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MARINE LAW SPECIALIST ADVISES ON FUEL ISSUES AND HFO CARRIAGE BAN

Thursday, January 30, 2020 

According to law specialist Hill Dickinson, the transition to low sulphur fuels has so far been smooth, thanks to the efforts of shipping industry stakeholders in preparing for the change, but issues are arising over the margin for error in testing the sulphur content and the presence of sediment is causing concern.

And, as the 1st March deadline for part two of the regulations looms, the legal expert advises ship operators to start planning now to debunker any remaining high sulphur fuel in good time. Beth Bradley (pictured), London-based Partner at Hill Dickinson, said: “It is nearly a month from the implementation date of Regulation 14.1.3 of Marpol Annex VI and, while it is too early to draw firm conclusions, a couple of themes are emerging as a result of the change.”

Regulation 14.1.3 Marpol Annex VI, which lowers the sulphur content for marine fuel for use on board vessels not fitted with exhaust gas cleaning equipment from 3.5% m/m to 0.50% m/m, took effect on 1 January 2020, while Regulation 14.4.3 Marpol Annex VI limiting sulphur content to 0.10% m/m in Emission Control Areas remains in place. This is in no small amount attributable to the efforts of the key stakeholders (owners, charterers, insurers and bunker suppliers) to prepare to be compliant as of 1 January 2020.

But it is only part of the picture, warns Bradley, explaining that issues relating to the sulphur content of fuel, as well as the quality of some blended low sulphur fuels, are already arising. Where bunkers are found to be marginally in excess of the limit, problems are arising largely owing to the difference between Regulation 14.3.1 and most supply contracts. An on-specification supply for sulphur content will, usually, from a suppliers’ point of view be deemed to be up to 0.53% m/m, since that reflects the laboratory margin of confidence for testing.

“As a result, a time consuming and costly stand-off can occur while the sulphur content issue is resolved and decisions made regarding whether to de-bunker and obtain alternative bunkers,” said Bradley.

Over the past four weeks there have been a number of alerts issued concerning sediment issues, in particular, in low sulphur fuels supplied in Singapore, Piraeus, Amsterdam, Rotterdam, Miami and San Vincente. Problems resulting from sediments can ranges from sludging of filters to engine damage and blackouts in the worst circumstances.

Bradley said: “The spread of alerts concerning sediment, suggests a potentially wider issue concerning the stability of some blended low sulphur fuel. Liability, depending on the reasons for sedimentation, may not be straightforward. While charterparties and bunker supply contracts will contain a specification for the fuel, usually by reference to the ISO 8217 standard, some organic compounds which cause sedimentation may not be caught by the Table Two parameters (although the issue may be caught by clause 5.3 of ISO 8217).”

Hill Dickinson outlines that, from a practical point of view, the usual advice to owners applies:

  • ensure that they have clean bunker tanks
  • avoid co-mingling of bunkers, and 
  • monitor sampling during the supply

Bradley added: “Looking ahead, enforcement action and quality issues will remain live topics as the shipping industry adjusts to the sulphur cap. The next pinch point will be 1 March 2020 when the carriage ban takes effect. Owners have a little over a month in which to arrange to de-bunker high sulphur fuel and would be best advised to start planning those operations (if not already in hand) now, so as to avoid the consequences of missing the deadline.”

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