Q&A: Rotterdam’s bunker licence
On 1 February 2021, the Port of Rotterdam introduced a mandatory licence requirement for bunkering vessels. Ron van Gelder, working as a senior adviser for the Harbour Master Division, has been the key architect behind it. IBIA’s Unni Einemo discusses the development with him.
UE: First of all, can you tell us which areas are covered by the Port of Rotterdam bunker licence for bunker fuel transporters?
RVG: In addition to Rotterdam the licence is also valid in the ports of Vlaardingen, Schiedam, Dordrecht, Papendrecht and Zwijndrecht.
UE: How many licenses have been issued so far, and do you expect more applications coming through?
RVG: At the moment we have issued 28 licences and we do not expect many more. The licences cover around 157 bunker facilities (barges), which is more or less consistent with the number of issued licences by the port of Antwerp, who issues licences per barge.
UE: Given the proximity to other bunkering ports, is there a risk that bunkering vessels that are not licensed make deliveries in your area of jurisdiction? How can you ensure that only licensed vessels perform bunkering operations?
RVG: Given the fact that (almost) every bunker barge is licensed we do not expect this to happen. But barges come and go and also, they often change trade, so it is possible that a barge is not reported to the port authority or that a bunker transporter is not licensed. Barges are ‘marked’ as a bunker facility and are as such recognizable on our live situation port map at the Harbour Coordination Center and on the patrol vessels.
UE: The initial licences are valid until 1 February 2023, by which time there will be a review to evaluate the extent to which the licence and the regulations need to be amended in response to the experience gained. Does this mean any further licences issued during 2021 and 2022 will also be valid until 1 February 2023?
RVG: That is correct, as I stated before, we do not expect to have many more requests for a licence. The short interval for the licence is so we can see what the impact is, assess if it works and what we can do to improve it. Which doesn’t mean that after 2023, the licence cannot be adapted further, if this is required.
UE: What happens if anyone breaches the terms of the licence? Can you, for example, cancel or suspend a licence, or impose other types of penalties, and what type of breaches would lead to sanctions against the supplier? Would a bunker licence holder be able to appeal such decisions?
RVG: We are at the moment working on a (internal) directive for our supervisors and inspectors for which transgression is what measure appropriate. The measures will be from a ‘simple’ fine up to the utmost: revoking a licence. This is obviously the most severe intervention we have and this will not be used lightly. In fact, we hope this will not be necessary at all. If we have to revoke a licence, the former holder may appeal the decision of the Harbour Master in a court of law.
UE: You have set up a reporting centre allowing all relevant parties in the bunker chain to submit complaints. Your stated aim is to use information received to better monitor and trace where discrepancies are, and further improve transparency in the bunker chain in the future. How will you use the information received? Will it be only to evaluate the need for changes in the licensing scheme, or can it lead to action against a licence holder for malpractice?
RVG: The setup of the centre is to learn if the license is helping in getting the bunker chain more transparent and get the number of disputes down. So, the primary objective of the reporting centre is to evaluate and adjustment of the licence.
UE: You have developed a complaint form, which will be treated confidentially and will not be shared with third parties. What is the process when a complaint is filed? Would you follow up with a party that has had complaints filed against them?
RVG: The objective of the complaint form is foremost to substantiate changes relating to the license. The complaints will be classified into categories of quantity, quality, sampling, surveying and other. Each category will be subdivided into the nature of the complaint and the possible solutions. Unless we have a reason for clarifying the report, we will not respond to the complaint or intervene in any disputes.
UE: During your consultation, you found great consensus between the wishes of the stakeholders on the need for a bunker transporter licence, but on some points, there was disagreement, including making mass flow meter (MFM) systems mandatory. What were the objections to making MFMs mandatory?
RVG: The obligation of a mandatory MFM would have a significant impact on the bunker market. We are convinced that the MFM could make a major contribution to reducing the number of protests concerning quantity. However, the bunker transporters claim that this is not necessary, if the regular ways of measurement are properly handled. In order to substantiate the claim (either way) we hope to have evidence which will prove the way forward, with or without MFM.
UE: Are you concerned by claims that bunker suppliers are selling fuel for less than it is being traded FOB?
RVG: No, after all it is a free market. If you want to sell something that costs you more, that’s up to the seller. What we are concerned about is that if fuel is sold for less, and also delivered for less, and then the surplus is sold on the black market. That will be stealing or fraud and that is a criminal offence. However, that has not been proven at any time, only rumoured or by hearsay.
