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Sulphur 2020: Checkpoint for charterers.

With the imminent 1 January 2020 deadline approaching, we have produced the following guide to assist charterers in assessing a ship’s readiness for compliance with the new regulation.

 

With the clock ticking, Chris Hughes, LR's Global Lead, Shipping Markets, appointed in September, hopes to provide charterers and cargo interests with the tools to seek assurances that the right measures have been put in place to mitigate the risk of port detention due to non-compliance with MARPOL Annex VI Regulation 14.1.3.

Regulation 14.3.1 of MARPOL Annex VI sets a 0.50% max limit of the sulphur content in respect of all fuel oils used by any type of combustion machinery outside Emission Control Areas (ECA-SOx) from 1 January 2020, down from 3.50% m/m currently. In emission control areas (ECAs) the limit remains, as it has been since 1 January 2015, 0.10% m/m.

In the post 2020 bunker era, it is important to ensure that the fuel supplied to the ship is within the operational quality boundaries of the ship and is compliant for sulphur emission control. Equally, the ship consuming the fuel must ensure that the ship capability and any constraints are duly communicated to the bunker purchaser.

The respective responsibilities and liabilities of the owner and charterer for complying with MARPOL 0.5% sulphur regulations are defined by the CharterParty, and it is important that existing, and new charterparty clauses are updated to reflect the new regulations.

However, in this article, we will look beyond contractual obligations, at some of the critical questions a charterer, or equally a shipowner, may wish to address, to provide the them with greater confidence that the ship has put in place all the necessary mitigating measures to limit the risk of the ship being detained as well as ensuring safe operation.

It covers the period of switchover from high sulphur fuel oil (HSFO) to very-low sulphur fuel oil (VLSFO) leading up to 31 December 2019 and into 2020. The questions focus on the onboard capability and management of fuels.

1) Charter period and history

Does the charter period cover voyages outside the existing ECA?

Then 3.50% max S fuel oil would, from a statutory perspective, be OK.

Has the ship previously been detained or otherwise sanctioned by Port State Control (PSC) on MARPOL Annex VI issues?

If the ship has existing problems with compliance how will those impact on its ability to comply with the 0.50% max sulphur (S) requirements? Are those problems a result of external (i.e. poor fuel oil quality as supplied) or internal (i.e. inadequate fuel oil management onboard) factors?

2) Ship Implementation Plan status

Has the ship completed a Ship Implementation Plan (SIP) for switchover to 0.50% max S fuel oils, with consideration given to the guidance of IMO MEPC.1/ CIRC 878?

While not a statutory requirement such a plan is nevertheless essential in undertaking the switchover, plans may vary in detail and scope, but all need to have the same end point of the ship operating only on 0.50% max S fuel oil no later than 00:00 on 1 January 2020.

Has the ship included in its SIP a fuel tank 0.50% switchover capacity plan?

This should include tank preparation/ cleaning as required and removal of remaining HSFO; all within in an agreed timeline.

Has the fuel oil switchover process, as given by that SIP, commenced?

Even if not commenced at this time, or for the duration of the charter, it may nevertheless impact on the quantities of 3.50% max S fuel oils that the ship will accept.

Have unforeseen problems arisen in implementing that SIP?

The nature of those problems would need to be considered as to their effect on the charter. How are those being resolved and how would that affect ability to meet charter requirements? If the problems are ongoing, then this could impact on the ability to meet charter requirements.

When is the ship scheduled to complete that SIP?

This gives the date at which the ship will be operating on 0.50% max S fuel oils – many ships are applying a phased process of consuming the HSFO from one tank to the next – the important two dates to verify are:

  1. When the ship will be fully operating on 0.50 fuels
  2. When will they be free of any HSFO remaining on board

On completion of that SIP switchover what quantities of greater than 0.50% max S fuel oil(s) will be onboard and what is the owners planned procedure and schedule to dispose of that fuel oil?

This may cover several different types of fuel oils – gas oils, diesel oils and residual grades. Such left-over fuels must be disposed of ashore – not bled into the day-to-day usage. How does this relate to the charterparty clause(s) on bunkers at redelivery?

3) Fuel oil specifications and bunkering

What fuel oil specification(s) – ISO 8217 / year and grade(s) - does the shipowner normally require to be supplied?

All 0.50% fuels must meet the ISO 8217 specification and ‘as ordered’.

For each of the grades to be supplied does the shipowner have additional parameters and/or limits over and above those given in the standard specification? This should include any operational constraints that might restrict fuel grades that can be bunkered.

