MARPOL Annex VI: the Club’sperspectiveCapt Yves Vandenborn

Director of Loss Prevention

The Standard Club

2

Contents

01 Requirements under MARPOL Annex VI

02 Existing & Potential Emission Control Areas

03 Global & ECA Sulphur limits

04 Enforcement in the EU

05 Enforcement in the US

06 Ship’s Documents for Compliance

07 Loss Prevention Advice

08 Prevention Culture

09 Conclusion

Requirements under MARPOL Annex VI

3

– w.e.f. 1 Jan 2015, ships trading in designated emission control areas (ECA) have touse fuel oil with sulphur content ≤ 0.10%

– this includes use of fuel oil for the main and auxiliary engines as well as the boilers

– prior to entry into ECA, it is required to have fully switched-over from any high sulphurfuel in use to the ECA compliant marine fuel

– to have on board implemented written procedures as to how the switch-over isundertaken

– recording quantities of the ECA compliant fuel oils on board at each change-over,together with date, time & position in a logbook prescribed by the ship’s flag state

Existing & Potential Emission Control Areas

4

Global & ECA Sulphur limits

5

Outside an ECA Inside an ECA

4.50% m/m prior to 1 January 2012 1.50% m/m prior to 1 July 20103.50% m/m on and after 1 January 2012 1.00% m/m on and after 1 July 2010

0.50% m/m on and after 1 January 2020* 0.10% m/m on and after 1 January 2015

* depending on the outcome of a review, to be concluded in 2018, as to the availability of the required fuel oil, this date could be deferred to 1 Jan 2025

Enforcement in the EU

6

– Key amendments to EU 2012/33 aligns the EC Directive with revised Annex VI

– The 0.5% limit outside EU-SECAs will apply in EC waters from 1st January 2020,regardless of the outcome of the IMO fuel availability (review of which is due by 2018)

– Strict enforcement & inspection by PSC in all EU ports (particularly by GermanMARPOL police), where they check change-over against FOBAS calculator

– If non-compliance is noted then the authority may ask ship to:- present a record of the actions taken to attempt to achieve compliance; and

- provide evidence that it attempted to purchase ECA compliant marine fuel

– Level of fines is yet to be ascertained; BUT

– Fines are specifically aimed to deprive the economic benefits derived from theinfringement. Fines are to gradually increase for repeated infringements

Enforcement in the US

7

– More extensive than EU-SECA (cover SOx, NOx and PM emissions)

– USCG has authority to detain vessel on MARPOL violation

– Violations under MARPOL Annex VI may result in civil or criminal penalties

– EPA may impose a civil penalty of $25,000 per violation. If the violation continuesthere will be an additional penalty of $25,000 per day

– Within Californian waters, ships also need to comply with the CARB-OGV fuel rule

– Two differences between NA-ECA & CARB-OGV fuel rule:- MARPOL does not specify the type of fuel to be used other than stipulating sulphur content

≤ 0.1%. CARB-OGV requires use of distillate fuel oil (not residual fuel oil)

- MARPOL permits the use of alternative emission control technologies (exhaust gasscrubbers). CARB-OGV does not recognize the use of such technology

Ship’s Documents for Compliance

8

Vessels need to retain on board:

– Oil Record Book

– Bunker samples

– Bunker quotation/correspondence

– Voyage plan

– Bunker Delivery Note (BDN)

– Fuel Quality Test report

– Notification to Flag, Port Authority & PSC (if obtainingcompliant fuel may cause deviation or delay)

To comply, members must plan ahead to:

– Ensure sufficient storage arrangements for quantity and segregation of fuel grades

– Check quality of ECA compliant fuel

– Check machinery operation when changing fuel for issues relating to lubrication ofpumps and nozzles, generator starting problems, fuel oil leakage, and delayed pick-up(engine speed)

– Plan when to switch fuel types, due to risk for potential loss of power (i.e. blackout)

– Document switch-over and quantities of fuel grades prior entering ECA

Further information on specific technical requirements is recommended to checkwith Recognized Organization/Class and relevant Flag/Port State authority

9

Loss Prevention Advice

Prevention culture

10

– Produce procedures and guidance for ships

– Implement “Zero pollution” culture throughout the company

– Strengthen company’s Environmental Compliance Policy

– Continuous training onboard & ashore

– Brief crew on implications related to falsification of records and Marpol violations

– Establish a robust monitoring regime

– Report incidents which may result in a penalty

Conclusion

11

– Increase in the number of incidents andfines related to MARPOL violations

– As requirements are becoming more strictthere are more vessels being detained

– MARPOL violations: discretionary cover

The Standard Club Ltd is regulated by the Bermuda Monetary Authority. The Standard Club Ltd is the holding company of the Standard Club Europe Ltd and the Standard Club Asia Ltd. The Standard Club Europe Ltd is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. The Standard Club Asia Ltd is regulated by the Monetary Authority of Singapore.

Charles Taylor Services Limited (CTS) is authorised and regulated by the Financial Conduct Authority to carry out general insurance mediation activities for commercial clients. For more details please see www.fsa.gov.uk/register/home.do or call the FCA on 0845 606 1234. CTS is a wholly owned subsidiary of Charles Taylor Holdings Limited. The ultimate parent and controlling company is Charles Taylor plc.

Regulatory status

@StandardPandIThe Standard P&I Club

www.standard-club.com

@ctaylorplcCharles Taylor plc

www.ctplc.com