Analysis

Gard: Contaminated bunker issue continues to spread

Not known exactly how many vessels affected, but the number is estimated to be in the hundreds.

Published

7 years ago

August 30, 2018

Admin

Maritime protection & indemnity insurer Gard Tuesday issued a notice informing the shipping community of contaminated bunkers:

The recent spate of mechanical failures attributed to poor quality bunkers have resulted in excessive wear, blocking and damage to ships’ fuel systems. It is not known exactly how many vessels have been affected since the issue first surfaced in January 2018, but the number is estimated to be in the hundreds.

Why is the problem so complex?
It is chiefly for three reasons:

The source of the contamination is still unknown.
The problem is widespread and not limited to a region or supplier. Incidents have been reported following fuel oil deliveries in the US Gulf, Panama, Caribbean, Singapore, Malaysia and most recently Hong Kong. Furthermore, it is not possible to pin point the bad batches of fuel oil.
The presence of contaminants/adulterants cannot be detected by standard test methods meeting ISO 8217 thus making it very difficult for members to know if the bunker stem is contaminated.

What do we know about the contaminants?
USCG is the only authority to have released information on this issue so far, and both it and INTERTANKO have highlighted that compounds which normally do not form part of the marine fuel refining process have been detected in the bunkers when using advanced or more rigorous testing. These compounds include phenolic compounds, fatty acids, benzoic acids, cyclohexane diol isomers and dehydroabietic acid and other sticky compounds of an unknown nature. The presence of these or similar compounds in the bunkers is a breach of Cl.5 of ISO 8217 and Reg.18.3 of MARPOL Annex VI.

Exercise prudence
Some of the possible preventive actions owners and operators can take are:

Raise awareness: Make the crew aware of the problems that can occur when using contaminated fuel so that they can exercise prudence.
Heightened monitoring of machinery: Fuel pumps and injectors must be monitored very closely when using newly bunkered fuel. Any signs of machinery trouble must be investigated and fully documented and any affected parts must be preserved.
Improved planning: Where possible, maintain a sufficient fuel reserve which can be burnt if it is confirmed that newly stemmed bunkers are contaminated and cannot be consumed. This will enable the vessel to reach the nearest safe port.
Additional testing: Members and clients are advised to opt for advanced testing of the fuel samples to establish if contaminants are present. However, not all fuel oil testing laboratories offer such services and operators may experience delays in receiving the results of advanced testing.
Exercise caution when considering use of additives and dilution: If members and clients opt for the use of additives to remove certain harmful contaminants from the fuel advice should be sought from makers of the engine and fuel injection equipment to prevent any harm to the machinery. Similar recommendations apply where dilution is being considered, in which case compatibility checks should also be done.

Additional guidance
Members and clients are advised to refer to circulars produced by USCG and INTERTANKO on this issue for additional information.

Legal issues
When mechanical failures occur due to contaminated bunkers legal issues will arise either under a charterparty and/or the bunker supply contract.

Charterparties
Under time charterparties the starting point for both owners and charterers is what has been detailed in the bunker specifications clause. Owners might consider seeking cooperation of the charterer to do additional testing of the bunkers prior to consumption and if found to be contaminated, offloading them at the time and expense of the charterers. If the off-spec bunkers have been consumed, then detailed evidence will be needed from the owners to prove that the damage and/or loss resulted from the consumption of the off-spec bunkers.

Under voyage charterparties, the charterer will not be involved in any way in the supply of bunkers and this will be an owner’s matter to resolve under the bunker supply contract and the removal of the off spec bunkers from the vessel, if needed.

Bunker supply contract
Owners of voyage chartered vessels and time charterers should check which jurisdiction clause governs the bunker contract. Owners should also be aware of the time bar, which can be relatively short in such contracts. It would also be highly advisable that suppliers are requested to do additional testing of the bunkers being supplied, however, should the supplier refuse then buyers should reserve their position vis a vis the time bar in the contract.

Source: Gard
Published: 30 August, 2018

Research

Yamna identifies five potential global ammonia bunkering hubs

Unlike methanol, ammonia is not constrained by biogenic CO2 availability, and its production process is relatively simple.

Published

4 months ago

December 31, 2024

Admin

Specialised green hydrogen and derivatives platform Yamna in early December identified several potential ammonia bunkering hubs around the world.

The hubs are Port of Rotterdam, Port of Algeciras, Suez Canal, Jurong Port, and Port of Salalah.

“The shipping industry faces an ambitious challenge: reducing emissions by 20% by 2030 (compared to 2008 levels) and achieving net-zero emissions by 2050, in alignment with IMO targets,” it stated.

“Achieving these goals in the medium to long term depends on the adoption of alternative low-emission fuels like green ammonia and methanol.

“Among these, ammonia is attracting growing interest as a viable option. Unlike methanol, it is not constrained by biogenic CO2 availability, and its production process is relatively simple.”

