Industry giants partner with Maritime Blockchain Labs to trial new technology for enhancing fuel traceability
A number of leading players in the global shipping industry have teamed up to support a new project to harness blockchain technologies designed to improve the traceability of the shipping fuel supply chain.
Maritime Blockchain Labs (MBL), a subsidiary of Blockchain technology and governance experts Blockchain Labs for Open Collaboration (BLOC), announced late last week that it has launched a new consortium to explore how blockchain could help shipping operators better trace the source and quality of bunker fuels, including details on its environmental impacts.
The consortium includes Lloyd’s Register, Precious Shipping, Bostomar, BIMCO, International Bunker Industry Association (IBIA), and shipping biofuels specialist GoodFuels.
The group will explore how blockchain technologies could help to provide an “efficient, tamper-resistant and auditable chain of custody” for bunker fuels, providing assurances that can help operators meet tightening global regulations governing carbon emission reporting and air pollution.
The group said the ultimate aim was to reduce safety risks and create a “more trustworthy framework for accurately monitoring emissions from shipping such as sulphur, and carbon”.
“MBL takes an industry-led approach – meaning that the solutions will be identified, designed, and tested by the industry itself, with MBL facilitating governance and developing the technology to ensure these solutions are relevant and used,” said Deanna MacDonald, CEO and co-founder of BLOC. “A consortium approach is essential due to the need to cross regulatory boundaries and work within different organisational bodies and systems.
“Too often with blockchain, and digital initiatives in shipping in general, we see a top-down approach where new technology is pushed on the industry. However, this means that complex human and governance elements are ignored, limiting the eventual adoption and usefulness of the technology.”
Khalid Hashim, managing director at Precious Shipping, said there was a need across the industry for improved visibility over fuel supply chains.
“As an off-taker of marine fuels, it’s vital for us to ensure that the fuel we use is compliant – particularly when we think about the market post-2020, and the need to ensure the quality of blended products coming in to meet the 0.5 per cent Sulphur limit,” he said. “Blockchain is ideally placed to create the reliable chain of custody we need to do this.”
The shipping industry is facing growing pressure from regulators and ports around the world to curb air pollution linked to bunker fuel and step up efforts to tackle rising carbon emissions across the sector.
Earlier this year the International Maritime Organisation backed a new plan designed to improve emissions reporting across the industry and cut carbon emissions in half by 2050. However, the strategy was widely condemned by green groups for not being ambitious enough and failing to introduce more robust policies to drive greater investment in low carbon shipping technologies.
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The Paris MOU, Tokyo MOU, Indian Ocean MOU and Black Sea MOU port state control (PSC) regimes have agreed to focus on the prevention of ship air pollution during their forthcoming concentrated inspection campaigns (CICs).
The CICs will be carried out between 1 September 2018 and 30 November 2018, according to marine insurance and risk management company gard, and the Port State Control Officers (PSCOs) will pay particular attention to visiting ships’ compliance with MARPOL Annex VI during regular PSC inspections. The CIC checklist/questionnaire to be used by attending PSCOs will reportedly be published in August 2018.
However, gard said: “as some PSC regimes have recently announced that they will take enforcement of the new 2020 global 0.5% sulphur cap seriously from “day one”, the CIC may be considered a good opportunity to create awareness on the forthcoming requirements.
“Ship operators should therefore not be surprised if verification of the sulphur content of the onboard fuel is requested as part of the CIC. This could include a review of documents, such as bunker delivery notes, oil record books, fuel logs and fuel changeover procedures, as well as the taking and analysis of fuel samples at short notice.
“The ‘Sulphur Inspection Guidance’ published by the European Maritime Safety Agency (EMSA) contains useful information on what to expect from an attending PSCO.”
Not just SOx
gard pointed out that in addition to sulphur oxides (SOx), MARPOL Annex VI limits emissions of nitrous oxides (NOx) and prohibits the deliberate emission of ozone depleting substances (ODS). It also regulates shipboard incineration of waste material, and the emissions of volatile organic compounds (VOC) from tankers.
The risk management company said it is assumed that the questionnaire will focus on the maintenance and working condition of relevant equipment, such as the incinerator, but will mainly contain operational questions aimed at verifying the crews’ familiarity with the ship-specific equipment and procedures.
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In recent months, the upcoming IMO 2020 rule has increasing found itself a talking point among those traditionally unconcerned with the bunker and shipping industries,and with that there has been a growing sense of panic over what the new rule will mean.
That was in no greater evidence than this week in a new report by respected analyst Philip K. Verleger, who predicts the new global 0.50% sulfur cap for marine fuel could trigger nothing short of an economic collapse. Should that happen, it will prompt a global review of the new regs.
“If nothing changes, the 2020 diesel and gasoil crisis will occur because as many as half of world refineries cannot product fuel that meets the new regulation,” he said in the report released this week.
With a new global cap on the sulfur content of bunker fuel just around the corner, the prospect of myriad blended fuels is becoming more likely. But for a Singapore-based bunker surveyor that carries its own set of problems.
Blending residual fuel down to 0.5% sulfur “is not an exact science when it comes to certifying the levels of blending” Daljit Singh Pandher, group director at Royal Marine Group, was quoted as saying by price-reporting agency Platts.
Large U.S. refiners such as Valero and Philips 66 are set to benefit from a shipping fuel emission rule that will come into force in two years—one that has been bugging the oil industry globally.
The rule, set to enter into force in 2020, will require shipping companies to reduce substantially the amount of sulfur in their bunker fuel, which means the industry will need to find alternatives to fuel oil, of which the current rate of consumption is more than 4 million barrels daily.