THE IMPACT OF REGULATIONS ON MARINE FUEL QUALITY Will quality rise or fall? Should legislation be put in place to ensure the quality of fuels? PLATTS 5 th Annual European Bunker Fuel Rotterdam, May 2014 Dragos Rauta, INTERTANKO
REGULATORY REGIME Reg. 18, MARPOL Annex VI - Fuel Oil Availability and Quality Fuel oil..... shall meet the following requirements:... shall be blends of hydrocarbons derived from petroleum refining... shall be free from inorganic acid... shall not include any added substance or chemical waste which: - jeopardizes the safety of ships or adversely affects the performance of the machinery, or - is harmful to personnel, or - contributes overall to additional air pollution Reg. 14, MARPOL Annex VI - Sulphur Oxides (SOx) and PM Global sulphur cap ECA sulphur cap
EXPERIENCE SO FAR Positive Reduction of global average content on sulphur in marine fuels Generally, no availability problems of ECA fuels Negative Blending to LSFO < 1.0% results in lower quality In many cases fuels delivered do not meet the specification requirements stability, ignition quality, sulphur content, density, etc. In practice, there is no quality control of bunkers delivered to ships except for the testing arranged by ship operators Bunker Alerts issued by test laboratories every week
EXPERIENCE SO FAR Blending to meet required sulphur limits results in: - Increased average density - Increased average catfines level (Al+Si) - Increase in sludging problems - Reduced ignition and combustion quality. - Increased problems with chemical contamination of fuel
OTHER REPORTED PROBLEMS WITH FUEL OILS HIGH ASH LOW FLASH POINT FUELS CONTAINING USED LUBE OILS POLYETHYLENE CONTAMINATION POLYSTYRENE CONTAMINATION HIGH CALCIUM & HIGH SODIUM HIGH WATER CONTENT CONTAMINATED FUELS INCOMPATIBILITY OF BLENDS FATTY ACIDE METHYL ESTER (FAME)
Analysis on roughly 50% of all bunker deliveries that were tested by shipowners worldwide. Out of over 100,000 bunker samples, the receiving vessels have reported that on 1,468 occasions they have had machinery problems as a result of using the fuels as supplied. These were events resulting in machinery damage and black out events
Will quality rise or fall? Use of MGO should improve quality If LSFO (global cap) will be a cleaner but blended product, higher risk of same potential problems serious concerns for ship owners There is no question that quality cannot be ensured without control on the product / on the source Should legislation be put in place to ensure the quality of fuels? YES
SUGGESTED ACTION INTERTANKO et al. submission @ IMO Urgent need to address aspects related to quality control of fuel supplied to ships as a key element to proper rule enforcement ICS and IPTA paper @ IMO on safety aspects of poor quality fuels Marshall Islands, Liberia, INTERTANKO, IBIA, BIMCO, ICS, INTERCARGO, IPTA consider further proposal to MEPC 67 for simple measures that could strengthen the enforcement of specific provisions by Parties to MARPOL Annex VI Possible measures: amendments to Reg. 18 to MARPOL Annex VI that Parties to MARPOL Annex VI
SUGGESTED AMENDMENTS 1. Require local appropriate/competent authorities to introduce specific criteria and requirements for the operation of local bunker suppliers with the objective to ensure that suppliers have in place procedures to confirm that fuel supplied to vessels is in compliance with the IMO requirements. Example that could be followed: Singapore MPA: - Code of Practice for Bunkering (SS600) - Quality Management for Bunker Supply Chain (SS524) -Accreditation Scheme for Bunker Suppliers
SUGGESTED AMENDMENTS 2. Mandate local appropriate/competent authorities to make registries of locally recognised bunker suppliers available to IMO which should publish these on its website 3. Require local appropriate/competent authorities to audit/inspect the local suppliers and report the results of investigations and follow-up actions in response to any Note of Protest from ships of non-compliant fuel delivered in their jurisdiction (if off-spec bunkers are delivered to ships, ships are not held responsible, but that bunker suppliers apply corrective measures to avoid such repetition)
REPORTS FROM SHIPS TO FLAG ADMINISTRATIONS PORTS, COUNTRIES, SUPPLIERS Up to December 2013 Port # reports % Countries # reports % Suppliers # reports % Rotterdam 138 35.9% Netherlands 168 43.8% Frisol BV 31 8.7% Antwerp 70 18.2% Belgium 75 19.53% Verbeke Bunkering 29 8.1% Amsterdam 22 5.7% Russian Fed 20 5.21% O.W. Bunker 22 6.2% Singapore 16 4.2% Spain 20 5.21% Argos Bunkering 21 5.9% Gibraltar 10 2.6% Singapore 16 4.17% CEPSA Marine 18 5.0% Barcelona 9 2.3% US 13 3.39% Lukeoil Benelux 18 5.0% S.Petersburg 8 2.1% Germany 11 2.86% Agean Northwest 17 4.8% At sea, Brazil 6 1.6% Gibraltar 10 2.60% Wiljo Bunkering 14 3.9%
