217:2010 or later would, therefore, include them as conditions of sale. Should bad bunker incidents rise as the new sulphur regulation comes into force the industry does have the legal and contractual framework in place For time charter contracts, the BIMCO Bunker Quality and Liability clause states that charterers must supply fuels of the agreed specifications and grades; they must be of a stable and homogeneous nature and suitable for burning in the ships engines. The clause also covers who will be liable if this is not complied with. Read more here Should bad bunker incidents rise as the new sulphur regulation comes into force and this remains a real possibility the fact is that the industry does have the legal and contractual framework in place. Instability and incompatibility lurk No-one would disagree that the stability of fuel oil is very important. But what if it is not? What if the new 0.50% fuels are unstable or incompatible with each other? The ISO 8217:2010 (or later) includes limit values for the indicator test for stability of the fuel oil supplied. Recently, I heard that some new hybrid fuels may be given best before dates in relation to stability. This is something we will investigate further with the CIMAC Working Group 7 Fuels and the ISO Working Group responsible for maintaining ISO 8217. Clearly, if this becomes a regular feature of such fuels, we will need some indicator tests to reveal when this shelf life ends. Another issue is segregation of bunker stems. When it comes to compatibility, I am sure everyone would agree that it is entirely unreasonable to ask a fuel supplier to warrant that his product will be compatible with whatever other fuel is already onboard a ship without prior testing. One of the more important points in the BIMCO Bunkering Operation and Sampling Clause is that bunkers of different grades, specifications and/or suppliers must be held in separate tanks within the ships natural segregation. Read more here That means, come 2020, segregation of individual bunker stems will become even more important than in the past and must be given increased attention. Taking responsibility for safety When it comes to industry concerns over the safety of the new fuel and therefore the safety of the ship the issue is already covered in the SOLAS and MARPOL Conventions. We believe the regulatory reach of the provisions enforced on ships is adequate. What is missing is effective implementation of Regulation 18 of MARPOL Annex VI especially related to IMO member states taking appropriate actions when fuel oil suppliers have been caught supplying bad bunkers to ships. The regulatory provisions are there, but they are neither implemented nor enforced. We have called before and will continue to call on bunker states to take their share of responsibility, to enforce the regulations and come down hard on fuel oil suppliers selling bad bunkers. That is necessary for the future safety of the industry, now more than ever. Furthermore, the BIMCO suite of bunker-related clauses already covers most of the issues we are talking about, including also those related to ship safety. The revised BIMCO sulphur clause makes the obligations and liabilities of charterers and owners even clearer. The draft BIMCO transition clause has been considered by the Head of BIMCOs Contracts and Clauses department, and the remaining bunker-related clauses will be subject to a review to confirm their continued suitability post 2020. We do not expect drastic changes to be implemented. We need as wide a range of players as possible to take responsibility, as our industry heads for more change, concerns, decisions and the unknown. Photo (top): iStock / spooh That said, we do have the regulation far advanced to support the industry and, properly enforced, backing the changes coming. Connect with BIMCO Facebook Twitter Linkedin YouTube