PHASE – OUT OF SINGLE HULL

TANKERS

INTERTANKO LATIN AMERICAN PANEL November 16, 2005

Miami Beach, Florida

PHASE–OUT OF S.H. TANKERS

• USA – OPA 90 unchanged/clear/simple– 2010 drop date for all US ports– 2015 final drop date for all offshore & lightering

areas

• IMO – many rule changes - 1992/2001/2003– Reg. 13G – initial clear/complex after amendments– Reg. 13H – restricts # of cargoes on SH tankers

REG. 13G/20 (as amended 2001/2003)• the ”25/30 years” criterion replaced with• a (similar to) OPA 90 phase-out type schedule• phase-out by ship type & ship delivery date

– type 1 (pre-MARPOL) – out by end 2005– type 2 (PL/SBT) S.H. - out by end 2010 except when

Administration allows until the 25th anniverssary but not later that 2015 (13G(7))

– type 2 - DS/DB (as of 07/01/2001) – 25th anniverssary (pending Adminsitration approval; 13G(5))

– type 3 (all tankers under 20K DWT) – as ship type 2• CAS – ships 15 years and over – survey planning

compulsory (work with your Flag/RO well before due time)• BUT, 13G(8) gives Port State the right to deny entry

NEW REG. 13H/21 (amended 2005)

• ”heavy grade of oil” (HGO)• HGO is any oil with

– density 900 kg/cub.m and over (at 15 Celsius) OR

– kinematic viscosity 180 sq.mm/s (at 50 Celsiuis)

– plus bitumen, tar and their emulssions

• Application:– 04/05/2005 in DH only for ships above 5,000 dwt

– ship’s anniverssary date in 2008 in DB/double containment for ships between 600 dwt and 5,000 dwt

NEW REG. 13H/21(possible) Exemptions

• DS/DB (as was 12/4/2003) may transport HGO up to 25th anniverssary if Administration allows (13H(5))

• SH tankers over 5,000 dwt may transport crude oil with density up to 944.9 kg/cub.m up to 25th anniverssary if Adminsitration allows (13H(6)(a))

• SH tankers between 600 dwt and 5,000 dwt may transport HGOs up to 25th anniversary if Administration allows (13H86)(b))

• SH tankers or FPSO/FSU may transport/store HGOs in one country’s waters, if allowed (13H(7))

• BUT Port States can deny entry of any of the above (13H(8))

INTERTANKO Service

• http://www.intertanko.com/phaseout/

• phase-out calculator

• implementation policies (Flag & Port States)

• table with crude oil densities

• list of Parties to MARPOL

Flag / Port States 13G (5) 13G (7) 13G (8)(b) 13H (5) 13H (6)(a) 13H (6)(b) 13H (7) 13H (8)(b)

Australia Y1 N Y N N N N Y

Bahamas Y Y N/A Y Y Y Y N/A

Barbados Y Y N Y Y Y 7 N

EU Member States Y1 N Y N N N N Y

Greece N N N Y Y Y Y N

Hong Kong Y1 Y2 N N N N N Y

India Y Y N Y Y Y Y N

Japan Y1 Y N Y1 N Y3 - N4

Liberia Y Y N/A Y Y Y Y N/A

Marshall Islands Y Y N/A Y Y Y Y N/A

Mexico Y N Y N N N N Y

Panama Canal AuthorityPanama Maritime Authority

-Y

-Y

case by case basis

N-Y

-Y

-Y

-N

case by case basis

N

People's Republic of China Y N Y Y2 N N N Y

Republic of Korea - - - N5 N5 N5 N5 Y

Romania Y N Y N N N N Y

Singapore Y Y N Y Y Y Y N

United States N/A N/A N/A N/A N/A N/A N/A N/A

1 – not later than 20152 - 2015 or 20th anniversary which one is earliest3 - Japanese flag tankers until 2015 only if they have DB or DS4 – SH foreign flag tankers until 2008; DB or DS foreign flag tankers until their 25th anniversary5 – Korean and foreign flag tankers will not be allowed to enter Korean ports with HGOs as from 5 April 2006

DH Tankers - Age Distribution

Source: Joint Tanker Project

Tanker fleet double-hull development

Source: Fearnleys/INTERTANKO

%

622

51 59 67 70 73 76 84

9478

4941 33 30 27 24 16

0

20

40

60

80

100

1991 1997 End02

End03

End04

End05

End06

End07

End10*

DH SH/DB/DS

% dwt share*:

* Assumes phase out according to regulations (rounded upwards, 25 years after 2010.