OTHER ACTIONS TAKEN BY INTERTANKO Review of Bunker Contracts The INTERTANKO Documentary Committee and the INTERTANKO Bunker Sub-Committee agreed to jointly develop a practical guide for members with suggested clauses for the bunkering contracts with problems and limitations relating to: quality quantity time limits law and jurisdiction clauses Confidential Bunker Dispute Reporting Form Increased concern by tanker owner on the quantity (short deliveries) Bunker Sub-Committee developed a Confidential Bunkering Dispute Reporting Form Tanker owners are encouraged to supply confidential information for: statistical purposes statistics to be used to illustrate the problem statistics to be used when INTERTANKO or Members address concrete bunker disputes, contracts, sampling or other similar matters
CONFIDENTIAL BUNKERING DISPUTE REPORTING Purpose The purpose of this reporting form is to supply confidential information to INTERTANKO for statistical purposes which will allow the Technical, Safety & Environmental Committee (ISTEC), and the Bunker Sub-committee (BSC) to produce data that can be used by the Organisation when considering issues related to bunker disputes, contracts, sampling or other similar matters as determined by the BSC. Details of Bunkering Operation Name of Receiving Vessel IMO Number of Receiving Vessel Flag State of Receiving Vessel Owner / Technical Manager of Receiving Vessel Date and Time of Bunkering Bunkering Port Name of Bunker Supplier Name of Bunker Carrier (barge, tanker, truck, installation) Port Authority Port State Authority Were company procedures followed throughout bunkering operation? Was sampling carried out in line with IMO Guidelines? (Resolution MEPC.182(59)) Was an independent bunker surveyor employed? Yes No What other tests have been performed, such as GC-MS? What was the result? Comments: Name of Independent Bunker Surveyor (if applicable) Were additional commercial bunker samples taken and sent for analysis? Name of Independent Analysis Company Was a Bunker Delivery Note (BDN) issued and signed by the supplier? Were any required Notice of Protest (NOP) issued? Yes No Were bunkers specified according to ISO 8217 Standard? Yes No Which ISO 8217 version was specified, e.g. 2005, 2010, 2012? Yes Yes Yes Yes No No No No Details of Dispute / Issue IMO MARPOL VI Regulated Quantity of bunkers ordered: t Quantity of bunkers delivered per t supplier measurements: Quantity of bunkers received per vessel t measurements: Density of bunkers specified: kg/m3 Density of bunkers per BDN: kg/m3 Density of bunkers received per kg/m3 independent analysis: Sulphur content of bunkers specified: % Sulphur content of bunkers per BDN: % Sulphur content of bunkers received per % independent analysis: Details of Dispute / Issue Other Issues Per Independent Analysis Aluminium & Silicon (Cat Fines): mg/kg Flashpoint: degc Water: % Used lubricating oil (calcium/zinc or mg/kg calcium/phosphorous): Hydrogen sulphide: mg/kg Other: Follow-up Activity Was the dispute escalated? Yes No Comments: Was an agreement reached? Yes No Comments:
SHIPOWNERS REPOBNSIBILITY FUEL CHANGE OVER CHALLENGES Safety aspects combustion characteristics heat transfer and circulation flash point Operational aspects fuel segregation/contamination incompatibility - fuel filter blockages low viscosity leaks & loss in pressure low lubricity - pump seizure bio element HAZID to avoid mechanical failure & power loss SOLAS II-1/26.3 & IACS UI on FOP Redundancy
FUEL CHANGE OVER - HAZID ASSESSMENTS Capacity of Tanks Tank Location Mixing Tanks Piping Systems Trace Heating Pumps Burner Lance Atomising Boiler and Combustion Control Flame Detection Equipment Viscosity & Lubricity Management Flashpoint Sampling Procedures
Emission Control Area (ECA) SOx Requirements Guidance to INTERTANKO Members for the Selection of Compliance Alternatives July 2012 http://www.intertanko.com/topics/environment/eca- Guidance--ECA-Calculator/
INTERTANKO CONCERNS INTERTANKO Members exposed to poor quality and shortage of bunkers Poor quality bunker resulting in engine damage or black out event when oil cargo is onboard, ship in bad weather conditions and in a sensitive area a high and real risk Travel patterns do not allow bunkering same ports Shortage of supply: a 2% shortage of a total annual consumption of 10,000 t gives a financial loss of $120,000 / tanker Payment of freight in tanker trade - days or weeks after the cargo delivery
Will quality rise or fall? We hope not BUT What suppliers say? CONCLUSIONS Should legislation be put in place to ensure the quality of fuels? HOW ELSE?
thank you www.intertanko.com dragos.rauta@intertanko.com