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Saturday, December 16, 2017

POINTS OF VIEW

Singapore’s decision, announced two weeks ago by Shipping Minister Yeo Cheow Tong, to allow Singapore-registered single-hull tankers to operate up to 25 years old (or 2015 whichever is earlier), and to allow single-hull tankers up to 25 years of age of any nationality into its terminals, is a significant marker for the tanker industry.

The amendments to MARPOL 13G agreed 4/12/2003 at MEPC 50 (which enter into force 5/4/2005) left the reality of single-hull phase-out up in the air. International phase-out for ‘Marpol’ single-hulls with protectively-located segregated ballast (SBT/PL) (i.e. Category 2 and 3 tankers over 5,000 dwt) was fixed at 2010. However, flag states may allow the continued operation of such tankers to 25 years or 2015 whichever is earlier (‘Marpol’ tankers with double bottom or double sides may trade to 25 years even if beyond 2015), while at the same time port states may deny entry to such ‘extended’ tankers.

The only declaration up to now has been that of the European Union which stated at the MEPC meeting last year that it would neither allow the continued operation after 2010 of tankers flying an EU flag, nor allow ‘extended’ tankers of any nationality into its ports after 2010. That encompasses a huge chunk of the world tanker fleet (since EU enlargement, the EU fleet totals some 27% of the world fleet) and one of the world’s key trading areas. It issued a clear signal that any other country making the same decision would not be on its own if it bars single-hulls from 2010.

But in nearly a year since then, Singapore is the only country to declare its position. And its decision is a clear signal to any country still considering its position on this issue that it will not be alone if it decides to allow single-hulls after 2010.

Those owning and using category 2/3 single-hulls, as well as those considering an investment in such tonnage, have been waiting for the picture to become clearer, and have listened with interest to discussions in key shipping nations such as Japan over whether or not to allow single-hulls to operate after 2010.

Singapore’s decision makes one thing very clear. The possibility of unanimous international action to bar single-hulls after 2010 is simply not there any more. Single-hulls trading after 2010 now have a flag to fly and a commercial destination to trade to. The next few decisions by major flag and port states will be crucial in deciding the longevity of the single-hulled tanker.