On Monday the 22nd of October the UK Shipping Minister, Stephen Hammond MP, hosted a stakeholder meeting at the Department for Transport in London. The meeting brought together representative from the ship owning and operating, road transport, port operations, refining, technical abatement and classification industries. The attendees discussed how they see the implementation of the 0.1% fuel sulphur limit within Emissions Control Area (ECA) impacting the UK market and transport system. It is very positive that we now have certainty around the implementation of the legislation and a timeline for compliance. Everyone concerned now knows that the 1st of January 2015 is the date from which they must comply.
The UK Chamber of shipping expressed support for the desire to reduce harmful emissions and seemed to accept that scrubbing will form a significant part of the solution, it did however express concerns over “regulatory certainty”, by which it means the potential for ships to be liable for fines and even arrest if installed scrubbing systems fail. The Minister and his team were able to advise that the EC Directive does allow for vessels to be non-compliant in the event of an equipment failure as long as remedial action was planned in a “reasonable” timescale. Whilst accepting that a “reasonable” timescale probably needs a little more definition, it is nevertheless clear that regulators see that if operators have honestly invested in a means of technical compliance and it suffers a failure, as long as the operator is genuinely working to resolve the situation it will not be penalised.
The UK Petroleum Industry Association gave a very interesting presentation on the availability of 0.1% distillate fuels. It also highlighted that the refining industry has no intention of investing in residue desulphurisation technology, thus the logical solution is to remove sulphur from exhaust gas on ships.
There seemed to be little disagreement around the table that the high operational cost of compliant fuel would make the capital investment in scrubbing technology very attractive. The shipping industry however still seems to want to defer investment on the basis of a perceived immaturity of the technology. As we have commented in this blog before, this position is fast becoming untenable as the technology has moved forward and the offerings from ourselves and other suppliers have evolved, time is beginning to run out. We certainly hope that the status quo can be altered and the shipping and technical abatement industries can work collaboratively to solve the challenges they face.