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News: De-bunkering of HSFO
News & Insights 2 January 2020
Members have been and continue to be faced with the need to de-bunker MARPOL Annex VI non-compliant fuel before the carriage ban comes into effect on 1 March.
Regulation 14.1.3 of Annex VI of the Marpol Convention (IMO Sulphur Cap) came into force on 1 January 2020. Members have been and continue to be faced with the need to de-bunker MARPOL Annex VI non-compliant fuel (ie HSFO with sulphur content in excess of 0.5% m/m). Whilst the carriage ban does not come into effect until 1 March, the ban on burning HSFO became effective 1 January. Flag states will now be expected to detect non-compliance and enforce the Regulation. It is worth noting that this would not apply to vessels which have had scrubbers/EGCSs retrofitted.
Owners will be conscious that a charterer may be less likely to charter a vessel which still has a large quantity of HSFO on board. Alternatively it may impact the likely charter rate. Considerations will of course differ between time charters, where charterers will usually pay for and supply fuel, and voyage charters, where owners will be responsible for this.
Conversely, and whether a time or voyage charter, primary responsibility for compliance with the amended MARPOL Annex VI will likely lie with owners. Most charterparties will contain a warranty that a vessel will comply with International (and National) rules and regulations (such as MARPOL) and that the vessel is legally fit for the chartered service, which would include compliance with MARPOL VI. Therefore it will be prudent to ensure charterparty terms are updated, if not done so already, to ensure risk/contractual liability are allocated to charterers where required.
Owners will of course need to give practical consideration to the timing of the removal of residual HSFO ie how and where? Owners will also be conscious that, subsequent to any debunkering of HSFO, effective cleaning of the fuel system (tanks, piping, service and storage tanks) will be required in order to be in a position to receive, store and burn compliant LSFO.
Owners will also need to ensure this does not conflict with any existing charterparty obligations. Furthermore, charterparty terms dealing with price of bunkers on delivery/redelivery may need to be updated to reflect the change in market prices.