2020 compliance conundrum

In October 2016, the International Marine Organization (IMO) decided to introduce the MARPOL Annex VI global 0.50% sulphur limit in 2020. It was a good decision, giving us certainty about the date. However, that is perhaps the only thing we actually know today. We have predictions on refinery supply capacity, marine fuel demand and uptake of scrubbers, but we don’t know to what extent these predictions will match reality. This will only become clearer much closer to the implementation date.

There is another uncertainty weighing heavily on the minds of stakeholders: how do we ensure the 2020 global sulphur limit is effectively enforced? If enforcement is weak, won’t there be a huge temptation to cheat, putting compliant operators at an economic disadvantage? And as a consequence, is there a risk that the supply side is gearing up to provide low sulphur fuels for demand that won’t fully materialise?

Compliance with the Emission Control Area (ECA) 0.10% sulphur limit appears to be good in the European Union (EU) but there is no guarantee this will this translate to high levels of compliance with the global cap. The EU has put in place minimum requirements for documentation checks and fuel testing on ships calling at its ports so operators know there is a real risk of being caught if they are not complying. This level of checks requires port state control (PSC) to have significant manpower and fuel testing resources available, resources that some MARPOL signatories may not be able to afford or prioritise.

From 2020, ships will have no legitimate reason to bunker fuel with more than 0.50% sulphur unless they are using approved abatement technology, such as scrubbers. The only other valid reason would be a situation where a ship could not obtain compliant fuel because there was no availability in its bunkering port. Importantly, MARPOL Annex VI does not ban a ship from carrying high sulphur fuel – it regulates sulphur oxide emissions.

PSC officers can take enforcement actions against ships for using non-compliant fuel within their own territorial waters. If they see evidence of transgressions outside their territorial waters, all they can do is report it to the ship’s flag State. It is then up to the flag State to ensure the vessel complies. But how realistic is it that anybody will be able to prove non-compliance when the ship is out at sea?

A simple idea for dealing with this is gaining momentum. In February 2018, the IMO’s sub-committee on Pollution Prevention and Response (PPR) will discuss banning the carriage of fuel with sulphur exceeding 0.50% on ships without scrubbers. This would be easier to check and enforce as non-compliance can be detected in port. It would give PSC powers to fine or detain ships that carry non-compliant bunkers.

IBIA is currently polling members on whether they think we should use our consultative NGO status at the IMO to support a carriage ban. If we do, we would insist on caveats such as not penalising ships for having non-compliant fuel as a result of non-availability, that the carriage restriction relates only to the sulphur content and not fuel type, and ensure it doesn’t prevent the development and adoption of alternative onboard solutions such as blending or desulphurising technology.

We don’t know which measures IMO member states will support to ensure the 2020 sulphur limit is effectively implemented. IBIA intends to bring as much clarity as possible ahead of 2020, helping the states that will be enforcing the regulation understand how they can support the industry to bring about the intended air quality benefits in a fair and pragmatic way.