AIR EMISSIONS LATIN AMERICAN PANEL Buenos Aires 5th November 2014 Dragos Rauta INTERTANKO

SOx Emissions Limits Globally(emissions from fuel with max. x% sulphur content) Currently – 3.50% After Jan 1, 2020 (or 2025) – 0.50% ECA (Baltic Sea, North Sea, NA & Caribbean) Currently – 1.00% After Jan 1, 2015 – 0.10% European Union Sulphur Directive Follows IMO except: Currently – 0.10% “at berth” After Jan 1, 2020 – 0.50% in EU waters (?) California - 0.10% (24 miles)

ECAs – LSFO Availability (0.1%) LS MGO expected to be available Possible local shortage during initial phase-in period Expected hikes on price in earlier stages Premium expected to keep constant at $250 - $350 / ton New fuel/blends/hybrids (i.e. HDME 50)

ECAs – Fuel Change Over Challenges Safety aspects combustion characteristics heat transfer and circulation flash point temp. (would 60ºC be lowered?) Operational aspects fuel segregation/contamination incompatibility - fuel filter blockages low viscosity – leaks & loss in pressure low lubricity - pump seizure bio element (FAME)

ECAs – New Fuels/Blends/Hybrid - Potential Issues Specifications not yet included in ISO 8217 Compatibility with HFO, MGO (and with each-other) Requires heated tanks High paraffin content – cold flow properties Fuel Stability & quality Sediment formation Injector and filter problems Separate tanks for new fuels? Engine warranty issues? Available amounts limited – would price be competitive?

HAZID to avoid mechanical failure & power loss INTERTANKO/OCIMF Recommendations on Fuel Change Over Procedures API Technical Considerations for Fuel Switching CIMAC Guideline for Operation of Marine Engines on Low Sulphur Diesel

USCG/EPA Policies for ECAs USCG Advices for January 1, 2015 Ship owners & operators should: ensure that all relevant equipment on board is capable of handling ECA fuel any modifications necessary are put in place and tested well before the deadline review contracts with fuel suppliers to ensure an adequate supply of ECA fuel A vessel must use compliant fuel in ECA If a ship owner is not able to obtain compliant fuel due to non-availability, a FONAR must be submitted

Fuel Oil Non-Availability Report (FONAR) If a ship owner is not able to obtain compliant fuel due to non-availability, a FONAR must be submitted FONAR is not a waiver, it is a statement of non-compliance The lowest possible sulphur content fuel should be used If Bunker Delivery Note (BDN) and independent test differ, Note of Protest (NOP) should be submitted INTERTANKO advice: issue NOP if MARPOL Sample not taken in accordance with the IMO Guidelines

Fuel Oil Non-Availability Report During USCG PSC examination, the ship should provide: record of actions taken to attempt to achieve compliance evidence the vessel attempted to purchase compliant fuel oil in accordance with its voyage plan, and if not available where planned, that attempts were made to locate an alternative source documentation that Flag Administration and EPA were notified USCG will refer deficiencies identified during PSC of ECA non-compliance to EPA for enforcement EPA reviews data/assess trends on FONAR submissions Four companies that have submitted a number of FONARs have been issued subpoenas by EPA

FONAR: where vessels are coming from

FONAR: where vessels are coming from

FONAR: where vessels are going to

FONAR: Reporting

ECA 2015 – Paris MOU New Guidelines on PSC: At initial inspection within an ECA or first port after transiting an ECA the PSCO will look at: Bunker Delivery Note (BDN) MARPOL sample Evidence of written change over procedures Record of fuel oil changeover If fuel not available must present a record of actions, including: Voyage plan and when notice of ECA transit received Date and time of expected transit Description of actions taken to obtain fuel Availability of compliant fuel at first POC in ECA & plans to obtain fuel Ship need not deviate from intended voyage or unduly delay the voyage Party will take into account relevant circumstances and evidence to determine the appropriate action, including not taking control measures

ECA 2015 – EU Enforcement Policies EU – EU Sulphur Directive - European Sustainability Shipping Forum (ESSF) with 6 technical groups on: LNG as Marine Fuel Exhaust Gas Cleaning Systems Implementation of Sulphur Directive – PSC & “sniffers” Financing Opportunities Research & Innovation Competitiveness

ECA 2015 – Europe (ESSF) Group c) Implementation of Sulphur Directive – PSC & “sniffers” Harmonised sampling Developing On-board Sampling Guidelines Designated Sampling Point (or two) Sampling tolerances? Expected completion by the end of 2014 INTERTANKO stressing the importance of control over fuel being delivered to the ship. EU Sulphur Directive Article 4b.3 "Member States shall ensure that gas oils are not placed on the market in their territory if the sulphur content of these marine gas oils exceeds 0.10%" by mass”.

Alternative Fuels – lessons to learn Fuel Standards Bunkering Standards Bunker Delivery Note Quality Control HAZIDS at design stage Design for practical application Design for safety and efficiency

muchas gracias dragos.rauta@intertanko.com