3/15/06 Tripartite Agreements and Bio Fuels Maurice Gordon, P.E. Maritime Systems Engineering, Inc. Engineering, Inc.

3/15/06 Introduction MARPOL Annex II and IBC Code Revisions MARPOL Annex II and IBC Code Revisions Effective 1 January 2007 Effective 1 January 2007 Re-classification for all chemicals Re-classification for all chemicals IBC Code Chapters 17 & 18 IBC Code Chapters 17 & 18 MEPC.2 Circular MEPC.2 Circular Insufficient time to reclassify all products Insufficient time to reclassify all products Maritime Systems Engineering, Inc.

3/15/06 GESAMP Global Experts on the Scientific Aspects of Marine Pollution Global Experts on the Scientific Aspects of Marine Pollution Technical committee sponsored by 8 UN agencies including IMO Technical committee sponsored by 8 UN agencies including IMO  Prepares Hazard Profile (GHP) for product Maritime Systems Engineering, Inc.

3/15/06 ESPH Evaluation of Safety and Pollution Hazards Working Group Evaluation of Safety and Pollution Hazards Working Group Part of IMO Subcommittee on Bulk Liquids and Gasses (BLG) Part of IMO Subcommittee on Bulk Liquids and Gasses (BLG)  Pollution Category  Ship Type  Conditions of Carriage Maritime Systems Engineering, Inc.

3/15/06 Current Approval Status 120 products not approved due to missing data 120 products not approved due to missing data Mixtures and trade name products from MSC.2 Circular not approved Mixtures and trade name products from MSC.2 Circular not approved Maritime Systems Engineering, Inc.

3/15/06 Parties to Tripartite Source State – Shipping or producing country Source State – Shipping or producing country Destination State – Country receiving the product Destination State – Country receiving the product Flag State – Ship’s country of registry Flag State – Ship’s country of registry Maritime Systems Engineering, Inc.

3/15/06 Product Evaluation Initiated by Source State Initiated by Source State Required before initiating Tripartite Agreement Required before initiating Tripartite Agreement Maritime Systems Engineering, Inc.

3/15/06 What is the Product? Is Vapor Pressure Is Product An Oil? Liquefied Gas (Gas Carrier Code) MARPOL ANNEX I MARPOL Annex II IBC Code Yes No Yes Maritime Systems Engineering, Inc.

3/15/06 Existing Approvals Review IBC Code Review IBC Code Chapter 17 – Substances governed by IBC Code Chapter 17 – Substances governed by IBC Code Chapter 18 – Substances not governed by IBC Chapter 18 – Substances not governed by IBC Chapter 19 – Index of Products Carried In Bulk Chapter 19 – Index of Products Carried In Bulk –Includes cross-reference of synonyms Review MEPC.2 Circular Review MEPC.2 Circular Recent Approvals Recent Approvals Products with Tripartite Agreements Products with Tripartite Agreements Maritime Systems Engineering, Inc.

3/15/06 MEPC.2 Circular Lists List 1 – Pure products List 1 – Pure products Fully evaluated and approved for next IBC Code Fully evaluated and approved for next IBC Code Products with Tripartite Agreements Products with Tripartite Agreements List 2 – Pollutant-only mixtures List 2 – Pollutant-only mixtures Many listed by trade name Many listed by trade name List 3 – Trade name products with safety hazards List 3 – Trade name products with safety hazards List 4 – Pollutant-only mixtures with >1% unassessed components List 4 – Pollutant-only mixtures with >1% unassessed components Maritime Systems Engineering, Inc.

3/15/06 Is There a Hazard Profile? Listed in IBC Code? Apply IBC or MEPC.2 Amendment Initiate Provisional Assessment Yes No Yes Listed in MEPC.2 Circular? Pure Product or Aqueous Solution Does Entry Have Expiration? Review Assessment; Join Agreement Yes No Maritime Systems Engineering, Inc.

3/15/06 Provisional Assessment New GESAMP Profile? Evaluate Available Data Derive Pollution Category and Ship Type Yes No Yes Pure Product or Aqueous Solution Sufficient For Provisional Hazard Profile? Classify by Analogy No Assign Carriage Requirements Initiate Tripartite Agreement Maritime Systems Engineering, Inc.

3/15/06 Mixtures ≥99% Listed Products Safety Hazards? Notify Destination State & Flag State Calculate Pollution Category and Ship Type Yes Mixtures Assign (n.o.s.) Code Entry No Assign Carriage Requirements Initiate Tripartite Agreement Product ≥99% IMO Listed Components Maritime Systems Engineering, Inc.

3/15/06 Mixtures <99% Listed Products Assess Mixture As A Whole? Calculate Pollution Category and Ship Type Yes Mixtures Assess Each Component No Use Process for Pure Products Initiate Tripartite Agreement Product <99% IMO Listed Components Assign Carriage Requirements Maritime Systems Engineering, Inc.

