IBIA commentary: IMO’s work on 0.50% sulphur limit implementation gets underway

The January 16-20 session of the Sub-Committee on Pollution Prevention and Response (PPR 4) agreed on broad principles for what needs to happen to successfully implement the upcoming 0.50% sulphur limit, meaning much work lies ahead to thrash out the details between now and 2020.

PPR 4 had been tasked by the 70th session of the Marine Environment Protection Committee (MEPC 70) to identify “justification and scope for a new output on what additional measures may be developed to promote consistent implementation of the 0.50% global sulphur limit,” and report back to MEPC 71. A “new output” means adding items to the IMO’s agenda that require a result.

The scope was deliberately drafted to be general and quite vague, to accommodate opposing views and prevent discussion at PPR 4 from getting bogged down in detail, otherwise there was a risk that PPR 4 would fail to agree on a draft to send to MEPC 71 for its consideration. Specific ideas put forward to PPR 4 for measures to help the transition to the new low sulphur regime, including several from IBIA, have neither been excluded nor included at this stage.

The IMO Secretary General singled out the work to ensure a smooth implementation of the 0.50% sulphur limit as being “among the most important work” for PPR 4 in his opening speech. (Full speech here: http://www.imo.org/en/MediaCentre/SecretaryGeneral/Secretary-GeneralsSpeechesToMeetings/Pages/PPR-4-opening-.aspx)

PPR 4 had a plenary debate on the first day of PPR 4 (Monday 16 January), where six submissions, including one from IBIA, were presented and briefly discussed before the task of “identifying justification and scope” was put to a working group (WG) that reported back to plenary on Friday (20 January).

Justification for the work

The justification for a new output agreed at PPR 4 was based on a submission from Japan, PPR 4/20/4 which was in essence based on a widely supported submission to MEPC 70 last year; MEPC 70/5/2, a document IBIA contributed to and co-sponsored.

The decision taken by MEPC in October last year was based on an official IMO study concluding that there will be sufficient refinery capacity in 2020 to provide both the marine industry and the world in general with low sulphur fuels. Even if that is theoretically the case, IBIA and others believe the enormity of the transition from the 3.50% to the 0.50% sulphur limit presents a number of challenges.

Hence, IBIA put forward a submission to PPR 4 outlining challenges and ideas for dealing with them, which was introduced in plenary with these words: “We will depend on refineries and fuel formulators to provide the global fleet with huge quantities of a very different fuel than the high sulphur fuel oils they supply today. Unless there are government or commercial incentives for ship operators to start purchasing these more expensive 0.50% sulphur fuels well ahead of 1 January 2020, this shift will need to take place during a very restricted timeframe. That means we will be moving into unchartered territory because we have never seen a global product shift on this scale being required from refiners over such a short space of time. While we are confident that the marine fuel supply industry and abatement technology providers will do their utmost to get the required products to the market on time, it seems prudent to put in place contingency measures to deal with potential problem areas.”

There are many countries and industry association who share these views, but there are also a number of countries that will not acknowledge that the transition may be challenging from a supply standpoint, because the IMO study which MEPC 70 based its decision on said availability will be there. The argument also goes that the transition won’t be sudden because we have three years to prepare and get the products in place.

As such, the justification for new work to be done between now and 2020 drafted at PPR 4 does not refer to the very practical challenge of getting sufficient low sulphur products to the market in time.

There is, however one element that all parties at PPR 4 were able to agree on as justification for adding a new output to the IMO’s agenda. Due to the magnitude of the operational cost increase this regulation will lead to, without uniform implementation, compliant operators would be at a huge commercial disadvantage and it would be impossible to ensure a level playing field. This could result in the intended environmental benefit being weakened or lost.

PPR 4’s draft justification for a new output which will be sent to MEPC 71 also includes a point about how inconsistent implementation of the 0.50% sulphur limit would increase the difficulty for the marine fuel supply chain to plan effectively to meet global demand and for ship operators to assess the viability of investing in exhaust gas cleaning systems.

The draft justification also mentions the need to mitigate concerns about fuel quality and safety.

Scope of the work

The scope of the work proposed by PPR 4, which need to be completed during PPR sessions in 2018 and 2019, includes:

• Considering the preparatory and transitional issues that may arise with a shift from the 3.50% sulphur limit to the new 0.50% limit;
• Considering the impact on fuel and machinery systems that may result from the use of fuel oils with a 0.50% sulphur limit;
• Considering verification issues and control mechanisms and actions that are necessary to ensure compliance and consistent implementation;
• Developing a draft standard format (a standardized system) for reporting fuel oil
  non-availability that may be used to provide evidence if a ship is unable to obtain compliant fuel oil;
• Developing guidance, as appropriate, that may assist IMO member states and stakeholders in assessing the sulphur content of fuel oil delivered for use on board ship, based on the consideration of mechanisms to encourage verification that fuels supplied to ships meet the specified sulphur limit as stated on the bunker delivery note;
• Requesting ISO to consider the framework of ISO 8217 with a view to keeping consistency between the relevant ISO standards on marine fuels and the implementation of regulation 14.1.3 of MARPOL Annex VI; and
• Considering any consequential regulatory amendments and/or guidelines necessary to address issues raised or otherwise considered necessary to ensure consistent implementation of regulation 14.1.3 of MARPOL Annex VI.

Next steps

PPR 4 agreed to invite MEPC, subject to approval of the proposed new output, to develop a plan for the work to be carried out with a view to completion by 2019.

Recognising this won’t be easy, and PPR 4 in plenary agreed with the working group’s assessment that intersessional work will be required to complete the work.

Finally, PPR agreed to invite submissions to MEPC 71 commenting on the scope of the proposed new output, including suggestions for the workplan to be developed, and to invite further submissions to PPR 5.

IBIA has played an active part in the IMO discussions on the 0.50% sulphur limit, and consulted its members, other industry organisations and member states on the issue, and intends to continue to do so. If you have something to add to the debate, you can contact IBIA’s IMO representative by email: unni@ibia.net

Report by Unni Einemo
unni@ibia.net