If so that may limit fuel purchase options. The ship should define any operational constraints:

  • Viscosity/ Density max and min
  • Fuel type Residual (RM) and or Distillates (DM)
  • Cold flow properties PPt, CFPP, CP.

Where bunker constraints have been identified – are these possible to address without modification or via other means?

Are these constraints due to physical limitations of the ship design, arrangement, equipment? Could the constraints be removed, or at least reduced by operational changes to build bunker grade flexibility?

Are charterer supplied fuel oils only to be loaded into essentially empty tanks (i.e. only unpumpables remaining) thus addressing the risk of incompatible fuels being commingled at the bunkering stage?

This may limit the total uptake possible to less than that which has previously been the case. This may require additional internal movements to bulk remaining quantities of each previously delivery – hence extra work for the ship but which must be insisted on. Unless fuel compatibility has been verified, loading on-top should be avoided, not only from the perspective of residual fuel oil compatibility, but also possible variations in characteristics and the risk that if the sulphur content delivered fuel was above limit that would potentially degrade any existing fuel oils to over the limit therefore this applies to all fuel oils, distillates included.

Will this bunker loading constraint affect the frequency / quantities of bunkering?

This then is part of the cost of using 0.50% max S fuel oils.

Will bunker manifold fuel samples of the charterers fuel oil supplied be sent to one of the fuel testing services?

This then potentially pre-alerts to any issues with the fuel as supplied.

In instances where the charterer supplied fuel oil differs in some significant manner from the fuel oils used to date does the ship have an instruction to trial use that fuel oil in a safe location while it still has other fuel oils onboard?

This may require a short-period of testing during which the ship would not be meeting charter party requirements in terms of speed.

Has the ship experienced and/or has the capability to use fuel oils of significantly different physical characteristics (i.e. viscosity, density, low temperature performance)?

The ability to manage the wider range of fuel oils expected to be supplied as 0.50% max S products will be largely dependent on the shipowner’s investment in:

a) Engineer training and knowledge

b) In the physical arrangement and equipment side.

For those ships which are to use an alternative fuel inside ECA have the changeover to/from instructions been updated to cover the possible differences between the existing 3.50% max S fuel oils and the 0.50% max S fuel oils. This should be indicative of how robust the preparations for the ship’s changeover to 0.50% max S fuel have been.

Physical suppliers selected – in view of the variability of 0.50% fuels transparency of bunker characteristics being offered by the supplier should be requested. What are the ship requirements for pre-delivery?

Pre-knowledge of the typical Density, Viscosity, Pour Point, and for DM fuels CFPP and CP along with a more extended Certificate of Quality should be sought after – any reputable supplier should be able to provide this. A ship which has recognised the value of this information will reflect on their understanding that the handling requirements may change between bunkers.

Has the supplier’s Bunker Delivery Note format been updated to the current style – as given by MEPC.286(71)?

Old format BDN – still in widespread use – could result in subsequent PSC inspection problems.

What information does the physical supplier have in respect of the 0.50% max S fuel oil(s) to be supplied?

If the supplier has no information, or that which is given is ‘typical’ or of such wide ranges, that should be viewed against that of other suppliers which offer a more detailed and narrow range product.

4) Exhaust Gas Cleaning Systems (EGCS) Considerations

Does the ship intend to use EGCS outside ECA?

The fuel oils used by combustion devices feeding into EGCS are outside this 0.50% max S review. However, for fuel oils to be used with EGCS it should be ensured that the suppliers Bunker Delivery Note format has been updated to the latest version (MEPC.286(71)) which includes a tick-box as to whether the fuel oil supplied is for use in EGCS connected combustion devices – suppliers using older format could cause problems to the ship in case of PSC inspections.

Which combustion devices onboard will not be connected to an EGCS?

The fuel oils used by any item of combustion machinery are affected by this 0.50% max S requirement – that includes boilers, IG generators, remote small size diesel engines (all ratings) and emergency equipment – all these will need to be using only 0.50% max S fuel oils on 1 Jan 2020.

In the event of EGCS instrumentation or main component failure – or where the monitoring equipment fails to indicate compliance mode – what measures have the ship put in place to mitigate the down time of EGCS compliance state?

Every provision should be considered by the ship as to the most likely components to fail and what spares can be carried to enable the crew to bring the EGCS back on line within the IMO MEPC.1/Circ.883 prescribed time of one hour before the ship must report its failure. Alternatively, considerations to carry so many days of compliant fuel to facilitate a longer period of repairs should be considered.

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