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IMO 2020 - ARE YOU READY FOR THE NEW EMISSION REGULATIONS?

Sybille Rexer, Counsel

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The IMO Policy Goal

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1 January 2020

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IMO MARPOL Regulation 14 & ANNEX VI: Sulphur oxides and Particulate Matter EMISSIONS (1/2)

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IMO Emission control areas (2/2)

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Economic Effect in the Shipping Industry

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Sanctions for Non-Compliance?

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No established fine or sanction set by IMO Responsible bodies: port and flag States

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The EU

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Directive (EU) 2016/802 – Sulphur Directive • additional fuel-specific requirements for ships calling at EU ports

Sanction mechanism, Article 18 (1) Member States shall determine the penalties applicable to breaches of the national provisions adopted pursuant to this Directive. (2)The penalties determined shall be effective, proportionate and dissuasive and may include fines calculated in such a way as to ensure that the fines at least deprive those responsible of the economic benefits derived from the infringement of the national provisions as referred to in the first paragraph and that those fines gradually increase for repeated infringements.

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New risks for SHIPOWNERS (1/2)

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Check your Insurance Policy • Machinery damage (i.e. cat fines) is by far the most frequent cause of loss in

marine insurance • numbers are likely to increase with the introduction of low-sulphur limits, as e.g.

cat fines will require more refining HULL INSURANCE

• Ultra-Low Sulphur Fuel Oil (UFLSO) main challenges: • Cold flow properties (heating required) • Stability (limited experience) • Compatibility (increased storage and separation requirements, and higher

demands for tank cleaning between bunkering) • Main engine may not attain expected speed MARINE & HULL INSURANCE

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New risks for SHIPOWNERS (2/2)

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What could help to minimize the new risks:

• Sampling and testing of fuel before use • Charter/bunkering contracts should specify fuel less than 60ppm • Regular cleaning of filters, frequent drainage • Clean the settling and service tanks during dry dock • Check centrifuge capacity on specifications for new buildings • Introducing a new fuel cleaning system layout • Automatic control of the cleaning flow rate • Intensified monitoring of the fuel treatment efficiency

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New risks for SHIPOWNERS (2/3)

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Measures:

• Ships taking on fuel oil for use on board must obtain a bunker delivery note, which states the sulphur content of the fuel oil supplied.

• Ships must be issued with an International Air Pollution Prevention (IAPP) Certificate by their Flag State. This certificate includes a section stating that the ship uses fuel oil within limits.

• Port and coastal States can use port State control to verify that the ship is compliant.

• Air surveillance could be used to assess smoke plumes, and other techniques to identify potential violations.

• Intensified monitoring of the fuel treatment efficiency

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Thank you!

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Sybille Rexer

Rechtsanwältin | Counsel

Große Elbstraße 36 | 22767 Hamburg

T +49-40 31 77 97 0

s.rexer@asd-law.com

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