Progress stalls on IMO 2020 enforcement concerns

Owners remain concerned about fuel quality post-2020. Pictured
Owners remain concerned about fuel quality post-2020. Pictured

Lack of support for a proposal seeking “pragmatic enforcement” of the International Maritime Organization’s (IMO’s) 2020 sulphur-cap regulation at MEPC 73 has convinced shipowner representatives backing the scheme that they must adjust their message if they hope to succeed in making changes they deem imperative to avoiding potential chaos come 1 January 2020, when the regulation goes into effect.

A petition filed in late August by the Bahamas, Liberia, the Marshall Islands, and Panama – along with shipowner groups Intercargo, BIMCO, and Intertanko – called on delegates at the meeting in London in late October to consider adding into the regulation an experience-building phase (EBP), similar to a scheme that gained final approval within the Ballast Water Management Convention at the same meeting.

The co-sponsors of the petition have argued that an EBP would help the industry gain information on compliant fuel availability, as well as help prevent unsafe, non-compliant fuel mixes from infiltrating bunker markets.

However, despite receiving support for the proposal just days before the start of the meeting from the United States – an aggressive enforcer of international shipping regulations – discussion on the proposal ended with the committee calling for more “concrete proposals” at MEPC 74, in May 2019, on how to enhance implementation of the part of the regulation that covers fuel oil quality and availability.

Nick Makar, regulatory affairs adviser at International Registries Inc (IRI), which operates and manages the Marshall Islands flag, acknowledged it was not the outcome he was looking for.

“If you want to look at it solely from the standpoint of the proposal not accepted as presented, then yes, we were disappointed,” Makar told IHS Markit. “But the substance was kept alive and the chair’s summary provides a way forward. Even though it falls on the cosponsors for a better proposal, it wasn’t an outright rejection, so we have guarded optimism of our efforts going forward.”

Intercargo, which represents dry bulk vessel operators, noted that the committee listened to the concerns they raised “and offered a constructive way forward to potentially address them”, the group said in a statement following the meeting.

But the group also asserted that while it fully supports the regulation and the 1 January 2020 implementation date, it “cannot ignore the safety issues that are most likely to arise with this important regulation and are obliged to voice our concerns, which relate to securing a robust level of safety of MARPOL- and SOLAS-compliant fuels”, Intercargo stated.

“The successful, effective, and orderly implementation of the regulation rests not only with ship operators but equally with the IMO member states and with suppliers [involving oil refineries, bunker suppliers, and charterers] who need to secure the worldwide availability of safe, compliant fuels – a particular problem for ships in the dry bulk tramp trades.”

Much of the pushback against the proposal, according to sources involved in the debate, is fear among many of those that could benefit from the regulation – large shipowners that have greater leverage over compliance relative to their competition and bunker suppliers that will reap benefits of the higher cost of compliant fuels – that any change to how the regulation is rolled out and monitored could lead to less stringent enforcement.

Despite asserting in the proposal that they were not looking to delay implementation of the regulation, “we could have explained things differently”, Makar said, noting that in the follow-up proposal, “what we want to try to move away from is some of the terminology and the misunderstanding associated with it, even though ‘EBP’ has become sort of an institutionalised term at the IMO. We’re going to build on the experience gained from our original proposal.”

One action taken by the committee that was welcomed by both the petitioners and a majority of delegates was the adoption of an amendment banning the carriage of non-compliant (exceeding 0.5% sulphur) fuel oil, unless the ship has an exhaust scrubber fitted to its stack.

The amendment, which is expected to enter into force on 1 March 2020 to give shipowners time to adjust bunker purchases and burn through non-compliant fuel, “does not change in any way the entry-into-force date of the 0.5% limit from 1 January 2020”, the committee said. “It is intended as an additional measure to support consistent implementation and compliance and provide a means for effective enforcement by states, particularly port state control.”

Also approved at MEPC 73 concerning the IMO 2020 regulation was guidance, as part of a set of guidelines being developed by the IMO, on ship implementation planning, as a means of helping shipowners and operators plan for the sulphur cap.

Guidance from the IMO will look to incorporate into a ship implementation plan sections on risk assessment and mitigation on the effect of new fuels, fuel oil system modifications and tank cleaning, fuel oil capacity and segregation capability, procurement of compliant fuel, fuel oil changeover plans (from conventional residual fuel oils to 0.5% sulphur compliant fuel oil), and documentation and reporting.

In addition, best-practice guidance approved at the meeting for fuel-oil suppliers is “intended to assist fuel-oil purchasers and users in assuring the quality of fuel oil delivered to and used on board ships”, the IMO explained. The guidance relates to aspects of the fuel-oil purchase up to the loading of the purchased fuel oil on board.