IBIA raises concerns about new BDN text at IMO

IBIA has submitted a document to the 71st session of the Marine Environment Protection Committee, highlighting concerns about new mandatory text to be included in the bunker delivery note (BDN). The text, which is due to be formally adopted at MEPC 71, amends the current supplier’s declaration to allow for supply of high sulphur fuel to ships equipped with abatement technology, and ships undertaking trials of such technology. While IBIA fully supports the need for amending the text, unfortunately the text that is up for adoption creates previously unforeseen issues relating to non-availability situations. Moreover, it lends itself to clerical errors, and creates confusion about the respective responsibility of suppliers and ships with regards to complying with MARPOL Annex VI.

The current BDN is required to contain “A declaration signed and certified by the fuel oil supplier’s representative that the fuel oil supplied is in conformity with regulation 14.1 or 14.4 and regulation 18.3 of this Annex.” Regulation 14.1 refers to the global limit, while 14.4 is the limit applicable in emission control areas (ECAs). This declaration therefore prevents the supply of fuel oil to ships exceeding the global limit, and this would clearly be a problem when that falls from 3.50% to 0.50% in 2020.

The new mandatory BDN text from the International Maritime Organization will replace the current supplier’s declaration and introduce a ‘tick box’ system as follows:

QUOTE:

“A declaration signed and certified by the fuel oil supplier’s representative that the fuel oil supplied is in conformity with regulation 18.3 of this Annex and that the sulphur content of the fuel oil supplied does not exceed:

□ the limit value given by regulation 14.1 of this Annex;

□ the limit value given by regulation 14.4 of this Annex; or

□ the purchaser’s specified limit value of _____ (% m/m). As completed by the fuel oil supplier’s representative and on the basis of the purchaser’s notification that the fuel oil is intended to be used:

.1 in combination with an equivalent means of compliance in accordance with regulation 4 of this Annex; or

.2 is subject to a relevant exemption for a ship to conduct trials for sulphur oxides emission reduction and control technology research in accordance with regulation 3.2 of this Annex.

This declaration shall be completed by the fuel oil supplier’s representative by marking the applicable box(es) with a cross (x).”

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If adopted at MEPC 71, this mandatory requirement is expected to take effect on 1 January, 2019.

Since the text was developed, the IMO has decided to implement the 0.50% sulphur limit in 2020. IBIA has identified problems with the new BDN format that creates previously unforeseen issues with the preparation for, and transition to, the 0.50% sulphur limit in 2020.

Looking ahead to 2020, it may be expected that, for a period, there will be times when compliant fuel is not available in some ports. Should a ship without abatement technology be in a port where it cannot obtain compliant fuel, but needs fuel to reach its next port, the BDN text up for adoption would, in effect, prevent a supplier with availability of higher sulphur fuel from delivering that fuel to the ship because it requires the supplier to declare that they were notified that the ship has a scrubber or a valid exemption while trialling abatement technology.

Another issue with the format is that, in order to comply with the 0.50% sulphur limit with effect from 1 January 2020, ships will need to start buying compliant fuels in advance. The first tick box as drafted refers only to regulation 14.1 and hence it only guarantees the regulation limit value on the date of delivery, i.e. 3.50% prior to 1 January 2020. This will render the document without any statutory value for ships preparing to comply with the 0.50% limit prior to the deadline.

There is a very simple solution to both of these problems, which would be to delete the text specifying under which conditions the supplier can provide fuel with a sulphur content that is different from limits specified under the first two tick boxes. That would allow the buyer to specify a 0.50% sulphur limit in the third tick box ahead of 1 January, 2020.

Moreover, by not specifying the conditions under which supply of higher sulphur fuel may be justified, the document does what it needs to do, which is to demonstrate the sulphur content of the fuel provided to the ship. Under the current regulation, it is the purchaser’s/ship’s responsibility to order and use fuels in compliance with MARPOL limits. There is no obligation on the supplier other than to provide fuel that meets the sulphur limit specified by the purchaser and that conforms to regulation 18.3 of Annex VI.

IBIA’s paper to MEPC 71 stresses that the BDN declaration is the supplier’s responsibility; hence it is problematic for the supplier’s representative to sign a declaration providing reasons for supply of fuel with sulphur exceeding 0.50% which only the vessel can actually vouch for.

If the object of the BDN is to demonstrate to port state control that the ship had reason to purchase fuel oil that does not meet regulatory sulphur limits, adding text to the BDN that the supplier has been ‘notified’ that the ship intends to use the fuel with a scrubber is not sufficient to prove that the ship is compliant. Only the ship can prove this by providing the relevant documentation to inspection authorities, such as the supplement to the International Air Pollution Prevention Certificate, or notification that it is subject to a non-availability situation which it must report to relevant authorities in line with the provisions of Regulation 18.2 of MARPOL Annex VI.

The only party that can rightfully declare that the ship is permitted to use a higher sulphur fuel is the ship’s representative. Hence, IBIA has proposed that the IMO might want to consider asking for a counter-signature on the BDN by the ship’s representative that the ship is permitted to use a higher sulphur fuel in accordance with the relevant provisions of Annex VI.

IBIA is also asking that the BDN should specify the actual sulphur limits next to the first two tick boxes. This is because, although the shipping and bunkering community is very familiar with the global and ECA sulphur limits, many are not familiar with the meaning of “regulation 14.1” and “regulation 14.4”. Inserting the relevant sulphur limits next to the regulation numbers would make the document clearer and reduce the risk of clerical errors. If mistakes are made when filling in the tick boxes, the ship’s documentation would fail to comply with MARPOL Annex VI and this could render the ship liable to non-compliance actions.

When the draft amendments to the text on the BDN were up for approval at MEPC 70 in October last year, IBIA raised concerns in document MEPC 70/9/4, and proposed amendments addressing them. These were rejected because of concerns that one element of the proposal would increase the administrative burden for ships. By removing that element, IBIA remains convinced that the proposal put forward to MEPC 70 has merit, while the format up for approval risks increasing the administrative burden on all parties without achieving genuine benefits, as well as create further complications during the initial phases of the new 0.50% sulphur regime.

IBIA realises that it will be extremely difficult to get MEPC to agree to amend the BDN text that is up for adoption, but feels it is our obligation to highlight concerns raised by our members. IBIA will also stress that the Committee has an opportunity to resolve issues expected to arise around the transition to the 0.50% limit by adopting a BDN text that doesn’t specify the exact conditions under which the supplier may provide high sulphur fuel to a ship. If the text is adopted as it is, it will add to the workload to be undertaken on consistent implementation of the 0.50% sulphur limit under MARPOL Annex VI.

Below is the BDN format proposed by IBIA:

QUOTE:

A declaration signed and certified by the fuel oil supplier’s representative that the fuel oil supplied is in conformity with regulation 18.3 of this Annex and that the sulphur content of the fuel oil supplied does not exceed:

□ 3.50% m/m until 31 December 2019, 0.50% m/m thereafter as per the limit values given by regulation 14.1 of this Annex; or

□ 0.10% m/m as per the limit value given by regulation 14.4 of this Annex; or

□ the purchaser’s specified limit value of _____(% m/m). As completed by the fuel oil supplier’s representative.

This declaration shall be completed by the fuel oil supplier’s representative by marking the applicable box with a cross (x).”

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