Lack of guidance on 2020 fuel sulphur cap increasing risk of maritime accidents: IUMI

The International Union of Marine Insurance (IUMI) has called for urgent guidance and new rules to help safely implement the International Maritime Organization (IMO) 2020 fuel sulphur cap that is exposing the maritime industry to a whole range of growing risks. If action is not taken, IUMI is concerned that the shipping industry will be faced with additional expense that insurance will not automatically cover. The IMO 2020 sulphur cap, which will form part of theInternational Convention for the Prevention of Pollution from Ships (MARPOL),states thatthe sulphur content of any fuel used on board ships must not exceed 0.5% m/m by 1 January 2020. Owners and charterers are exposed to a range of risks as they attempt to comply with the regulation, and more still if they fall foul of its rules. IUMI said the introduction of the 2020 sulphur limit is “likely to increase the risk of machinery damage, which could lead to an increasing occurrence of maritime accidents”. The body has therefore called for new regulation that forces refineries to guarantee the quality of their fuel, and vessel operators to enhance their systems, processes and training to protect against the potential impact of using low-sulphur bunkers. In addition, it says the maritime industry urgently needs guidance on how to best implement the new regime. “We are relying on guidance coming out,” said Helle Hammer, policy forum chair at IUMI, which represents marine insurers around the world. Supply of new 2020 fuels are inconsistent and differ by supplier and port of delivery, explained IUMI. These fuels often contain a high level of catalytic fines, which onboard systems and processes often fail to filter out, it added. Differences in flashpoint and combustibility are also evident, it warned. Contaminated fuel adversely affects machinery performance and can lead to engine damage or failure, which could, in turn, result in collisions and consequent environmental impact, continued IUMI. Burning low-sulphur fuels brings the added risk of speed loss and the need for additional tank cleaning. The switchover from heavy fuels to low-sulphur alternatives increases the risk of a vessel losing power if this complex process is not managed correctly onboard, added IUMI. Currently, fuel testing is undertaken by the end-user. Since governments oblige ship operators to burn certain grades of fuel, IUMI believes refineries should be compelled to conduct testing and confirm the delivery of non-contaminated fuel. Ms Hammer, who is also managing director of the Nordic Association of Marine Insurers, said that currently, the end-user takes “all the risk” with fuel, which IUMI finds “unacceptable”. “Refineries should be compelled to conduct testing on fuel and confirm the delivery of non-contaminated fuel. There is no requirement on them today,” she continued. Ms Hammer explained that The Maritime Safety Committeehas agreed to develop a circular recommendation that all member states take appropriate action to ensure fuel supplied under their jurisdiction is compliant with IMO 2020 standards. This will hopefully be out later this year and IUMI wants to see refineries included. She said the maritime industry is also “urgently” waiting on a revised ISO 8217 standard and guidance on the use of fuel. This is planned for mid-2019. “Looking at quality of new fuels – MARPOL 2020 fuels – the contamination issue is there already. It will depend on each refinery’s configuration considerably. That is until we get more specific guidelines or standards. We wait for the ISO to hopefully present something in a few months’ time. It is urgently needed,” said Ms Hammer. “ISO will come out with instruction. They won’t have the revised standard, but instructions that will be very important. We are talking mid-2019 for that. And then there is also guidance being worked on now by fuel suppliers along with the owners,” she added. IUMI encourages all shipowners and charterers to pay attention to the guidance once released. “Everyone is waiting for that guidance. When the new industry guidance comes out we will do our very best to inform our members,” said Ms Hammer. Shipowners that fall foul of the 2020 fuel provision could have their MARPOL certificates revoked or suspended, which may lead to vessels being deemed unseaworthy. As pointed out by Clyde & Co recently, this could lead to insureds voiding insurance. Ms Hammer did not rule this out. “Under MARPOL, you are not supposed to take onboard something that is unfit for use. If that makes the vessel unseaworthy, will it then have insurance cover? Question mark,” she said.

Lack of guidance on 2020 fuel sulphur cap increasing risk of maritime accidents: IUMI

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