Tanker incidents and age development

Source:LMIS/Informa/INTERTANKO

%

0

220

440

660

880

1100

0.0

3.2

6.4

9.6

12.8

16.0

Incidents

Age

Tanker pollution and age development

Source:LMIS/Informa/INTERTANKO

000 ts

0

130

260

390

520

650

78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04P05

0.0

3.2

6.4

9.6

12.8

16.0

Pollution

Age

Years

MARPOL Annex VI

Regulations for the Prevention of Air Pollution from Ships

INTERTANKO LATIN AMERICAN PANEL November 16, 2005

Miami Beach, Florida

RATIFICATION

• Ratified by 22 Governments that have a combined tonnage over 50% of World tonnage

• ENTERED INTO FORCE on MAY 19th, 2005• Ratification by:• Azerbaijan, Bahamas, Bangladesh, Barbados,

Bulgaria, Cyprus, Denmark, Finland, Germany, Greece, Japan, Liberia, Marshall Islands, Norway, Panama, St. Kitts and Nevis, Samoa, Singapore, Spain, Sweden, United Kingdom, Vanuatu.

IMPLEMENTATIONMission impossible?

• All Ships are to comply irrespective of Flag State – Article 5(4) of MARPOL Convention – “no more favourable treatment”

• But no obligation for ”non party” Governments• Many major ports still ”non-parties” (e.g USA, The

Netherlands, etc.)• Bunkering in a “non party” port followed by a call in

a “party” port – source of trouble out of ship’s control• Bunker Delivery documentation and Sample – here is

the difficulty – FSI 13 & MEPC 53

Certification & Survey under Annex VI

Certification application: any ship of 400 GT and above• New ships – before enter into service (built on or

after 05/19/2005)• Existing ships – not later that the first scheduled dry-

docking but not later than 05/18/2008Survey• Intial• Periodical (5 years)• Intermediate• Annual

MARPOL Annex VI

• Scope: Control of exhaust gas emissions from ships• Regulations for limiting/eliminating emissions of:

– Ozon-depleting substances– Nitrogen oxides (NOx)– Sulphur oxides (SOx)– Volatile organic compunds (VOC)– Shipboard incinerators

• Additinal requirements for:– Reception facilities– Fuel oil quality

Ozone-depleting substances

• Any deliberate emissions shall be prohibited

• New installation containing HCFCs (hydrochlorofluorocarbons) are permitted until January 1st, 2020

• These substances, when removed from ships, must be delivered to reception facilities

Nitrogen Oxides (NOx)• New engines (i.e. power > 130 kW, installed on ships

with buildng contract as from 01/01/2000) need to be compliant

• The NOx emission is limited to 17 g/kW h for engines operating at max. 130 rpm but reducing to 9.8 g/kW h for 2000 rpm and more. Between these revs the limit is designated by equation:

45 * n(-0.2) g/kW h• Existing engines can be run, but • Major Conversion:

– engine replacement after January 1st, 2000– substantial modification as defines in the NOx Tech. Code– the MCR of the engine is increased by more than 10%

Technical File

• Identification of components, settings and operating values which influences NOx

• Identification of the full range of allowable adjustments of alternatives for the components

• Full records of the engine’s peformance

• Onboard NOx verification method

Sulphur Oxides (SOx)

• Sulphur content of bunkers should not exceed– World wide trade 4.5%– Baltic Sea (from 05/19/2006) 1.5%– North Sea (from 10/2007 or 08/2007) 1.5%

• Alternative exhaust gas cleaning on:– funnel– IG scrubbers

Shipboard Procedures for SECAs

• Plan in advance for entry and enter commencement date/time of preparation in Logbook together with bunker type quantities onboard.

• Logbook record when entry requirements met and when ship enters SECA - remember Lat. & Long., date/time, together with bunker figures for each tank.

• Maintain daily record of bunker used and quantification of bunker tanks whilst in SECA.

• DO NOT COMMENCE SHIFT TO HIGH SULPHUR FUEL UNTIL EXIT FROM SECA. Log existing conditions for bunkers and Lat. & Long. with date/time.

Action Advantage Disadvantage

Timely switch over No equipment Excessive use of LSF

HFO & LSF in segregated tanks

Rapid change over

Lower LSF consumption

Retrofitting needed

Use of scrubbers Reduction 90% of SOx

Use of HFO only

Technology yet to be approved

Ship to demonstrate no environmental impact

Initial costs

Sludge deposits

Onboard blending Keeps costs down

Simpler tank arrangement

Liability of compliance on the ship

Need for a blending plant

Emission Trading If often operating in SECAs

Use of HFO

System not in place

Questionable whether allowed for a long period

ALTERNATIVES for SECAs

Volatile Organic Compounds (VOC)

• Specific control of VOC emissons in ports and terminals

• Tankers to have and use vapour collection systems (return lines) at the loading ports (VOC return manifold and operation standards in MSC/Circ.585)

• Ports/terminals to provide reception facilities for VOCs

• So far, very few terminals have such facilities• New technologies

Incinerators

• Incinerators installed after Jan. 1st, 2000 to meet regulations and must be certified to meet the specifications in MEPC Resolution 76(40) (Appendix IV of Annex VI).

• Each incinerator must have a manufacturer’s operations manual.

• Crew responsible for the incinerator operation shall be trained and follow the operation manual.

Operation of Incinerators

• The following substances are prohibited from incineration:– Annex I, II and III cargo residues and related packing

material.– PCBs.– Garbage as defined by Annex V containing heavy metals.– Petroleum Products containing halogens.

