objective of
the ABS Regulatory
Affairs department is to support our clients in coping with forthcoming
regulations and providing to the regulators the feedback from ship operators in order to assist in the
development of a fair regulatory framework, assuring level playing field.
Operators face volatile compliance costs based on the fluctuating carbon price which reached almost 100 euros/ton of CO2 at the beginning of February, fell to around 60 Euros/tonCO2 due to the war in Ukraine and quickly recovered to around 80euros/tonCO2.
Regarding FuelEU Maritime, discussions include whether to lower the ship size threshold from 5,000 GT to 400 GT and the role of the independent verifier for the penalty calculation.
Operators have already started calculating their compliance costs and fuel compliance options. Fossil LPG and LNG burned in engines with low methane slip seem to be a compliant option up to 2040 based on the default values provided into the regulatory text for calculation of the GHG intensity.
It is expected that discussions will continue this year, with the EU Parliament starting negotiations with the Council in June. Legislative text for EU ETS and FuelEU Maritime will be concluded by the co- legislators and in trialogues with the Commission and adopted, after which the ESSF sub-groups will start discussing and formalizing the necessary Delegated and Implementing Acts – a process which is not expected before 2023.
A new ECA?
Another consideration for operators planning their fuel selection strategy is that countries bordering the Mediterranean Sea have set
out a proposal to designate the Mediterranean Sea as an Emission Control Area for Sulphur Oxides. The proposed ‘Med SOx ECA’, would operate in accordance with Regulation 14 and Appendix III of MARPOL Annex VI, to take effect from 1 January 2025, setting the sulphur content of fuel oil used on board a ship within its boundaries not exceeding 0.10% m/m.
Specifically, the proposed Med SOx ECA includes all waters bounded by the coasts of Europe, Africa and Asia, as well as:
- the western entrance to the Straits of Gibraltar,
- the Dardanelles, - the northern entrance to the Suez Canal.
The designation of the proposed Med SOx ECA is supported by an acknowledged need to prevent, reduce and control emissions of sulphur oxides and particulate matter from ships.
Conclusion
The objective of the ABS Regulatory Affairs department is to support our clients in coping with forthcoming regulations and providing to the regulators the feedback from ship operators in order to assist in the development of a fair regulatory framework, assuring level playing field.
We have already started working with shipowner associations and the department has a
new, additional objective to enhance ABS’ engagement with administrations and regulatory bodies and support the industry with compliance guidance offering detailed insight and guidance on the impacts of today’s unprecedented and dynamic regulatory environment.
About ABS
ABS is defined by a vision, a mission, and a core set of traits. As important today as they were in the past, these characteristics define how they approach their work. Founded in 1862, ABS is a global leader in providing classification services for marine and offshore assets. Their mission is to serve the public interest as well as the needs of their members and clients by promoting the security of life and property and preserving the natural environment. ABS’ commitment to safety, reliability and efficiency is ever-present. ABS continues to lead in industry safety metrics – including a record three-year achievement for zero lost time work-related incidents for 2017 - 2019.
Today, ABS is working in a rapidly changing business environment where global markets are shaped more frequently by digital technology and data analytics. They are applying advanced technology, digital tools, capabilities and improved core processes to drive safety excellence, greater performance and efficiency. ABS continues to be a trusted advisor and partner, supporting marine and offshore business ventures for both traditional and non-traditional clients.
The Report • June 2022 • Issue 100 | 93
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