Watchkeeper - BIMCO Bulletin

Watchkeeper

WATCHKEEPER November 2018 Watchkeeper Facing heavy weather By Michael Grey, BIMCOs correspondent in London The industry is facing a perfect storm of environmental regulation. This much-quoted phrase was spoken by former BIMCO President John Denholm several years ago, and its meaning has since grown in significance. At the time, Denholm was acknowledging the unstoppable pressures that ship operators were facing such as the need to make their vessels more sustainable by reducing their atmospheric and in-water emissions, as well as the substantial compliance costs likely to fall on their heads. These societal pressures have continued to build, driven by concerns about climate change, and the shipping industry has found itself no longer able to stand behind its assertion even though it is true that it remains the most environmentally friendly mode of transport. Shipping must carry its share of the environmental burden. The industry is facing a perfect storm of environmental regulation will the fuel be on spec? Michael Grey Fuel blending today is a somewhat crude affair (no pun intended) and not properly regulated The regulatory engine has rolled on remorselessly and the IMO 2020 sulphur cap deadline is now just over the horizon but the decisions that must be taken on the strategies to meet the new dispensation are far from clear. An analogy might be the dilemma facing the shipmaster in an anchorage, with a storm approaching; does he stay and hope his anchor does not drag, or does he weigh and put to sea? Do you opt for the various unknowns of switching to low sulphur fuel oil or those attached to the purchase and operation of exhaust gas scrubbers? As with our anchored Captain, there are many variables to be faced. There are only rough estimates of the cost of this fuel per tonne and wildly different estimations of its availability. At a time when scarcely a day goes by without some P&I Club issuing bunker alerts about abrasives and chemicals and fines, and the constituents of shale oil being helpfully poured into bunkers supplied, it might be suggested that there is a certain lack of confidence in the ability of those selling fuel oils to guarantee that it will be on spec. These are not alerts generated as a result of people purchasing bunkers in some down-at-heel port, but from reputable sellers in major ports. Nobody, it seems, is able to get a grip on this problem, so what will be the result when the same suppliers are pumping blended low sulphur fuel with very little leeway on its sulphur content? Fuel blending today is a somewhat crude affair (no pun intended) and not properly regulated, and if we consider that sampling is a business fraught with errors and omissions, the ship operator finds himself horribly exposed once the port state inspectors come calling with their sampling kits. Captain, you are in big trouble, says the inspector, brandishing an analysis from his tame laboratory. It could be the source of a very useful income stream in some of those places BIMCO has warned its members about for years. Scrubbers not plug and play equipment Should the more prudent opt for scrubbers? There appears to be a reasonable choice in the equipment on offer, but as experienced operators know what is promised by the manufacturers may not eventuate in the light of practical operations on the rolling main! It is all very well to be told that scrubbers are a great investment with a modest payback time, but this is not plug and play equipment, but a substantial item of fairly complex and expensive equipment. They may have been around for a while in enclosed seas such as the Baltic, but have not been operationally tested to any great extent on large ships, with big engines, on long voyages. Will your engineering teams be able to cope? Can you have confidence in the manufacturers assurances of ongoing support? And, importantly, can you get the equipment fitted by 2020, bearing in mind the queue at the suppliers counters and at the repair yards where the work must be done? It has been suggested that the manufacturers will be hardpressed to supply 2,500 installations by the due date, which implies that more than 80% of the world fleet will be opting to operate with blended fuels, despite the uncertainties noted above. It is all very well to be told that scrubbers are a great investment with a modest payback time, but this is not plug and play equipment Even if a decisive operator takes his courage in both hands and opts to invest in scrubbers, there are other uncertainties to be faced. Do you opt for openloop equipment that voids its washings into the sea, which is said to be simpler and well proven? Or are you cautioned against such a strategy when you read that a growing number of coastal states are likely to ban the operation of such systems in their waters, or at least seriously restrict their use? Calling for available port facilities If you decide that closed-loop systems are less likely to attract official opprobrium in a changing regulatory scene, can you be assured that port reception facilities will be available to take your residues and at a reasonable cost? It is worth recalling that one of BIMCOs longest campaigns, maintained by this organisation for decades, has been to encourage ports to make waste reception facilities available and affordable, and this is far from a universal situation. Will ports, which are already reluctant to take slops and oily wastes, be willing to receive scrubber residues? And those same port state officials who will be looking at fuel records and sampling bunker tanks will be looking to test the exhaust gases to ensure that the scrubber is working optimally. Practical engineers have pointed out that, while they might believe the equipment is doing its job perfectly, only analysis by third parties will verify this in the absence of alarms. It will be something of a concern when the heavy tread of the port state inspectors is heard on the gangway. Photo credit (top): iStock / nightman1965 Are we being too pessimistic here? Possibly, but the regulators, from the best possible motives and with the perhaps grudging assent of the industry have produced regulations that require practical ship operators to face a whole range of financial, strategic and technical challenges, all hedged with numerous unknowns. The industry, with goodwill and the appropriate expertise, will hopefully grapple with the translation of regulations into the world of practical ship operation, and demonstrate its usual capability. It may not turn out to be that perfect storm but the forecast is for heavy weather. The Chief tells me our new scrubber uses traditional technology Connect with BIMCO Facebook Twitter Linkedin YouTube