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GARD ISSUES GUIDANCE ON FUEL COMPLIANCE STRATEGY

Friday, April 5, 2019 

Norwegian risk management specialist Gard, in its latest circular, reminds shipowners who have not gone down the exhaust gas scrubber route to take steps to manage the transition to low sulphur fuels.

It says that the choice between scrubbers or low sulphur fuels in order to comply with the IMO 2020 global sulphur limits is a commercial decision - neither is a 'best' option, but one or the other will prove optimal for particular ships and trading patterns.

Owners and charterers who opt for low sulphur fuels need to work with their counterparties to take appropriate steps.

Gard suggests using the BIMCO 2020 clauses. The 2020 Fuel Transition Clause for Time Charter Parties and the 2020 Marine Fuel Sulphur Content Clause for Time Charter Parties were published in December 2018 and provide an objectively ‘fair’ approach to apportionment of liability for some of the key issues arising out of the change in regulation.

It is additionally necessary to prepare a Ship Implementation Plan (SIP) and carry it out, including maintaining a record of its implementation onboard.  IMO guidance on the  use of SIPs has been issued as MEPC.1/Circ.878.  As a minimum, the plan should provide guidance on

  • how to segregate different fuel grades,
  • how and when to carry out compatibility testing, and
  • how and when to carry out tank cleaning.
  • Work with your counterparty.  If your charterparty is going to straddle the 1 January 2020 deadline, begin a conversation now with your owner/charterer. Come to an agreement as to how you will handle the cleaning of tanks, and the purging of all pipework and the fuel oil service system, of all HSFO residue.
  • Decide how and when tank cleaning will take place. Will it be during dry dock or whilst the vessel is in service?  If you intend to dry dock, make sure that it is booked well in advance of the 1 January 2020 deadline.
  • Identify what type of compliant fuel you intend to use and begin to source reliable suppliers. Seek advice from engine manufacturers prior to ordering and using new/unfamiliar types of fuel.
  • Brief the Master and crew. Make sure they are prepared for the 1 January 2020 deadline change and the processes that will need to be put in place in advance of that date. Make sure they understand the importance of the entire ship’s system being purged of any HSFO residues. Have a plan in place for any unforeseen breaches and make sure your Master and crew know what to do and how to complete any necessary paperwork, including the IMO Draft Report on Compliant Fuel Non-Availability.

The MARPOL 0.50% deadline will not be put back, says Gard. MEPC 74 is scheduled to take place between 13 – 17 May, to finalise the IMO’s response to some of the still unresolved 2020 issues.

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