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PREVENTION OF POLLUTION FROM SHIPS – EMISSION STANDARDS

BACKGROUND

Work by the IMO on the prevention of air pollution from ships led to the adoption of the Protocol of 1997 to the MARPOL Convention.  The Protocol added a new Annex VI to the Convention containing the Regulations for the Prevention of Air Pollution from Ships.  Annex VI provides for a progressive reduction in sulphur oxide (SOx) and nitrogen oxide (NOx) emissions.

Since 1 January 2015 Regulation 14 of Annex VI has required that the sulphur content of fuel oil burned within Emission Control Areas (ECAs) shall not exceed 0.10% m/m. There are currently four ECAs designated under MARPOL, namely the Baltic Sea,  North Sea, North America and US Caribbean Sea areas.

Until 2020 Regulation 14 permits ships outside ECAs to burn fuel oil with a  sulphur content not exceeding 3.50% m/m unless the ship is using scrubbers.  However, as from 1 January 2020, unless local regulations stipulate stricter standards, all fuel oil burned by ships outside ECAs will be required to have a sulphur content not exceeding 0.50% m/m except where the ship is using an approved Exhaust Gas Cleaning System (usually referred to as scrubbers).

Regulation 18 of Annex VI states that a bunker delivery note confirming the sulphur content of all fuel oil supplied to the ship shall be kept on board for 3 years from the date of supply.

Members are advised to ensure that all ships shall be compliant with these regulations.

In order to be compliant, Members have the following options:

  • Switch to a low sulphur fuel oil with the correct sulphur content;
  • Switch to an alternative source of fuel (e.g. LNG);
  • Install scrubbers on board the ship.

LEGAL ISSUES

All charter parties entered into for delivery after 1 January 2020, or where re-delivery may take place after 1 January 2020, should include terms to reflect these regulations. If existing charter parties could continue beyond 1 January 2020 consideration should be given to amending the terms to deal with the impact of the regulations, bearing in mind common charter party terms relating to the obligation to use and supply fuel that is compliant with international and national regulations and the requirement under a clause paramount that Owners must exercise due diligence to ensure that the ship is seaworthy at the start of any voyage performed under the charter, which includes the ability to comply with relevant regulations such as using fuel oil with a low sulphur content.

In order to deal with these issues BIMCO has published the following two clauses:

The 2020 Marine Sulphur Content Clause replaces the BIMCO Fuel Sulphur Content Clause 2005 and can be incorporated into charter parties straightaway.  The clause is intended primarily to deal with the new sulphur content regulations and should be used in conjunction with other existing time charter bunker clauses dealing with the specifications, grades and quality of fuel provided by charterers such as those in BIMCO’s Suite of Standard Bunker Clauses for Time Charter Parties.

The 2020 Fuel Transition Clause is for use in time charters in which the ship will be under charter for a period spanning the introduction of the new sulphur content regulations, i.e. either side of 1 January 2020. This clause is intended solely to deal with the new sulphur content regulations and, again, should be used in conjunction with existing time charter bunker clauses.

In addition to the BIMCO clauses, INTERTANKO has issued a Bunker Compliance Clause for Time Charter Parties.  The INTERTANKO  clause is longer and more detailed than the BIMCO clauses.  It is intended to be a stand-alone clause dealing not only with MARPOL Annex VI and other regulatory requirements but also fuel quality issues and industry best practice.

The BIMCO and INTERTANKO clauses are primarily intended to be used by ships that have not installed scrubbers which permit them to use fuel oil with a sulphur content exceeding 0.5% m/m after 1 January 2020.  INTERTANKO is considering whether it would be helpful for the industry to also be provided with a model charter party clause for scrubbers bearing in mind specific issues that may arise in relation to their use, e.g. restrictions at some ports on the use of open loop systems, disposal of residues and issues in relation to maintenance of scrubber mechanisms.

General advice on issues relating to ship emissions can be found at the following links:

US Environmental Protection Agency (EPA)

United States Coast Guard (USCG)

Frequently asked questions: North American Emission Control Area (ECA) U.S. Coast Guard Office of Commercial Vessel Compliance

US Department of Homeland Security

US Department of Homeland Security, MARPOL Annex VI webpage

European Maritime Safety Agency (EMSA)

EMSA Air Pollution

IMO FAQs and guidance

International Chamber of Shipping (ICS) / European Community of Shipowners’ Association (ECSA)

Industry Guidance on Compliance with the Sulphur ECA Requirements:

  • Assistance to Ship Owners, Operators and Crew
  • ICS Compliant Fuel ‘Non-Availability’ Report Template
  • Paris MoU Letter and Guidance on PSC of Sulphur ECAs

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