Introduction of IBIA’s BDN comment paper to MEPC 71

Below is the statement made by IBIA in connection with introducing our submission to the 71st session of the Marine Environment Protection Committee. The paper was introduced on the first day of MEPC 71.

Chair, distinguished delegates. Before adopting the amendments to Appendix V of MARPOL Annex VI concerning the information to be included in the bunker delivery note (BDN), let us remind ourselves why we are doing it, and how we are doing it. There is no question the intent is well founded, but our industry anticipates that there will be negative and unintended consequences unless we address the how.

The amendment has become necessary because the current supplier’s declaration prevents the supply of fuel with sulphur exceeding that of regulation 14.1 to ships. At present, with the limit at 3.5% sulphur, that isn’t really an issue, but when the limit drops to 0.5% it would make abatement technology pointless. So a change is clearly needed to resolve this impasse.

The solution we are being asked to adopt is the introduction of a tick box system where the third tick box allows for supply of fuel that meets the purchaser’s specified sulphur limit rather than the regulation limits. It also requires that the supplier’s representative declares this is done on the basis of a notification from the purchaser that the fuel is intended to be used either in combination with an equivalent means of compliance, or that the receiving ship is subject to a relevant exemption to conduct trials of abatement technology.

Ironically, this solution creates a similar impasse to the one that the new text aims to resolve. Come 2020, we must be prepared for the eventuality that there will be times when compliant fuel is not available in some ports. What happens if a ship, with no scrubber, finds itself in a remote port, and it needs fuel to sail to its next port, but only high sulphur fuel is available? The text in the BDN would then prevent the supply of fuel to this ship because it requires the supplier’s representative to declare that they were notified that the ship has a scrubber or is trialling one.

Distinguished delegates, this impasse may be discussed under the scope of the intended new output on “Consistent implementation of regulation 14.1.3 of MARPOL Annex VI”, but the Committee has an opportunity to address it now, and thereby reduce what is expected to be a significant workload.

Let us also remind ourselves what MARPOL Annex VI actually regulates. The regulation does not ban the sale of high sulphur fuel to ships; it only regulates the use of it. It is up to the ship to order and use fuel compliantly, the supplier’s responsibility is simply to provide fuel meeting the sulphur limit specified by the purchaser.

Why, then, does the text that is up for adoption place a requirement on the supplier to justify the sale of a fuel oil with a sulphur content that doesn’t match the regulatory limits? It is not up to the supplier to police the ship’s compliance strategy. Requiring the supplier to obtain a notification from the purchaser regarding their intentions for how the fuel is used only serves to increase the administrative burden on all parties without achieving genuine benefits because, at the end of the day, only the ship can prove to the relevant authorities that it has the ability to achieve equivalence with the relevant sulphur limits.

There is a very simple solution to addressing both of these issues, namely to delete the text specifying the conditions for the supplier to provide fuel with a sulphur content that is different from limits specified under the first two tick boxes. Moreover, this would also allow the buyer to use the 3rd tick box to specify a 0.50% sulphur limit ahead of 1 January, 2020, thereby also making the document helpful when ships are preparing to comply with the upcoming lower sulphur limit.

On a separate matter, we propose to improve the clarity of the text and reduce room for misunderstanding and ‘tick box error syndrome’ which could cause the ship’s documentation to fail to comply with MARPOL Annex VI and render the ship liable to non-compliance actions. We think it would be helpful to add the actual sulphur limits next to the first two tick boxes 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”. To draw a parallel, road speed limits are signposted with the actual limit number in km/h or miles/hour. It would not be very clear or helpful if the signpost only told you that the speed limit on this road is in accordance with a regulation number.

You may also have noted that our document provides some alternative text in square brackets, proposing that a counter-signature on the BDN by the ship’s representative may be an effective enforcement tool. We have since learnt that this may constitute a new regulatory requirement and as such should not be discussed now, but it may be an idea for the Committee’s upcoming considerations under the new output on effective implementation.

Ladies and gentlemen, I apologise for the long introduction to our paper, but this is the final stage before the new text is adopted and we respectfully ask the Committee to consider three separate issues before doing so. Firstly, the incompatibility of the new text with non-availability situations which we must prepare to deal with after the 1st of January 2020, secondly the fact that the text asks the supplier’s representative to declare something only the ship’s representative can actually vouch for, and thirdly, that we should endeavour to make the text clearer by adding the sulphur limits associated with regulation 14.1 and 14.4 next to the relevant tick boxes.

If the Committee believes that any of these three issues merits consideration, we would suggest that you allow the working group on air pollution & energy efficiency to take a final look at the text as a matter of priority today, before we start work on agenda item 5 and 6 tomorrow, and before handing it to the drafting group to finalise a text that the Committee can adopt.

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