More fuel challenges ahead that need to be resolved

SOMETIMES, you have to be careful what you wish for. A good few years ago now, tanker owners body Intertanko caused a stir by advocating that all ships should use distillate fuel. At the time, the idea was met with scepticism, including by this column.

Time has moved on and the International Maritime Organization (IMO) has, first, agreed to Emissions Control Areas (ECA) where fuel cannot have a sulphur content of more than 0.10 per cent and, from the beginning of next year, to a global cap, outside ECA, of 0.50 per cent..

Initially it seemed that Intertanko's dream had come true. Ships would have to use a "clean" distillate fuel such as marine gas oil (MGO). As well as reducing polluting funnel emissions, using just MGO makes life simpler for the engineers. There is no need to heat up the fuel and MGO is generally a cleaner substance to deal with.

Unfortunately, life is never that simple. While relatively much more expensive, MGO is likely to be the default option at first for much of the fleet when the 0.50 per cent sulphur cap comes into force, oil companies have been scrambling to develop cheaper blends of heavy fuel oil (HFO) and distillates (or even bio-fuels) that comply with either the the 0.10 per cent or 0.50 per cent cap.

Many ships will have to switch between fuels that comply with the higher or lower sulphur limits during a voyage. Moreover, we appear to be looking at a proliferation of compliant fuels, some of which may be mutually incompatible. That could make fuel management on board highly problematic. And of course, a proportion of the fleet will continue to use "dirty" high sulphur, and use scrubbers to comply with the new regulation. Intertanko's engineers' dream has turned into something of a nightmare.

The impending sulphur regulation was certainly high on the agenda at a meeting of the board of International Chamber of Shipping (ICS) Board meeting in London last week, attended by senior representatives of the world's national shipowners' associations.

"The 2020 global sulphur cap will be the regulatory game changer of the decade with profound implications for the economics of shipping," ICS chairman Esben Poulsson said following the meeting.

As the Jan 1, 2020, deadline for the sulphur cap approaches, ICS members reviewed progress in persuading IMO to take measures to address expected implementation problems.

These include "outstanding safety and fuel compatibility issues associated with the use of new 0.5 per cent sulphur blends and continuing uncertainty over the availability of compliant fuels in every port worldwide, a particular challenge for tramp trades".

The ICS Board concluded that it will be vital for the IMO Marine Environment Protection Committee to complete this work at its meeting in May 2019, as shipowners begin ordering compliant fuels.

"While fuel suppliers must play their part in providing sufficient quantities of safe and compliant low-sulphur fuels, shipowners must urgently prepare their ship-specific implementation plans for 2020," said the Singapore-based ICS chairman.

"This should be carried out using the IMO template adopted at the industry's request and the detailed advice prepared by ICS, which we have just updated to take account of other recent IMO decisions. This will be vital to reduce the possibility of teething problems or in the event of initial port state control difficulties due to factors beyond the shipowner's control."

There are many loose ends that need addressing if the sulphur cap implementation is not to turn into a shambles. The heavy lifting to deal withoutstanding issues will not take place in May but next week, at IMO's Sub-Committee on Pollution Prevention and Response (PPR 6). ICS will be there, as will the International Bunker Industry Association (IBIA), which has concerns that many issues surrounding the implementation are still unresolved.

For example, PPR 6 needs to finalise draft guidelines to ensure consistent implementation of the new sulphur limit and this involves agreeing on sulphur testing and verification procedures. It also needs to agree on a standard fuel oil non-availability report (FONAR).

Then there will be the more difficult question of what port state control authorities should do when presented with a FONAR. Nobody should expect it will be seen as a "get out jail free card".

PPR 6 will also be looking at scrubbers. This should be a technical exercise, but it is possible there will be calls from some quarters to completely ban the discharge of wastewater from scrubbers into the sea. That would be rather inconvenient given the huge investment that has been put into scrubbers by manufacturers and shipowners.

It is to be hoped that the hard work being put in by shipping industry representatives at PPR 6 will result in a common sense approach to implementing the 0.50 per cent sulphur cap.

However, even if that is the case, there will be, as Mr Poulsson says "even more profound changes to come".

He refers, of course, to the IMO commitment 40 per cent efficiency improvement by 2030 and a 50 per cent total cut in the sector's GHG emissions by 2050. Whatever happens next year, there will be no resting on its laurels for the shipping industry.