Waiver uncertainty complicates IMO 2020 deadline

Shipping industry executives should not count on receiving a waiver if they are not able to comply with the International Maritime Organization (IMO) marine fuel sulphur cap in 2020.

Some shipping executives expect that ports, which can issue fines for the use of non-compliant fuel, will grant waivers in the initial months after the sulphur content deadline hits, so long as the shipping companies can demonstrate they made their best efforts to comply.

Shipowners have an obligation to report that they could not find compliant fuel to the country on which ports the vessel calls, under IMO rules.

Jeanne Grasso, an attorney at Blank Rome who specializes in maritime law, warned the delegates at the 25th annual Hellenic-American/Norwegian-American chambers of commerce joint shipping conference in New York yesterday that shipowners cannot count of exemptions even if they comply with those reporting requirements.

Shipowners "have to rely on the good graces of the port-state not to exercise enforcement", Grasso said.

But Nikos Petrakakos, vice president and head of maritime environmental innovation at investment bank Seabury Maritime, said he expects ports to be forgiving to shipowners that show compliant fuel was not available. If the fuel is available, they have to buy it, no matter the cost.

"As long you are not abusing them [waivers], you will get exemptions at least for the first six months to a year", Petrakakos said.

In 2015, when the sulphur cap in the Emission Control Areas (ECA) dropped from 1pc to 0.1pc, vessels stopping in Falmouth, UK, which is the last port before the ECA entrance at the English Channel, "were easily given waivers", he said.

Most of the non-availability waivers to be given at smaller ports, where compliant fuel might be scarce, he said. Smaller ports also might not have the extensive tank infrastructure to hold different types of bunkers, thus vessel owners with scrubbers might not be able to secure high-sulphur fuel there.