sulphur regulations

Is there really a risk of non-compliance ?

With only a handful of months left until the IMO’s new sulphur regulations kick in, it’s a good time to reflect on how the Trident Alliance has already made a lasting impact, and chances are improving that the IMO’s new rules will be fairly and consistently enforced around the world.

Starting back in 2015, the IMO has made good progress with the development of regulations that help ensure a complete and successful implementation:

  • A ‘Carriage ban’ prohibiting vessels from having >0.50%S fuel onboard, unless equipped with a scrubber, or where the fuel is being carried as cargo. This regulation helps authorities enforce because it makes it possible to determine a vessel’s compliance based on the fuels onboard, without having to prove what fuels have been consumed where. The regulation takes effect on March 1st, 2020, but all vessels must comply with the regulation from the 1st of January 2020.

  • A new Bunker Delivery Note format puts an obligation on the fuel suppliers to be satisfied that the fuel that they provide can be used in a compliant manner.  In effect, it means if they supply high sulphur fuel (HSFO), they need to be satisfied that the vessel is equipped with a scrubber.

  • The IMO has also adopted several other regulatory measures for ensuring compliance with the 2020 sulphur limit, including a so-called FONAR (Fuel Oil Non-Availability Report) template which ships must use if they encounter non-availability in a port. A non-mandatory template for a 2020 Ship-Implementation-Plan was also agreed upon, which can be shown during a PSC. It will be up to each port State to decide which emphasis, if any, it will place on such a plan onboard. Finally, the guidelines for Exhaust Gas Cleaning Systems (e.g. scrubbers) were updated in a circular regarding what to do in case of scrubber breakdown.  

These regulations raise the stakes for any company that might try to cut corners on compliance. The risk of getting caught is increasing significantly. However, although these regulatory tools strengthen the hand of the enforcement authorities, a critical question remains: will they be put to the best possible use?

Much remains to be done

Adopting sulphur regulation is not enough by itself to achieve better environmental or health outcomes – as the cost of compliance rises it is increasingly important for regulations to be enforced for them to achieve their full benefit. Authorities have a key part to play in implementing regulation. That includes specifying the roles and responsibilities around monitoring and inspecting, making the necessary legal preparations, determining non-compliance penalties, etc. Enough resources to train staff, conduct inspections and develop effective detection methods must also be allocated, and investments in the associated equipment and infrastructure must be made.

Today, only about 30 countries have experience with enforcing sulphur regulations – mostly the nations with Sulphur Emission Control Areas (SECAs). Evidence from the introduction of the ECAs in 2010 and the tightening of the ECA limit 2015 shows that even with generous warning, proper preparation for and implementation of regulation takes time. It is crucial that all states work to ensure the necessary regulatory and enforcement frameworks are ready for January 1, 2020. On that point, it is important to note that there is an existing legal basis within the United Nations Convention on Law of the Sea which allows for port States to assert jurisdiction over SOx violations on the high seas when dealing with flag States that do not enforce Annex VI effectively, hereby providing a legal basis for imposing fines of such a magnitude that they can deter future violations.

The range and quality of enforcement tools and techniques have improved since the ECAs were introduced, but the 2020 global sulphur cap, which also applies to the high seas, presents new challenges. Among the enforcement tools being further developed are remote sensing technologies. The Trident Alliance welcomes this focus and supports the adoption of reliable, existing and new compliance detection techniques and technologies. Effective compliance detection and enforcement tools, when used in conjunction with the carriage ban, will be an important deterrent for anyone considering noncompliance.

Transparency as a deterrent

It is important that all nations, including all of those without previous sulphur enforcement experience, are ready by January 1, 2020. Even for those with prior experience in national waters (incl. Exclusive Economic Zones), it is unclear how they will they will meet their enforcement obligations on the high seas. One of the reasons it is unclear is because it is often difficult to determine how far nations have come in their 2020 preparations. There is a concerning lack of transparency from too many authorities on their enforcement arrangements. Authorities should share information on enforcement with one another. In fact, UNCLOS stipulates that this is an obligation for flag States.

Transparency can be a formidable enforcement tool, especially if combined with penalties for noncompliance which, to borrow from MARPOL, are “adequate to discourage violations”. Knowing that nations are prepared and that there are grave consequences for gross, deliberate non-compliance will focus minds and make very clear that there is simply no business case for choosing to be noncompliant.

Trident Alliance believes it is in the interest of responsible industry and other stakeholder groups for authorities to publicise the main points of their enforcement approach, including details of how penalties for non-compliance are determined.

Will there really be non-compliance?

The level of enforcement of the 2020 global cap and the level of compliance with it remain unknown.  If carriers are at risk of having to compete against the ‘one bad apple’, nothing but full compliance can be the goal of enforcement authorities. While doubt remains, there is an unacceptable risk to responsible businesses.  Fines for non-compliance should be sufficient to discourage violations.

What’s certain is the temptation for non-compliance will be significant, so if optimal levels of compliance with all its benefits are really to be expected, enforcement must be robust -- right from the start.