BIMCO weighs in with help on charters ahead of low-sulphur fuel regulations

BIMCO weighs in with help on charters ahead of low-sulphur fuel regulations

BIMCO has published two IMO 2020 clauses for inclusion in charter parties relating to the content of bunkers after 1 January 2020, covering the transition from 3.5% sulphur content heavy fuel oil (HFO) to 0.5% low-sulphur fuel (LSFO).

The world’s largest shipping association, which counts over 65% of global tonnage within its membership, said it was also setting up a working group to examine if an exhaust gas cleaning system (scrubber) clause would be required.

Scrubber technology, which acts as a mini onboard refinery by washing sulphur from the fuel, will allow ships to continue to consume cheaper HFO after 1 January 2020.

Although it is expected that only around 5% of ships will have scrubbers installed by the start of IMO 2020 regulations, that proportion could increase substantially if the investment affords shipping lines a long-term advantage over competitors opting for LSFO.

Read the full article here 

 

BIMCO publishes two 2020 sulphur clauses

BIMCO publishes two 2020 sulphur clauses

The two clauses are:

  • BIMCO 2020 Marine Sulphur Content Clause for Time Charter Parties
  • BIMCO 2020 Fuel Transition Clause for Time Charter Parties.

“The subcommittee’s objective has been to create clauses that are simple and practical, and I’m confident we’ve achieved that objective,” says Peter Eckhardt, chairperson of the drafting committee and Head of Chartering and Operations at Reederei F. Laeisz.

The 2020 Marine Fuel Sulphur Content Clause replaces the BIMCO Fuel Sulphur Content Clause 2005 and can be incorporated into time charter parties as of now. The new clause forms an integral part of BIMCO’s Suite of Standard Bunker Clauses for Time Charter Parties.

“By making the 2020 Marine Fuel Sulphur Content Clause part of the Suite of Standard Bunker Clauses, it means that we have been able to keep the revised clause short and simple. It is written as a straightforward compliance provision with the sulphur content requirements of MARPOL Annex VI,” says Grant Hunter, BIMCO head of Contracts & Clauses.

Issues relating to the specifications, grades and quality/suitability of the fuel supplied by time charterers are covered by existing standard bunker clauses in time charters, so these should not need to be amended in relation to sulphur content alone.

Read the full article here

IMO2020: BIMCO clause highlights charterers’ obligations to dispose of noncompliant bunker fuel, keep every stem separate

IMO2020: BIMCO clause highlights charterers’ obligations to dispose of noncompliant bunker fuel, keep every stem separate

BIMCO’s 2020 Bunker Clause working group says it is pushing hard to finish work on two key clauses addressing the global switch to 0.50% sulfur content fuel on January 1, 2020.

Development of the draft for one of those clauses, the 2020 Transitional Fuel Clause, has highlighted some important points about the obligations of charterers when it comes to dealing with bunker fuels as the industry moves into 2020, particularly in light of the fuel oil carriage ban that was adopted last week at MEPC73 and ongoing concerns about bunker compatibility.

Read the full article here

Tackling IMO 2020: Final Countdown to Global Sulphur Cap Implementation Begins

Tackling IMO 2020: Final Countdown to Global Sulphur Cap Implementation Begins

The clock is ticking towards the 0.5% sulphur cap and although this is about to become effective globally in less than 18 months from today, the route to compliance remains challenging.

Challenges Ahead

1 Fuel availability in 2020 (refining capacity)

2 Fuel safety onboard ships;

3  Fuel price (achieve cost-effective compliance);

4  Global enforcement outside ECAs ;

5  PSC and violation penalties / Global enforcement regime;

6 Fuel quality and compliance with ISO 8217 standard;

7 Uncertainty on the cost of existing fuels in 2020 and market impact towards the next 10      years;

8  Upfront investment vs long term savings for operators given the lack of certainty;

9  Operational complexity of the fuels and technologies to comply with requirements;

10 Possible changes in the regulatory landscape.

IMO’s Ship Plan for Global Sulphur Cap

An IMO working group meeting has developed a ship implementation plan (SIP) supported by information documents as part of the work to provide guidance on preparatory and transitional issues leading up the 0.50% sulphur limit for marine fuels from 1 January 2020.

It was agreed ahead of the intersessional working group (ISWG) meeting of the Sub-Committee on Pollution Prevention and Response (PPR) last week, tasked with developing guidelines to support the consistent implementation of the 2020 sulphur limit, that these aspects needed to fast-tracked so they can be approved by the IMO’s Marine Environment Protection Committee (MEPC) in October this year.

Read the full article here