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Saturday, January 20, 2018

BUNKER SUPPLEMENT NO. 8 – AUGUST 2000

BUNKER FUEL SULPHUR LEVELS AND ASSOCIATED REGULATIONS : PART II – EU DIRECTIVE 1999/32/EC

BUNKER FUEL SULPHUR LEVELS AND ASSOCIATED REGULATIONS :
PART II – EU DIRECTIVE 1999/32/EC

Following last month’s INTERTANKO Bunker Supplement, wherein it discussed the requirements to meet the Sulphur Oxide Regulations contained in Annex VI of MARPOL, this month’s Bunker Supplement will address the European Directive requirements, in so far as they impact Marine Fuels, that came into force on 1 July 2000.

The Directive as a whole considers the sulphur content for the use of all fuel oils within the European Union and where considered necessary allows “derogation” (relief) for the application of the Directive for diverse reasoning and for prescribed periods.

Reviewing the Directive, it starts with, what could be termed, 25 preliminary paragraphs that attempt to justify the reasoning behind the content of the Directive. The appropriate paragraphs impacting Maritime Operations are:

Paragraph 18 – “Whereas a limit value of 0.2% for the sulphur content of gas oils has already been established pursuant to Directive 93/12/EEC; whereas that limit should be changed to 0.1% until 1 January 2008” – in other words – the 0.2% limit stated within the Directive was already in place but on 1 January 2008 the limit will be further reduced to 0.1% for gas oils (read also diesel oils).

Paragraph 20 – A précis of this lengthy paragraph proposes that the lower limit for sulphur content of MDO does not apply in the specified areas. This should be taken into account when considering the directive as a whole especially for vessels trading within the European Union from one port to another, which can be of substantial distance. The stated areas receiving “dispensation” are Greece, the Canary Islands, the French Overseas Departments and the Archipelagoes of Maderia and Azores.

The Directive itself consists of 13 Articles that address the quality requirements for use of all fuel oils both ashore and afloat. The relevant sections regarding Marine use can be summarised as:

Article 1, Paragraph 2(a) – The Directive does not apply to “petroleum derived liquid fuels used by seagoing ships except those falling within the definition in” Article 2 paragraph 3 and for marine gas oil used by ships crossing a frontier between a third country and a Member State. Recalling the content of paragraph 20 within the preliminary section to the Directive, one must ask the question – What happens then for a ship on a voyage from say Greece to say Italy with both being Member States but one having “derogation” within the preliminary section to the Directive (i.e. not in the body of the Directive)? This remains unclear within the Directive. However this second requirement in this Article does imply, by default, that ships trading between two consecutive EU ports must use the required low sulphur fuels as specified within the Directive.

Article 2, Paragraph (3) – This paragraph defines Marine Gas Oil and the group of fuels used by vessels to which the Directive applies. In general terms the Directive will apply to the groups of fuels as specified within Table I of ISO 8217 (1996); in other words all the Marine Gas and Diesel Oils. However, the stated ISO specification does have stated current limits for the sulphur content of these products that are in the range of 1.0 to 2.0% dependent upon the grade selected. As will be seen below, this Directive radically reduces these limits for MDO Sulphur content for use within EU waters.

Article 3, Paragraph 1 – The Directive does not include sulphur requirements IFO and HFO for Marine use, but as per the Preliminary paragraph 12 this aspect is being considered for the future when the paragraph states “ whereas it would be appropriate to lay down limits for the sulphur content of other liquid fuels, in particular heavy fuel oils,…… on the basis of cost effectiveness studies”. The Directive supplies a sulphur level for such fuels for internal shore based use of 1.0% and this level may give some guidance to the regulators’ manner of thinking for future levels for IFO/HFO for Marine use.

Article 4, Paragraph 1 – This paragraph sets the maximum sulphur content of gas oil and states “ Member States shall take all necessary steps to ensure that gas oils, including marine gas oil, are not used within their territory as from:

-         July 2000 if their sulphur content exceeds 0.20% by mass,

-         1 January 2008 if their sulphur content exceeds 0.1% by mass.”

Paragraph 2 of this Article brings into the body of the Directive the “dispensation” granted in the Preliminary paragraph 20 for certain geographic regions. One must continue to wonder how the content of this paragraph reads when considered in conjunction with Article 1 – paragraph 2(a) as reported above; namely the use of lower sulphur MDO to be used between EU States but not when entering EU territory from a third country.

Article 6 – This article states that checks and controls will commence within 6 months of the Directive coming into force. It is assumed that this will also apply to Maritime activities but this is not specified within the Article. The method adopted for the analysis of a fuel’s sulphur content is generally specified to be by X-Ray fluorescence spectroscopy.

Article 7 – As referred to above within the discussion for Article 3, paragraph 1 and Preliminary paragraph 12, this Article within its paragraph 3 states that “The Commission shall consider which measures could be taken to reduce the contribution to acidification of the combustion of marine fuels other than those specified in Article 2(3) and, if appropriate, make a proposal by the end of 2000.” In other words let’s wait for another EU Directive in early 2001 relating to the reduction of sulphur levels for IFO and HFO fuels.

Some Practical Implications

With these requirements in place voyage planning will take on an additional dimension and meaning. Vessels normally have two main MDO storage tanks of defined capacity to satisfy normal use of this type of fuel for generator use and port steaming where necessary. Given these regulations for European waters, will vessels have adequate MDO bunker tank capacity for the storage of two differing MDO qualities so as to satisfy the EU Directive or will Owners purely opt for the purchase of MDO only with the EU required lower sulphur content? If the latter is the case, is there adequate stock of MDO on the world market to satisfy the possible demand? – at present this is not a likelihood.

Although vessels entering EU waters from a “third country” do not have to meet the EU sulphur requirements, any further ports of call within the EU will necessitate the use of the lower sulphur MDO for the proposed voyage. If the required quality MDO is not onboard, then adequate bunkers will have to be taken to complete the proposed voyage at the first EU port of call. If there is not an empty MDO tank available to take the new bunker, will de-bunkering be made a necessity? If there is an MDO tank available, that is substantially empty, and the new MDO is bunkered that is just within the sulphur specification, then the final blend within the bunker tank may be without the requirements and subject checks and controls at another EU port of call.

Although not yet in force, by combining and operating the EU requirements with the requirements, as discussed last month, for ANNEX VI of MARPOL the diverse fuel storage requirements will only increase. For smaller vessels it is possible that cargo carrying capacity may have to be reduced to satisfy the requirements for differing bunker qualities in differing trading zones (SOx emission control zones, Intra EU trading, normal international MDO or IFO qualities per ISO 8217).

The documentary evidence that the vessel will have to maintain to supply evidence of concurring with the diverse requirements and regulations could be large. Unlike the ANNEX VI requirements for defined SOx emission control zones, the EU Directive refers to “territory” and “frontier” without defining either word. If a vessel voyage plan is such that it leaves an EU port, without taking onboard EU required quality MDO, bound originally for a “third country” port and crosses the “frontier” but then receives orders to return or proceed to an EU port by her Charterers, what happens then on entry to the new EU port? These type of questions do not seem to have been addressed by the regulators.

The Chief Engineer’s life in future may not be a happy one!!

Requests for further information or enquiries should be addressed to Robert Bishop at robert.bishop@intertanko.com .