Bunker Quality: Regulation only Part of Solution

Ahead of IBIA’s Annual Convention in Hamburg 3-7 November, the bunkering association’s chief executive Peter Hall explains how the industry and regulators are taking steps to improve the quality of bunker fuel worldwide:

This October saw the beginning of a solution to the longstanding problem of poor fuel quality in the marine industry. The 67th meeting of the IMO’s Marine Environment Protection Committee (MEPC 67) in London agreed to establish a correspondence group to develop draft guidance for assuring the quality of fuel oil delivered for use on board ships, and to consider the adequacy of the current legal framework in MARPOL Annex VI for assuring the quality of bunkers. 

This is a move which has been welcomed by the International Bunker Industry Association (IBIA) as it begins to address the problem of fuel quality and sulfur compliance issues. Fuel quality has been deteriorating in recent years. Data collected by our members who include suppliers, ship operators and ports confirms that ever more samples are failing to meet the buyers’ specifications. 

According to a recent survey by bunker testing consultancy Intertek/Lintek Testing Services earlier this year, 28 percent of samples it made in the second quarter of 2014 were above the accepted level of quality expected by the buyer. Bunker quality is not just a commercial issue, but a real safety issue. Off-spec fuel could cause engine failure and cause a vessel serious difficulty, putting lives and the environment in danger. The advent of more low-sulfur fuel on the market will potentially exacerbate the problem unless steps are taken to improve the situation.

Although the MEPC did not agree to IBIA’s recommendation of introducing a bunker supplier licensing scheme, the decision to establish a correspondence group to develop draft guidance for assuring bunker quality is a compromise and a step in the right direction. 
IBIA believes that ultimately a ship cannot be held responsible for the quality of bunkers delivered and that the relevant authorities should take a more proactive role in ensuring that bunker suppliers deliver fuel that meets all the quality specifications agreed between buyer and seller, including sulfur content. 

In a paper submitted to IMO by IBIA, we argued that MARPOL Annex VI needs to “introduce specific criteria and requirements for the operation of local suppliers” to be enforced by the relevant local authorities. Critically, local suppliers should have procedures in place to ensure that they are in compliance. Regulation 18 of MARPOL Annex VI should have a declaration signed and certified by the fuel oil supplier’s representative that the fuel supplied conforms with the relevant sulfur limits and “is free from inorganic acid, does not include any added substance or chemical waste which either jeopardizes the safety of ships, adversely affects the performance the machinery, is harmful to personnel, or contributes overall to additional air pollution.  

We believe that local authorities should take action against local fuel oil suppliers that have been found to have delivered fuel oil that does not comply with that stated on the Bunker Delivery Note (BDN) or in response to Notes of Protest from ships of non-compliant fuel delivered in their jurisdiction. We believe that local authorities should have the power to revoke licences and put persistent offenders out of business. 

However, there does need to be a distinction between how authorities should respond to a test result which shows that a vessel has received bunkers marginally above the statutory sulfur limit, but within the commercially accepted 95 percent confidence limits for sulfur test results. We do not want the authorities making thousands of unnecessary investigations.

But regulation is only part of the solution. Supplier licence schemes do exist in some parts of the world, and even Singapore which has a well-enforced scheme, sees off-spec bunkers supplied from time to time and contractual disputes occurring. The key point is that good pragmatic regulation and enforcement will not eradicate fuel issues altogether, it will reduce them.

Another part of our proposal to the MEPC was to amend the Bunker Delivery Note (BDN) requirements. Again, this proposal will be considered by the MEPC’s correspondence group. We believe that there should be a requirement for buyers to define the specification, including sulfur content, and to require suppliers to deliver fuel oil to the specification agreed beforehand between supplier and buyer and that this should be registered on the BDN. The BDN should state the specification agreed between supplier and buyer of each product in terms of whether or not it is to an ISO 8217 specification, which edition or year was used, and to specify the grades as per tables one and two of ISO 8217. If the ISO standard had not been used, the BDN should note the agreed specification. 

A crucial step in improving standards must be the wider adoption of ISO standards. The majority of global suppliers currently still do not comply with the standards set out in ISO 2010, let alone ISO 2012. The ISO group is a private body made up of 34 energy companies and refineries and is currently working on the 2016 standard. ISO 2010 states that bunker fuel can contain a maximum of 0.5 percent water, 3.5 percent sulfur and 80ppm of aluminium and silicon. 

But it is not just the suppliers that need to sharpen up their acts, but also buyers. Samples taken on ships are very important to document standards, but all too often the sample has been taken incorrectly and cannot be analyzed accurately. Crews need adequate training and provided with the equipment and support needed to provide good samples. Buyers need to be more specific in stipulating the specification required e.g. ISO 8217 2012 rather than 2005.

The problem of off-spec and poor quality fuels is not going to go away overnight, but tougher regulation and a greater understanding between buyer and supplier will go a long way to resolving the situation. In keeping with a two pronged strategy of cooperation and regulation - IBIA is also working with key major bunkering ports around the world to promote best practice, in “Quality, Quantity and Transparency”. If you want to hear how your port can be part of the scheme contact [email protected]

Details of this strategy will be announced at our Annual Convention in Hamburg, 3-7 November. See here for further details.