1. BUNKER FUEL REGULATIONS Latest updates/status & an INTERTANKO VIEW
ERTC 15th Annual Meeting
Istanbul November 30, 2010
Dragos Rauta
INTERTANKO

2. INTERTANKO International Association of Independent Tanker Owners
A non-governmental organization established in Oslo in 1970 to
represent the interests of independent tanker operators
at international, regional, national and local levels
260 Members
45 countries
3,100 tankers
250 million dwt
330 Associate Members
Spokesman – information service - meeting place
23 Secretariat
Oslo, London, Washington & Singapore
14 Committees and 5 Regional Panels
Bunker Sub-Committee (tanker operatos, IBIA, test labs)

3. REGULATIONS/STANDARDS
IMO
MARPOL ANNEX VI
GREENHOUSE GAS EMISSIONS (GHG)
SOLAS
REGIONAL
EU SULPHUR DIRECTIVE
CALIFORNIA AIR RESOURCES BOARD
ISO 8217:2010

4. IMO - MARPOL ANNEX VI Limits SOx emissions
Includes PM (particulate maters)
Compliance through sulphur content in fuels
Alternative methodologies accepted as Equivalent Measures
Addresses marine fuel oil quality
Recommends no measures on ships if supply is not adequate
Guidelines to asses compliance if BDN data is challenged by PSC (or by lab test results)

5. SULPHUR LIMITS IMO APPLICATION DATES
IMO Global S limit (by weight)
current %
1 July %
1 January 2020/(2025) 0.5%
IMO ECA S limits (by weight):
up to 1 July %
1 July %
1 July %

6. MARPOL ANNEX VI ECAs
62˚N
4˚W
ECA 1
ECA 2
57˚44.8’ N
5˚W
48˚30’N

7. MARPOL ANNEX VI ECAs Entry into force 1 August 2012 ECA 3 200 nm
Caribs?

8. REGIONAL REGULATIONS ON BUNKERS
EU SULPHUR DIRECTIVE
as MARPOL Annex VI sulphur provisions
additional provision: use of 0.10% sulphur content fuel (or alternative) when ships ”at berth” (1 Janaury 2010)
MGO/MDO on the EU market should have < 0.1% S content (1 January 2010)
CALIFORNIA AIR RESOURCE BOARD (CARB)
use of marine distillates within 24nm off shore
sulphur content in the marine distillates:
current – MDO max. 0.50%; MGO max. 1.50%
after 1 January MDO/MGO max. 0.10%

9. APPLICATION DATES & S Cap
HFO
MGO
LSFO
MDO/MGO
MDO
MGO

10. MARPOL ANNEX VI Regulation 4 – Equivalent measures
An Administration may allow any fitting, material, appliance or apparatus to be fitted in a ship or other procedures, alternative fuel oils, or compliance methods used as an alternative to that required by this Annex if such methods are at least as effective in terms of emissions reductions as that required by this Annex
This means the Administration (and not the ship) have to acknowledge that:
technologies have equivalent efficiency in terms of SOx, PM and NOx.
they do not harm the environment
they operate within the requirements of the IMO guidelines

11. MARPOL ANNEX VI FUEL OIL AVAILABILITY
IMO set up a correspondence group to consider establishing a methodology to determine the availability of fuel to comply with the global sulphur limit in 2020
Supply/demand models
Consider
current experience with supply
new ECAs
shipping increased efficiency
use of alternative fuels, e.g. LNG
use of alternative technologies, e.g. scrubbers

12. GLOBAL BUNKERING One - third of bunkers are supplied in ECA ports
Marine distillates on EU must have < 0.10% sulphur content
Source: Poten & Partners

13. GREENHOUSE GAS EMISSIONS
Efficient Designs
Efficient Operations
Ship Energy Efficiency Management Plan
Market Based Mechanisms (MBMs)

14. EFFICIENT DESIGNS Energy Efficiency Design Index (EEDI)
- require a minimum energy efficiency of new ships
- technical and design based measures only
- Environmental Cost: CO2 emissions
Benefit: Cargo capacity transported
Attained index < Required index

15. EEDI REQUIRED - TANKERS
Required Index/ Phase 0 = no reduction (2013 & 2014)
EEDI
IMO impact analysis
10%
Req. Index
Phase 1
20%
Req. Index
Phase 2
30%
Req. Index
Phase 3
on and after 2025
DWT

16. - operational and commercial measures
SEEMP
Ship Energy Efficiency Management Plan
- operational and commercial measures
Developed as a ship-specific plan by the ship owner
What the Plan should look like in four parts
Planning: Package of measures identified & Goal setting
Implementation: Implementation system
Monitoring: Monitoring system (tools and record keeping)
Self-evaluation & Improvement: Voluntary reporting

17. OPERATIONAL INITIATIVES
INTERTANKO is actively involved in developing best industry practice together with other stakeholders, particularly charterers, for a better planning of the voyage with the view of reducing CO2 emissions.

