SULPHUR CAP REGULATION 2020: A CRITIQUE

Effectiveness of the Regulation 4.2.1.1. of the MARPOL Convention (Annex VI) and alternative methods for reducing Sulphuremissions

Bodhisattwa Majumder*

In a revolutionary move to restrict and avoid climate change, the maritime industry faced a major change in the latest annexure to the MARPOL Convention (MARPOL VI). This was one of the prominent moves to check emissions by the maritime industry, where a cap of 0.50% m/m Sulphur content was fixed for the fuel for the vessels. The deadline for the same was fixed as January 2020, which is due soon. According to the annexure, the ships setting their sail from 2020 would use fuel with limited Sulphur content, except in cases where alternative “Equivalent” compliances have been installed.

This article analyses the present sulphur content in the vessels, alternative compliant fuels available and provide critical analysis to the previous emission regulations in the Maritime Industry. The author wishes to inspect the plausibility of such a change and analyze the feasibility in relation to the economic capabilities of the countries. Despite the ships always being a sustainable and efficient way to transport cargo, the amount of pollution caused is equivalent to all existing cars (presumption of clean fuel by cars). Hence, this issue needs to be dealt with as a top priority. The author proceeds with the hypothesis that the imposition of the sulphur fuel cap is not the optimal solution given the short period of transition and it is faced with multiple impediments.

The Amendment to Annex VI – Explained

The recent amendments to Annex VI of the MARPOL Regulations will prohibit vessels from carrying fuel oil having an excess of 0.5% Sulphur compound as of March 1, 2020.[1] The MARPOL regulations apply to all vessel and it suggests the SOLAS Contracting Governments take steps to ensure compliance by oil fuel suppliers ensuring the minimum levels required by the SOLAS Convention.[2] The Ships currently in use are known to use “Heavy Fuel oil” (HFO) or “Crude Oil” which consists of sulphur and emits smoke consisting Sulphur (SOx) compounds following the combustion process, which is harmful to human health and climate. It is also one of the primary causes of acid rains which harm the aquatic ecosystem and contribute to the acidification of the oceans.

Impediments to implementation of a fuel cap

Firstly, it can be assumed that the providers of the compliant gas are limited and might in most cases be most developed refining facilities which possess the infrastructure and machinery to do so in such a short transition. Assuming that, it is anticipated that a chief proportion of the active vessels will switch to Marine Gas Oil (MGO) in an effort to comply with the regulations. MGO has been taken into consideration as the most practicable and convenient manner of compliance as it does not require much upfront investment from Ship-owners, however it may come with better bunker charges. Secondly, this shift to the supplementary gas would cause the costs of the previous gas oil (heavy) to fall which could, in turn, push up the numbers for MGO. Thirdly, the reaction to this increased price of fuel would be the need for a larger credit base to back up the consumers and provide liquidity to the sellers, in order to remain in business. Lastly, the shift in fuel choices will additionally require a change in the lubes which are complementary with each fuel. Hence, the low sulphur cap regulation brings about drastic changes with the urging need of investment from sectors within the bunker-delivery chain thus raising challenging questions.[3]

Alternatives to the imposition of the fuel cap

There are various desulphurising types of equipment which can be used by the vessels to lower the sulphur level and use present heavy fuel oils with high sulphur content. Most prominent one being gas scrubbers, which are located in the flue gas ducts, between boiler and deck seal on inert gas plants. These scrubbers remove the sulfurous contents in the flue gas before it reaches cargo oil tanks. They can be also used to remove sulphurous products from the exhaust gas of diesel engines which reduces SO2 content as required by MARPOL VI.[4]

Various alternative fuels also can be used and opportunity technologies may be adopted to reduce the effects of sulphur expulsion. These measures are economically beneficial for the member states instead of a compulsory cap of sulphur, for the time being, if not for an everlasting basis. The vessels can use fuels such as liquefied Natural Gas or Petroleum gas.[5] However, the use of LPG isn’t thought of as a cost-efficient solution. The fees of LPG have shown exquisite volatility in costs as they are influenced by crude fees along with the seasonality effects.[6] Also, the investments required to equip the vessels with LPG as gasoline and the related safety issues gift a problem to the owners. The operators also can procure the Ultra-Low Sulphur Fuel Oil (ULSFO) with sulphur content material of 0.1%, which is already in use (ECA regions) and gives an inexpensive opportunity. The ULSFO possesses low sulphur content than HFO but better viscosity and occasional volatility than MGO. Alternatively, if the shortage of compliant gas poses as an impediment for converting the gas, the vessels can preserve to burn high-sulphur gas, if the vessel is prepared with an Exhaust Gas Cleaning System (scrubber), or if the vessel equips a Fuel Oil Non-Availability Report.

Conclusion

This transition is visibly unparalleled and difficult for both the Ship-owners and the refiners concerning the required supply and demand of the Sulphur compliant fuel. An overnight change from 3.5% to 0.5% is a herculean task for every player in the industry which is sure to accompany with a rise in prices and fuel scarcity. As the stringency and the enforcement procedure to ensure compliance is not known, neither the owners nor the fuel suppliers have been able to comprehend the requirement. Though the refiners cannot be regulated by IMO, they still would have to comply in order to meet the demands of the market. It is also a pertinent question dependent on the prices and supply of light fuel that, whether the ship-owners will prefer to buy compliant low sulfur fuel or adopt the alternative gas cleaning mechanisms such as scrubbers or alternate fuels. The industry faces very turbulent times ahead and only time will tell the results of this regulation.

*Bodhisattwa Majumder is a penultimate year student at National Law University Mumbai with specialization in Maritime Law. He can be reached at bodhisattwa@mnlumumbai.edu.in or +91-8240830901.


[1] The International Convention for the Prevention of Pollution from Ships, Regulation 14.1.3. Annex VI, 1973.

[2] The International Convention for the Safety of Life at Sea (SOLAS), Chapter II-2, Regulation 4.2.1.1., 1974.

[3] Martyn Lasek, What Does IMO’s 0.50% Sulphur Cap Decision Mean for the Bunker Supply Chain?, Exxonmobil (last visited Dec. 24, 2019), https://www.exxonmobil.com/en/marine/technicalresource/news-resources/imo-sulphur-cap-and-mgo-hfo.

[4] Cyril Hughes, Dictionary of Marine Technology (Headway Press Ltd. 1997).

[5] Jennifer L. DeWinter et.al., A national-scale review of air pollutant concentrations measured in the U.S. near-road monitoring network during 2014 and 2015, (2018).

[6] What will be the marine fuel of the future?, Baluco (Aug. 23, 2018), https://www.baluco.com/will-marine-fuel-future/.

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