UE: How likely is it that MFMs are made mandatory in the future?
RVG: Depending on the number of (substantiated) complaints or reports which can be directly connected to the quantity and the current way of measurement on barges, we can mandate the MFM. Again, only if the complaints can be substantiated with evidence that if a MFM was used the quantity difference would be less / non-existent.
UE: Do you expect the same licensing system to be introduced in other ports in the region, such as Amsterdam and Antwerp? If this doesn’t happen soon, do you think Rotterdam will be advantaged or disadvantaged in terms of its attractiveness as a bunkering port?
RVG: The licensing of the bunker market will be concentrated in two parts: quantity (bunker transporter) and quality (bunker supplier). We decided to focus at the start of the process on the bunker transporter. We have been in close consultation with the port of Antwerp and, at the start of the project, with the port of Amsterdam, throughout the process. The port of Amsterdam indicated that if only the quantity is addressed, they opted out of the process, until we will address the licence for suppliers. We will start this project this year. As for the port of Antwerp: they already have a kind of licence for bunker barges, and they are striving for the same principles as we do. However, the organisation of competent authority concerning the addressed conditions in the license(s) is totally different, then in the Dutch ports. If the port will have an advantage over other ARA ports that do not have (a more elaborate) bunker licence remains to be seen, it was/is not our intention. Our focus is solely on creating an effective bunker licence.
UE: In Singapore, there has been significant consolidation in the bunker sector over the past few years. Do you expect this to happen in the ARA region as well?
RVG: We do not foresee a huge restructuring of the bunker market in ARA at the moment. There is no significant change or condition that an applicant must invest in. That may however change in the future if the MFM will be mandated, though I doubt it.
UE: Work is going on at the IMO to draft an “indicative example” of a bunker licensing scheme that can be used as a framework by member States for voluntary adoption. What do you think of this? Is it possible to draft a “one size fits all” framework?
RVG: A ‘one-size-fits-all’ for all ports is wishful thinking, and would be nice. However, most ports are structured in different ways, so a framework or guidance on what the licence should contain would be the most fitting proposal. As you know we are also in consultation with IBIA to see if we can share our experiences with the development of the licence with other (major) bunker ports. It would be nice for the shipping industry to have one standard practice on bunkering in a safe and sound way in ports.
UE: Setting up the Port of Rotterdam bunker licensing system was a large and complex task. To what extent were you able to draw on the examples set by Singapore and Gibraltar?
RVG: We had extensive interviews with Gibraltar and Singapore. Both ports are managed differently than the port of Rotterdam. Both Gibraltar and Singapore are quite strict on sampling and, Singapore in particular, on quantity by MFM. From both ports we copied the suggestion of a reporting centre. The interviews were mostly focused on how do you perform checks, how did you implement the licence, what were your experiences with the licence, and what were the lessons learned. Both issues, sampling and quantity, are addressed in the licence, and we are monitoring the complaints closely in order to adjust the license if necessary.
UE: The licence is currently centred on the bunker fuel transporter. Can we expect other parties in the bunker supply chain to be subjected to licence requirements in the future? And would it be local, like the Rotterdam bunker transporter licence, or perhaps national?
RVG: As said before, we are now setting up a project team for the (local) licence for bunker suppliers. The focus of this license will be on quality and reliability. Specific requirements for quality in bunker fuel are somewhat lacking, other than flashpoint or sulphur content, there is no legal requirement on the fuel. Next to these obligations there is only the (non-binding) ISO 8217 standard. If the ISO standard is mentioned in the licence it can and will be enforced in the port. We are also looking to take a further step to include the list of undesirable substances (We have a list on our website).
UE: The Rotterdam bunker licence for bunker fuel transporters covers the bunkering or debunkering of residual fuels and distillates (fuel oil and diesel) and biodiesel. Can a similar licence be used for other types of fuel in the future, as the industry moves toward low or zero-carbon fuels?
RVG: Licensing is not a primary goal of the Port Authority; there must be a motivation to do so. In case of LNG bunkering, there is a safety aspect involved, in regular, conventional fuels an environmental and transparency aspect. With other fuels it remains to be seen if a licence is necessary.
*This article was originally published in the Q1, 2021 issue of World Bunkering, IBIA’s official magazine.