18. GHG REGULATORY IMPACT ON BUNKERS
Less fuel consumption/tonne-mile
Current suggestions for fuel efficiency
savings > 10% by 2020
savings > 30% by 2030
Search for higher specific energy fuels
Still an increase in demand of bunkers but maybe slower than recent historical data
Still fossil fuels but which type

19. CHALLENGES FOR SHIPS Switching between at least 3 grades of fuel
Calling at EU/Californis ports, ships use:
Deep sea fuel (HFO)
ECA fuel (LSFO)
EU - ”at berth”/”at anchor” fuel (MGO)
California – MDO/MGO fuel
Onboard storage & segregation capacity
Increase risk of fuel incompatibility
Increases the risks of incidents
Viscosity, lubricity, flash point temperature
Need of closer monitoring of fuel quality

20. FUEL OIL QUALITY MARPOL Annex VI - REGULATION 18
blend of HC derived from petroleum refining
free from inorganic acid
should not include any substance or chemical waste which:
jeopardise ship safety and adversely affects machinery
is harmful to personnel
contributes to overall addition to the air emissions
Annex VI – Regulation 18 does not define parameters for a fuel oil standard
Annex VI – Regulation 18 requires MARPOL sample & BDN guaranteeing fuel compliance

21. REPORTED PROBLEMS WITH MARINE FUEL OILS
HIGH ABRASIVE FUELS
HIGH ASH
LOW FLASH POINT
HIGH SEDIMENTS
HIGH DENSITY
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)

22. FUEL QUALITY - BDN INFORMATION
Name and IMO Number of receiving ship
Port
Date of commencement of delivery
Name, address, & tel. number of marine fuel oil supplier
Product name
Quantity in metric tons
Density at 15°C, kg/m3
Sulphur content (%m/m)
A declaration signed and certified by the fuel oil supplier’s representative that the fuel oil supplied is in conformity with the applicable subparagraph of regulation 14.1 or 14.4 and regulation 18.3 of this Annex.
HOW IS THIS ASCERTAINED?
ACTUAL or TYPICAL VALUES?
ISO 8217:2010 TO PLAY A ROLE? WHO CONTROLS?

23. ISO 8217:2010
New grade DMZ (as DMA grade but minimum 3 cSt)
DMA grade minimum 2 cSt
Previous DMC grade has been re-defined as residual fuel (RMA grade)
Additional criteria and specifications for:
hydrogen sulphide (H2S)
acid number
oxydation stability
lubricity

24. ISO 8217:2010 Sulphur limits related to MARPOL Annex VI
Values for ash reduced
Value for Al + Si reduced
New informative Annexes on:
bio-derived products
deleterious materials
hydrogen sulphide
Positive development but . . .
ISO 8217 is not referred to in MARPOL
Could some criteria be used in the BDN?

25. IMO/ISO AGREED “APPROPRITAE PARAMETERS”
“Appropriate parameters considered by ISO to be pertinent to fuel oil quality with respect to air quality, ship safety, crew health and engine performance”
Density at 15ºC
Kinematic Viscosity
Vanadium
Al + Si
Cetane Index
Ignition Quality (CCAI)
Fuel Stability
Flash Point - minimum value required under SOLAS II-2, regulation

26. IMO/ISO AGREED “APPROPRITAE PARAMETERS” (cont)
“Appropriate parameters considered by ISO to be pertinent to fuel oil quality with respect to air quality, ship safety, crew health and engine performance”
Pour Point
Water
Sodium
Acid Number
Lubricity HFRR
Micro Carbon Residue
Ash
Sulphur - maximum value required under MARPOL, Annex VI, regulation 14
Appearance (for transparent fuels)
Used lubricating oil (ULO) - free of such elements as required by MARPOL Annex VI, regulation 18
Zinc
Phosphorus
Calcium
Hydrogen Sulphide - value required to be given by SOLAS/MSDS

27. MEASURES TO CONTROL FUEL QUALITY
Stricter enforcement of Reg. 18 of MARPOL Annex VI:
Port Authorities keep registries of local recognised bunker suppliers; make these available for publication on the IMO web site
Port Authorities to report the results of investigations & eventual follow-up actions in response to any Note of non-compliant fuel delivered in their jurisdiction
Port Authorities should consider not allowing fuel blending during delivery to ship (Singapore MPA already forbids onboard barge blending)
Singapore MPA Code of Practice for Bunkering (SS600:2008) and Quality Management for Bunker Supply Chain (SS524:2006) are excellent examples

28. MEASURES TO CONTROL FUEL QUALITY
Improvements to MARPOL Annex VI:
Include in the BDN a number of “appropriate parameters” jointly recognised by the IMO and ISO as pertaining to seafarers' health, safety of the ship and air emissions
Port Authorities to set up a system monitoring compliance of bunkers delivered to ships
Consider the safety and environmental improvements if residual fuels would be treated (i.e. purification) prior to delivery to ships

29. Thank you For more information, please visit: www.intertanko.com
London, Oslo. Washington and Singapore

30. N AMERICAN ECA - COST IMPACT*
Extra costs of a VLCC (2 m bbls) for a round trip of 400 nm :
Premium MGO Extra cost (%)
$200/t $40, %
$500/t $100, %
Apparently US and Canada will have minimal problems to ensure supply
* Poten Fuel Oil Monthly Opinion, 6 April 2010