IBIA update: Various views emerging at IMO on implementation of the 0.50% sulphur limit

IMO HQ London

What can the IMO do make sure that the 0.50% sulphur limit is implemented in an effective, fair and safe manner globally? Discussions at the January session of the IMO’s Sub-Committee on Pollution Prevention and Response (PPR 4) gave us some signals on the thinking and the ideas we may expect to hear more about in the discussions that lie ahead of us.

What emerged from PPR 4 is just the start of this work, as explained in our article “IMO’s work on 0.50% sulphur limit implementation gets underway”.

Under the surface of that outcome are a number of ideas, and opposing views, on the nature of the challenge ahead and how to address it.

The question the International Maritime Organization must try and find and answer to between now and 2020 is how to ensure the transition from the global 3.50% sulphur limit to the 0.50% limit is successful.

There seems to be different schools of thought regarding the challenges ahead.

One the one hand we have “hardliners” who will not accept any excuses or suggestions for smoothing the transition that in any way may fall short of full, strict global implementation and compliance with the new sulphur regime from day one.

On the other hand are those who are concerned about the ability of refiners in their country to provide sufficient low sulphur fuels for both shipping and other sectors in 2020, often the same countries that told the 70th session of the Marine Environment Protection Committee (MEPC 70) that they would rather delay the 0.50% sulphur limit to 2025. They may be looking for some form of regional or country-by-country differentiation in implementation.

In between these two ends of the spectrum are IBIA and other industry organisations represented at IMO, and several countries. IBIA told PPR 4: “We all know what we need to strive for, namely for the entire global fleet to use either low sulphur fuels or technologies that achieve equivalent emissions reductions from the start of 2020.” But IBIA and others told PPR that even if everybody do their utmost to comply in 2020, it seems prudent to put in place contingency measures to deal with potential problem areas. On the one hand, we should avoid penalising ships due to genuine shortages of compliant fuels, and on the other, avoid a situation where it pays to avoid complying because of lacking checks and balances.

The “hardliners” tend to play down any potential problems such the risk of initial regional shortages of compliant fuels, because you can transport products from one region to another. They are also unwilling to 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. They also argue that the transition won’t be sudden because we have three years to prepare and get the products in place. They often highlight that the transition to the 0.10% sulphur limit in emission control areas (ECAs) went well, which should give us confidence that introducing the 0.50% will also be plain sailing, including the introduction of new fuel blends.

The only point everybody seems to agree on is that we need measures in place to make sure ships will be compelled to comply, because without it there is a risk that non-compliance will create significant commercial distortion and an uneven playing field.

Concrete suggestions

During discussions at PPR 4, a few concrete suggestions came up.

Two papers submitted to PPR 4 proposed making it an offense for a ship to carry high sulphur fuel oil (HSFO) in its fuel tanks unless that ship has a certified scrubber or approved exemption.

One suggestion that came up took that idea a step further, namely to implement a ban both on the carriage and sales of HSFO to ships without scrubbers or valid exemptions from the start of 2020, to make the MARPOL Annex VI regulation as simple as possible to implement and enforce. Included in this idea was that suppliers would be required to see evidence that the ship has an approved scrubber or exemption (e.g. check the ship’s IAPP certificate) before being allowed to sell HSFO to any ship.

Some think a HSFO carriage prohibition won’t be necessary, however, because strict enforcement by port state control officers (PSCO), including document checks and fuel sampling, will be enough to prevent ships without scrubbers from carrying and using HSFO.

Another suggestion that came up was that bunker ports can put out official information to IMO ahead of 2020 about whether they will be able to supply compliant fuel or not, so owners can plan their fuel purchasing so as not to be caught out without ability to buy compliant fuel.

One concrete idea put forward by IBIA and IPIECA in papers submitted to PPR 4 was to allow ships awaiting scrubber installations exemption from full compliance with the 0.50% sulphur limit for a limited period. Allowing this, though with strict caveats such as still having to observe the ECA requirements and use low sulphur fuels while in port or close to shore, could alleviate installation bottlenecks and ease demand pressure on 0.50% sulphur fuels at the start of 2020. This proposal was, however, widely objected to, including by shipping industry organisations out of fear it would interfere with a level playing field.

There is one aspect that there is wide agreement on, however, which is the need for developing a draft standard format for reporting non-availability as provided in regulation 18.2.4 of MARPOL Annex VI that may be used to provide evidence if a ship is unable to obtain compliant fuel. This was among the proposals in IBIA’s submissions both to MEPC 70 and PPR 4.

Other suggestions made by IBIA and others, relating to making use of existing IMO tools for reporting and information sharing, were not discussed at PPR 4, and remain in the “idea bank” for now. We can probably expect several other deposits into this “idea bank” at upcoming IMO meetings, but first MEPC 71 has to approve the initial scope outlined at PPR 4. Then the work can begin on identifying and building consensus on the ideas that can help ensuring the world is adequately prepared to successfully implement the 0.50% sulphur limit.

Report by Unni Einemo

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