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Tuesday, October 16, 2018

Implications of EU single-hull phase-out proposal

The Transport, Telecommunications and Energy Council under the General Secretariat of the EU Council amended the proposed regulation (EC no. 417/2002) on the accelerated phase-out of single hull oil tankers 27-28 March 2003. In order to meet the 1 July deadline for enactment of the regulation, the European Parliament has to agree with the Council position reached on the 27 March.

At the moment the EU phase out proposal looks likely to be implemented according to the schedule 1 July 2003.

Concerning the timetable for the phase-out changes from the previous proposal are that category 2 and 3 tankers fitted with only double bottoms or double side (not used for the carriage of oil) are allowed to trade until reaching 25 years of age or until 2015 whichever is the earlier date.

INTERTANKO has looked at the consequences for the single-hull tanker fleet above 5,000 dwt as per 1 March 2003. Compared to the original EU proposal after the Prestige accident, there are only small changes for the total fleet in the period 2003-2009 mainly because the phase-out schedule for the pre-MARPOL fleet has not changed. However the tankers fitted with double-sides (DS) or double-bottom (DB) have been allowed to trade beyond 2010 until reaching 25 years of age but not longer than until 2015 . Consequently the phase-out for some 13.6 million dwt of DB/DS tankers are allowed to trade 2010 to 2015, of which 6.4 million dwt to 2015.

The EU proposal is very different from the MARPOL 13G phase out scheme which require some 3 to 15 million dwt to be phased out yearly in the period 2003 to 2014 and 50 million dwt in 2015, the EU proposal means that some 40 million dwt of tankers will be closed out of the European market and banned from flying European flags in 2003 and another 61 million dwt in 2010.

The EU proposal is not so different from the US OPA 90 phase out scheme which has already banned some 26 million dwt that reached phase-out before 2003 but are still allowed to trade in the rest of the world.

Looking at graphs on the number of tankers to be phased out, it is worth noticing that the peak in 2003 is relatively much higher than the peak in dwt terms for the same year. The reason for this is that the population of tankers that have to be phased out in 2003 contains relatively more smaller tankers.  According the INTERTANKO figures, more than 330 tankers 5,000 - 30,000 dwt and another 278 tankers 30,000 - 60,000 dwt will be unwanted in Europe if the proposal goes through. The phase-out requirements will also affect combination carriers that are not included in the above figures as well as chemical carriers that occasionally also carry petroleum products.

What makes the proposal even more dramatic is that already from 1 July single hull tankers flying Europe or trading Europe will not be allowed to carry heavy oils defined as:

  • Crude oils having a density at 15ºC higher than 900 kg/m3. This equals to an API grade lower than 25,7, and
  • Fuel oils having a density at 15ºC higher than 900 kg/m3 or a kinematic viscosity at 50ºC higher than 180 mm2/s.  This equals to a kinematic viscosity higher than 180 cSt

A detailed spreadsheet comparing the EU proposal with MARPOL 13G and OPA ’90 for the total fleet and fleet segments can be found here

Contact:  Erik Ranheim