lloyd's list article 44_19sep06_clearing a way through pollu

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Publication: Lloyds ListDate: 19 September 2006

Clearing a way through pollution lawsJohn Gilligan reviews the new Baltic Sea sulphur rules and other emissions

regulations

It has been close to four months since the Baltic Sea Sulphur Emission OxideControl Area (Seca) came into force on May 19. With this implementation, shipssailing in the Baltic Sea must use fuel with maximum 1.5% m/m sulphur content orbe equipped with exhaust gas cleaning systems capable of reducing sulphur oxideemissions to 6.0 g/kWh.

On August 11, the European Union low sulphur directive 2005/33/EC also took effect,bringing the requirements for 1.5% maximum fuel sulphur limit within the EU in linewith Marpol Annex VI.

Over the four-month period since the Baltic Sea Seca implementation, a number ofquestions on the interpretation and enforcement of these regulations have emergedin the industry.

Lets begin by looking at Marpol Annex VI, where failure to comply with Regulation14 is a detainable deficiency. The ship crew must therefore ensure proper fueldocumentation, including but not limited to Seca fuel change-over procedures andexecution, and recording of the fuel quality stored onboard; for example, the fuelsulphur level as bunkered.

Vessels which have received bunker delivery notes with improper fuel qualityinformation, or fuel deliveries in breach of the Marpol Annex VI sulphur content limit,should notify the vessels flag state administration as well as the port state of thesupplier. However, this is not as clear-cut as it may appear.

The shipping community is confused over the interpretation of fuels with test resultsslightly above the Marpol Annex VI 4.5% maximum sulphur content limit (or above1.5% sulphur content limit applicable for Seca operation). DNV Petroleum Servicesand other major bunker testing agencies encounter such borderline cases regularly.

Suppliers often argue that the reproducibility limits of ISO Standard 4259 means atest result just slightly above 1.5% sulphur content does not constitute evidence of anon-compliant fuel. Unfortunately, there is no reference in Marpol Annex VIconcerning the application of laboratory test precision to decide whether a product iswithin the sulphur content limit or not.

Many therefore feel that the International Maritime Organization should developclearer guidelines to elucidate the interpretations.

IMO might also consider adopting the more exact policy of those port stateadministrations treating 4.50% (i.e. with two decimal places, instead of 4.5%) as the

absolute limit for fuel sulphur content; as well as 1.50% (instead of 1.5%) to be


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applicable in the Seca. This would make interpretation easier and avoid disputes onrounding off rules.

Moreover, low sulphur fuels can only be guaranteed to meet a maximum limit of1.5% if they are blended down to much lower levels than the maximum so as to

effectively avoid the borderline sulphur content issues.

Another concern is the lack of a common legal structure for policing and meting outpenalties for breach of Marpol Annex VI in countries which have ratified thisregulation.

Approximately two thirds of the worlds cargo is transported by ship and this sector isbecoming increasingly subjected to stricter environmental regulations; not onlyglobally through the IMO, but also through regional initiatives such as thoseproposed for ports in the US west coast.

Since the Baltic Sea Seca implementation in May, industry feedback on availability oflow sulphur availability has been that the quantity is currently sufficient to meetexisting demands, although ship operators will have to pay a premium of around $30per tonne.

Ship operators also seem to be coping well with the technical challenges andimplications for their vessels switch to fuels with lower sulphur content. Thus far, wehave not yet observed indications of any related port state control detentions and itappears authorities could be taking a softly softly approach in these early days ofimplementation.

Still, stricter policing are expected over time as tougher environmental regulationsare introduced globally.

Indeed, escalating fuel prices are not the only major problem confronting shipoperators. A whole new series of environment-oriented regulations will bring fuelrelated issues to the fore for years to come.

The Seca programme is set to be expanded to the North Sea and English Channel in2007, while many other areas are considering introducing similar schemes.

In the Pacific, the US state of California is enacting its own sulphur rules from nextyear, which will require all ships trading within 24 miles of the coast to use distillate(DMA or DMB) with less than 0.5% sulphur content in auxiliary diesel engines anddiesel-electric engines. Alternatively, the ships must pay a non-compliance fee orhave provision for alternative control of emissions.

The California fuel sulphur limit, as with the other existing emissions controlregulations, will stimulate a much greater demand for low sulphur fuels.

And while ships sailing within a Seca now have to grapple with the feed rates andthe total base number of the cylinder lubricants they are using, DNV Petroleum

Services foresees that these vessels will face greater challenges from blended lowsulphur products supplied around the world.


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To produce low sulphur bunkers other than through blending, low sulphur crudeswould be required. Otherwise, desulphurisation of heavy fuel is an expensive andcomplicated process, consuming considerable energy and generating large amountsof emissions.

In the longer term, there may not be enough low sulphur fuel available asprogressively lower sulphur limits will surely be imposed to achieve increasinglyambitious emission targets. With this in mind, we may see a growing demand in thefuture for alternatives such as the use of abatement technology.

Meanwhile, attempts to blend down high sulphur content fuel are already causingproblems. Components naturally low in sulphur content may yet contain othercompounds that can lower the overall quality and performance of the blended fuel.

For instance, DNV Petroleum Services has observed some blended products with

abnormally high aluminium and silicon content, which came from the blendcomponents used.

Identifying the source of dubious products is also proving more and more difficultbecause it is no longer possible to pin down fuel deliveries to a particular port orspecific refinery.

One major challenge for adherence to emission regulations in the future is thereforein ensuring availability of enough low sulphur fuels without compromising on quality.As long as there are insufficient quantities of low sulphur fuel produced from on lowsulphur crudes, the industry will have to mix.

Another possible challenge is on board the ship, where there might be fuels ofvarying sulphur content levels stored in separate tanks, which the ship crew will haveto switch between in order to comply with the slew of fuel emission regulations to beimplemented in different areas.

Changing over from high sulphur to low sulphur bunkers before the vessel enters aSeca is no easy task. For many ships equipped with simplified fuel systems, properplanning will be crucial to a timely and effective change-over.

With all the demands imposed on bunkers, one positive outcome is that the industryis likely to focus more attention on the development of marine fuel managementknowledge and skills. This complex, yet under-rated, function will hopefully receivegreater recognition and emerge as a professional expertise in its own right.

John Gilligan is a regional manager with DNV Petroleum Services. Based in London,he can be contacted on [email protected]. For more information on marinefuel management solutions, please write to [email protected].


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MARINE FUEL EMISSIONS REGULATIONS: SIGNIFICANT DATES ANDREQUIREMENTSYear Date Authority Requirements

May 19 IMO MARPOL Annex VI entered into force2005Aug 11 EU EU Sulphur Directive Amended 2005/33

entered into force

May 19 IMO Baltic Seca entered into forceAug 11 EU Baltic Seca enforced by EU directive

2005/33Aug 11 EU MGO (DMA/DMX) used in EU to have 0.2%

maximum sulphur content.Aug 11 EU 1.5% maximum sulphur content limit for

sales of MDO (DMB/DMC) in EuropeanUnion

2006

Aug 11 EU Maximum 1.5% sulphur content limit for fuelconsumed by passenger ships on regularservice to/from EU ports

Aug 11 EU North Sea and English Channel Secas enterinto force

2007

Nov 21 IMO North Sea and English Channel Secas enterinto force

Jan 1 EU Max 0.1% sulphur content limit on MGOused in EU

2008

May 19 IMO All ships must have IAPP certificate

2010 Jan 1 EU Max 0.1% sulphur limit on all marine fuelused for any purpose by ships at berth inEU ports

lloyd's list article 44_19sep06_clearing a way through pollu

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