3/15/06 Tripartite Process Response within 14 Days? Provisional Assessment By Tripartite Agreement Yes Proposal Deemed Accepted No Assign Most Severe Conditions Initiate Tripartite Agreement Positive Response? No Yes Maritime Systems Engineering, Inc.

3/15/06 Tripartite Follow-up Flag State – Amend Vessel Certificates Flag State – Amend Vessel Certificates Source State – Advise IMO within 30 days Source State – Advise IMO within 30 days IMO – Updates MEPC.2 Circular IMO – Updates MEPC.2 Circular Maritime Systems Engineering, Inc.

3/15/06 Assessment Completion Provisional Assessment valid for 3 years Provisional Assessment valid for 3 years Manufacturer submits data to GESAMP Manufacturer submits data to GESAMP GESAMP issues Hazard Profile GESAMP issues Hazard Profile Manufacturer (via Source State) submits proposal for IBC Entry to IMO Manufacturer (via Source State) submits proposal for IBC Entry to IMO Maritime Systems Engineering, Inc.

3/15/06 What is Biodiesel? Fatty Acid Methyl Ester (FAME) of Vegetable Oil or Animal Fat Fatty Acid Methyl Ester (FAME) of Vegetable Oil or Animal Fat Variations in feedstock source Variations in feedstock source Commodity Exchanges govern feedstock Commodity Exchanges govern feedstock Maritime Systems Engineering, Inc.

3/15/06 IMO Assessment Biodiesel assessed individually by source Biodiesel assessed individually by source Current Approvals Current Approvals Palm Oil FAME (IBC Chapter 18) Palm Oil FAME (IBC Chapter 18) Coconut Oil FAME (IBC Chapter 18) Coconut Oil FAME (IBC Chapter 18) Rapeseed (Canola) Oil FAME (MEPC.2/Circ. List 1) Rapeseed (Canola) Oil FAME (MEPC.2/Circ. List 1) None Approved under new IBC Code None Approved under new IBC Code Maritime Systems Engineering, Inc.

3/15/06 US Coast Guard Action Tripartite Agreement for Biodiesel: Soy, rapeseed or tallow methyl esters Tripartite Agreement for Biodiesel: Soy, rapeseed or tallow methyl esters Between U.S. ports in U.S. flag vessel Between U.S. ports in U.S. flag vessel Assessment under old IBC by analogy Assessment under old IBC by analogy Valid through 31 December 2006 Valid through 31 December 2006 Currently working on Tripartite for international carriage Currently working on Tripartite for international carriage Maritime Systems Engineering, Inc.

3/15/06 Biodiesel Classification Generic approach Generic approach Pollutant only product Pollutant only product Suggested listing Suggested listing Biodiesel, animal or vegetable Fatty acid methyl ester (n.o.s.) Maritime Systems Engineering, Inc.

3/15/06 Biodiesel Uses Pure Biodiesel (B100) as fuel additive Pure Biodiesel (B100) as fuel additive Blended Biodiesel – 15%-20% in petroleum diesel fuel (B15 or B20) Blended Biodiesel – 15%-20% in petroleum diesel fuel (B15 or B20) B100 for use as unblended fuel B100 for use as unblended fuel Maritime Systems Engineering, Inc.

3/15/06 Biodiesel Volumes B100 fuel additive: low volume increasing as market matures B100 fuel additive: low volume increasing as market matures B15 or B20 blend or B100 fuel: Volume comparable to current diesel oil requirements B15 or B20 blend or B100 fuel: Volume comparable to current diesel oil requirements Volumes likely to exceed chemical tanker capacity Volumes likely to exceed chemical tanker capacity Maritime Systems Engineering, Inc.

3/15/06 U.K. & Sweden Guidance Interim Guidance pending MEPC consideration Interim Guidance pending MEPC consideration Applies to bio-fuels, bio-alcohol and various FAMEs Applies to bio-fuels, bio-alcohol and various FAMEs Maritime Systems Engineering, Inc.

3/15/06 U.K. & Sweden Guidance Bio-fuels in pure state – Annex II Bio-fuels in pure state – Annex II Bio-fuels blended with petroleum up to 15% – Annex I Bio-fuels blended with petroleum up to 15% – Annex I Construction materials compatible with cargo Construction materials compatible with cargo Bio-fuel concentrations over 15% require Administration review Bio-fuel concentrations over 15% require Administration review Maritime Systems Engineering, Inc.

3/15/06 Annex I Treatment Biodiesel can be used in any concentration Biodiesel can be used in any concentration Demand likely to grow Demand likely to grow Volume will become more consistent with product tanker capacity Volume will become more consistent with product tanker capacity Maritime Systems Engineering, Inc.

3/15/06 Annex I Treatment Limit to double hull tankers meeting Annex I Regulation 13F Limit to double hull tankers meeting Annex I Regulation 13F Overboard discharge limited as oil Overboard discharge limited as oil –Decanted water only –ODMEs may require re-certification Maritime Systems Engineering, Inc.