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Pandemic masks sulphur compliance picture

(Posted on 17/04/20)

It will be difficult to ascertain a full picture of how well the international shipping industry is complying with the new sulphur 2020 environmental legislation and judge the effectiveness of enforcement measures until sometime after the Covid-19 pandemic has receded, says maritime law specialist Hill Dickinson.

Introduced on January 1st this year, the implementation of Regulation 14.1.13 of Marpol Annex VI, was a key issue for the shipping industry, particularly in respect to how the sulphur cap was being observed and enforced. The horizon issue was the Carriage Ban, effective on 1 March 2020, which prevented any vessel not fitted with an exhaust gas cleaning system from carrying marine fuel with a sulphur content in excess of 0.50% m/m for use on board.

Beth Bradley, a Partner with Hill Dickinson, explained: “While a few issues arose concerning the quality of the low sulphur fuel, particularly some blended fuels having a propensity to sediment, and around marginal breaches of the cap, the implementation of the global sulphur cap was progressing smoothly with reports of high levels of compliance.

“Three months on and the disruption to international shipping caused by Covid-19 has pushed sulphur cap issues well and truly from the headlines. Regulation 14.1.3 remains in force – however, where Port authorities globally are prioritising health and the movement of freight, enforcement action will perhaps be less of a priority.”

The impact of the pandemic has led to serious delays to existing orders for the retro-fitting of exhaust gas cleaning systems, particularly for those vessel where the work was to take place in Chinese shipyards, or to cancellations as owners and operators seek to cut costs.

In addition, the collapse in the oil price has eroded the price differential between high sulphur and low sulphur fuel oil, making the immediate prospect of a larger uptake of exhaust gas cleaning systems doubtful, particularly if prices remain low for a significant period of time.

The UK’s Maritime and Coastguard Agency (MCA) recently announced that it was suspending vessel checks for compliance with low sulphur fuel regulations in order to keep freight moving, although it made clear that it will still inspect vessels where information is received indicating that an inspection would be appropriate. This is unlikely to be the last such announcement, predicts Ms Bradley.

Ms Bradley commented: “While the sulphur cap and the carriage ban remain in force such that owners risk enforcement action if they carry marine fuel with a sulphur content in excess of 0.50% m/m for use on board, the disruption caused by Covid-19 may reduce that risk where port state control is under pressure on other fronts. It also will make it difficult to ascertain a full picture relating to compliance and enforcement until sometime after the pandemic has receded.”