• PVC can only be incinerated in type approved incinerators.

• Flue gas temperatures shall be monitored and not less than 850 deg C for continuous feed and reach 600 deg C within 5 minutes for batch feed.

Fuel Oil Quality

• “Fuel oil shall be blends of hydrocarbons derived from petroleum refining”

• “Fuel oil shall be free from inorganic acid”• “Fuel oil shall not include any added substance or

chemical waste which either:– jeopardises the safety of ships or adversely affects

the performance of the machinery, or– is harmful to personnel, or– contributes overall to additional air pollution”

Fuel Oil Quality• Bunker Delivery Note (BDN)

– Becomes a Statutory document– Must be kept on board for 3 years for inspection and a copy may

be taken for further examination by PSC.– Must contain all data required by Appendix V

• Name and IMO number of vessel• Port• Date of Commencement of delivery• Details of fuel oil supplier• Product name, quantity , Density at 15 0C and Sulphur content

% m/m• A declaration that fuel supplied meets Regulation 14 and

18 requirements

Declaration on Fuel Oil Quality

• bunker suppliers should make the certification in the BDN in the column provided for supplier’s confirmation, as follows:

“We certify that the bunker fuel oil delivered meets the requirements of regulations 14 and 18 of Annex VI of MARPOL 73/78.”

Fuel Oil Quality - Sampling

• A sealed sample meeting the requirements in associated guidelines has to be supplied to the ship by the bunker supplier

• For each individual BDN a sample has to be taken at the vessel’s bunker receiving manifold. (see procedure in associated guidelines) – ISM Manuals !!??

• The sample label has to be signed by both the bunker supplier’s representative and the vessel’s Chief Engineer.

• The sample size shall be not less than 400 mls• The sample is not to be used for any commercial purpose• The sample is to be retained on board for at least 1 year for

inspection by PSC as required

Shipboard Procedures for BDN and Samples

• Adequate bunker manifold location for sampler attachment

• External safe storage location for samples for 1 year period

• Log book for sample retention and custody transfer

• Safe storage for BDNs and other documents relating to bunkering onboard

Bunker Emission Clause for time charters 1. Owners warrant that the vessel shall comply with the emission control and

other requirements of Regulations 14 and 18 of MARPOL Annex VI and any other laws or regulations relating to bunker specification and bunkering procedures applicable in any areas to which the vessel is ordered.

2. Charterers warrant that they will supply bunkers:– of sufficient quantity and quality to enable the vessel to meet the emission

control and other requirements of Regulations 14 and 18 of MARPOL Annex VI and any other laws or regulations relating to bunker specification and bunkering procedures applicable in any areas to which the vessel is ordered, and

– in accordance with the specifications in the latest version of ISO 8217 as at the time of supply and any other specifications contained elsewhere in this charter party.

3. Charterers further warrant that all bunker suppliers shall comply with the requirements of MARPOL Annex VI and MEPC96(47) in respect of sampling and the provision of a bunker delivery notes and, where bunkers are supplied in a state where MARPOL Annex VI is in force, that suppliers shall be registered in accordance therewith.

Port State Control

• IMO Guidelines for PSCO adopted at MEPC53

• Initial inspections and Primary survey parameters – then “Clear Grounds” required for in-depth inspections

• “In depth” inspection parameters

• Detainable deficiencies

• Non-Party ship inspections

Onboard certificates & documentation

• EIAPP Cert. And Technical File for each D/E• Record of Engine Parameters• Manual for onboard direct measurement and

monitoring (if applicable)• Official Log Book• Operation manual of Vapour collection system• Operation manual for Incinerator• Bunker Delivery Note - Ship’s Note to Flag States –

reports on non-compliance

INTERTANKO Guide to bunkering of ships for the purposes of Annex VI to MARPOL, June 2004

• ANNEX VI OF MARPOL - REGULATIONS – NOx Emissions; Regulation 13 – SOx Emissions; Regulation 14– Fuel Quality requirements - Regulation 18– The Bunker Delivery Note (BDN)– Bunker Sampling Procedure and Method to comply with Regulation 18– The Bunker Manifold Construction and Location– Prescribed sampling methods or system– Method for sub-sampling for Retention sample– Retention Sample Storage

• NECESSARY ALTERATIONS TO MEET ANNEX VI REQUIREMENTS– Pre-bunkering meeting and check list– Sampling and Measurement procedures– Post-bunkering documentation process

MARPOL Annex VIfuture developments/amendments

• MEPC 53 – July 2005 decided to open Annex VI for revision

• Possible revisions on:– World and SECA sulphur cap– New SECAs– Lower NOx limits

• Possible new requirements:– Include limits for PM– Require specific technologies to contain VOCs

Regional Requirements

• EU Sulphur Directive– 2000 – if used, MGO/MDO max. 0.2% sulphur content

– 2010 – as Annex VI + use of 0.1% sulphur content fuels for ships ”at berth”

– EU to promote its policies to IMO but will go its way if IMO too slow or not receptive to new proposals

• USA– Federal - EPA

– State legislations