However, the firm noted kickstarting ammonia bunkering on a large scale required four enablers to align:

Ammonia fuel supply
Application technology
Bunkering infrastructure
Safety guidelines and standards

It believed ammonia bunkering hubs will first emerge where affordable and scalable ammonia supply is available.

Yanma Why use ammonia for bunkering fuel

Photo credit: Yanma
Published: 31 December 2024

Research

Port of Long Beach releases Clean Marine Fuels White Paper

Document intended to prepare and position the port and its stakeholder for adopting low carbon alternative fuels.

Published

4 months ago

December 26, 2024

Admin

Clean Marine Fuels Port of Long Beach (December 2024)

The Port of Long Beach (PLB) in late December released the Clean Marine Fuels White Paper as part of efforts to identify solutions capable of reducing emissions from ships.

“To understand the opportunities and challenges related to the adoption of clean marine fuels, the Port of Long Beach hired ICF Consulting to develop this white paper as an educational resource and guidance document,” stated PLB

“This document is also intended to prepare and position the port and its stakeholder for adopting low carbon alternative fuels.

“The white paper provides high level information on the array of currently available low carbon marine fuels, along with an exploration of the potential infrastructure needs for their deployment.”

The document covers the use of different types of clean bunker fuels such as green hydrogen, green methanol, green ammonia, renewable LNG and biofuels for shipping.

“The shift to clean marine fuels is no longer optional but a necessity for the sustainability of the maritime industry,” stated PLB in its closing remarks.

“This transition, while presenting challenges such as high costs, limited fuel availability, and the need for extensive infrastructure development, is advancing due to evolving policy frameworks and growing industry commitment.

“Addressing these obstacles will require targeted initiatives and robust collaboration between public and private sectors. Continued policy support, government funding, and sustained industry commitment will be essential to driving this progress and ensuring the long-term sustainability of maritime operations.”

Editor’s note: The 123-page Clean Marine Fuels White Paper may be downloaded from the hyperlink here.

Photo credit: Clean Marine Fuels White Paper
Published: 26 December 2024

Port & Regulatory

Clyde & Co: FuelEU Maritime Series – Part 6: Legal issues

Bunker purchasers should consider the wording of their bunker supply contracts carefully and ensure that they are comfortable with the contractual provisions.

Published

4 months ago

December 26, 2024

Admin

Global law firm Clyde & Co on Thursday (19 December) released the final instalment of its six-part series uncovering the FuelEU Maritime Regulation.

In it, the firm looked at the legal issues that could potentially arise between various parties, such as owners, charterers, ship managers, bunker suppliers, and ship builders, as a result of the compliance requirements imposed by the Regulation.

The following is an excerpt from the original article available here:

Bunker supply contracts - legal issues

Both vessel owners and bunker purchasers will want to ensure that they are able to take advantage of the preferential treatment provided under the FuelEU Regulation for consuming renewable fuels, including biofuels and renewable fuels of non-biological origin (RFNBOs) (such as methanol and ammonia).

Article 10 of the FuelEU Regulation states that such fuels must be certified in accordance with the Renewable Energy Directive (RED) 2018/2001. If the fuel consumed by the vessel does not meet the applicable standards or have the appropriate certification, then it “shall be considered to have the same emissions factors as the least favourable fossil fuel pathway for that type of fuel”[1].

In order to confirm that the fuel complies with greenhouse gas (GHG) intensity and sustainability requirements, the vessel owner and bunker purchaser will want to ensure that the bunker supplier provides the appropriate certification required under the FuelEU Regulation. The EU has required certification of such fuels, with the aim of guaranteeing “the environmental integrity of the renewable and low-carbon fuels that are expected to be deployed in the maritime sector.”[2]

The FuelEU Regulation provides that the GHG intensity of fuel is to be assessed on a “well-to-wake” basis, with emissions calculated for the entire lifespan of the fuel, from raw material extraction to storage, bunkering and then use on board the vessel.

Vessel owners and bunker purchasers will, therefore, need to be mindful of the importance of establishing how “green” the fuel actually is, and of the risk of bunker suppliers providing alternative fuels that will not allow for preferential treatment under the FuelEU Regulation.

It would, therefore, be advisable for bunker purchasers to consider whether the wording of their bunkering supply contracts is sufficient to ensure that the fuel is properly certified under the FuelEU Regulation. This could include contractual provisions that require the supplier (i) to provide a bunker delivery note (BDN), setting out the relevant information regarding the supply (such as the well-to-wake emission factor), and (ii) to provide the necessary certification under a scheme recognised by the EU.

Bunker purchasers should also be mindful that bunkering supply contracts often contain short claims notification time bars and provisions restricting claims for consequential loss. Issues could therefore arise where a purchaser tries to advance a claim against the supplier for consequential loss due to a lack of certification, but the bunker supplier argues that such losses are excluded under the terms of the bunker supply contract.

Bunker purchasers should therefore consider the wording of their bunker supply contracts carefully and ensure that they are comfortable with the contractual provisions.

Photo credit: CHUTTERSNAP from Unsplash
Published: 26 December 2024