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Regulatory changes to test industry resilience

Lee Hong Liang talks to Simon Neo from the International Bunker Industry Association about the challenges that lie ahead

coming years, the International Bunker Industry Association (IBIA) says. Sulphur content in bunker fuels will be limited


to a maximum of 3.5% starting from 1 January 2012 under the IMO's MARPOL Annex VI regulation. The current limit is 4.5% sulphur. This is just one of a string of regulatory changes that will happen over the next few years as IMO seeks to curb sulphur emissions from ships. “The year 2012 sees the next legislative change

that will affect the marine fuels industry. The supply side of the industry will be challenged to provide compliant fuels whilst the purchasers will have to source the fuel,” says Simon Neo, IBIA Asia branch executive committee chairman. “As emission control areas (ECAs) continue to expand, the need for compliant fuels will increase. Asia will be the last port of call prior to a ship entering an ECA,” he says. ECAs are designated geographic-based areas

with tighter emissions standards. Since 1 July 2011, a sulphur cap of 1% has been imposed on ships plying within ECAs. The sulphur limit will be further reduced to 0.10% from 2015. Europe's Baltic Sea and the North Sea fall under ECAs. Separately a North American ECA with a sulphur cap of 1% will become effective from 1 August 2012. IMO's regulation will also sharply reduce the

sulphur content of bunker fuel to a global limit of 0.5% by 2020. A review is up on 2018 to decide if this will be extended to 2025. The queue of measures taken to restrict

sulphur emissions shows that shipping, once considered as one of the more environmentally- friendly and cost-efficient modes of transport, is now regarded as a growing threat in the battle against climate change. The image that the industry is unable to shake

off is the fact that bunker fuels are the 'dirty' by- products of crude oil. If ships are to continue burning the heavy fuel oil, the only sensible way is to take appropriate measures to ensure that the harmful particles from bunker fuel are doing minimal damage to the environment. There are already proposals to completely ditch the use of bunker fuels and switch to

n imminent regulatory change for the global marine fuels industry will indicate how well the industry can adapt to future challenges over the

cleaner LNG instead. As with any other markets, technology and costs have to catch up, in this case, to a level where burning LNG becomes economically viable. Until that day, the bunkering industry will still be

known as the 'marine fuels' industry, which is already trying to combat sulphur emissions through the use of some other technologies such as scrubbers, windsails and dual-engine systems. The bunkering industry will undoubtedly

undergo permanent changes in the foreseeable future, for which a united voice for the industry, a potential role for IBIA, will become all the more important in tackling the challenges with various stakeholders. In growing the association, IBIA is continuously

engaging with its members and potential members mainly through industry seminars. “The series of seminars will be expanded and we will continue to endeavour to recruit more members in the Asian region, which is an expanding market with huge potential,” Neo says. It is also championing the development of

professionals within the bunker industry through its bunker courses and bunker cargo officer qualifications. Neo adds that IBIA continues to work hard to

raise bunkering's profile internationally and engage its members in resolving issues as they come along. One noteworthy value of IBIA is its consultative status at IMO. The association has submitted papers to the intergovernmental body and contributed to the review and amendment of MARPOL Annex VI. IBIA has recently addressed issues

pertaining to greenhouse gas emissions, and proposed to include minimum-maximum limits within ISO 8217 and enforce these as part of MARPOL Annex VI. ISO 8217, already into its fourth

edition (2010), specifies the requirements for marine fuels supplied on a global basis via custody transfer for consumption onboard ships. Work for IBIA at IMO will continue, the association assures its members, and IBIA can expect higher expectations from its efforts as its members increase.

Seatrade Bunkering Report 2011


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