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IUMI Ocean Hull Committee Chairman shares marine insurance perspective of IMO 2020

Few cases of ISO 8217:2017 (bunker fuel standard for marine distillate fuels) found to be inadequate; IUMI engaging parties to reduce risk of bunkers not meeting requirements.

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The Singapore Maritime Foundation on Monday (20 April) published an article outlining the impact of IMO 2020 on shipping and marine insurance; it was written by Rama Chandran, Chairman of the Ocean Hull Committee at the International Union of Marine Insurance (IUMI): 

2020 began with one of the most significant changes to the global maritime industry: the enforcement of the International Maritime Organisation (IMO)’s 2020 Sulphur Cap. Vessels operating outside designated emission control areas have to adhere to a drastic reduction of sulphur oxide emissions from 3.5% to 0.5%. The bold but necessary move to reduce sulphur oxide emissions was implemented with the goals of improving air quality and health, and making shipping a more sustainable and environmentally friendly form of transportation.

In the lead-up to 2020, ship owners were presented with the options of installing exhaust gas cleaning systems, also known as scrubbers, on their vessels or switching to compliant fuels such as marine gas oil, ultra-low sulphur fuel oil (ULSFO) or very low sulphur fuel oil (VLSFO).

Traditionally, most ships run on Heavy Fuel Oil (HFO). Some ship owners chose to install scrubbers on their vessels as they foresaw a fall in HFO prices with the introduction of IMO 2020. However, this was not an easy option in view of the cost and off-hire expenditures required.

The alternative of switching to compliant fuels was made easier with the assistance from various parties within the shipping community, including classification societies, engine manufacturers and bunker suppliers. However, such a transition was bound to introduce unprecedented risks. At present, the adoption of compliant fuels is still in its infancy for most ship owners, thus there are still some uncertainties with regards to its implications. Apart from potential damage to the vessels’ main and auxiliary engines as well as fuel systems, there is a risk of grounding and collision arising from the failure of the main propulsion engines. It is imperative that shipowners engage all service providers to ensure that such risks are significantly mitigated or eliminated.

Three months into the implementation of IMO 2020, the maritime industry is starting to settle down, albeit still facing some challenges.

The Impact on Marine Insurance

Globally, machinery claims have remained at elevated levels in recent years. In fact, in the last five years, it has averaged 40% to 45%. Currently, it does not provide much allowance for large losses that might happen from time to time. With the implementation of IMO 2020, the possibility of increased machinery claims is a significant concern to underwriters.

Hull and machinery underwriting has always been a difficult task, with many variables to be considered, including the quality and risk management processes employed by ship owners. At this point in time, underwriters are still monitoring the impact of IMO 2020 on hull and machinery premiums, and it is hoped that premium adequacy will be achieved in the next year or two.

At IUMI, a professional body representing national and international marine insurers, we are gathering information to establish any clear trends to update the global underwriting fraternity, in order for them to better engage their clients and provide them with more adequate prices. As Chairman of IUMI’s Ocean Hull Committee, I hope to discuss this extensively at the IUMI conference in September this year.

In addition, as there have been a few cases where ISO 8217-2017 (fuel standard for marine distillate fuels) was found inadequate, we are engaging relevant parties to improve the risk of bunkers not meeting the requirements of ship owners. Besides keeping track of the impact of low-sulphur fuel on the vessels’ main and auxiliary engines as well as fuel systems, we are also observing the impact of scrubbers fitted on vessels.

Navigating the Road Ahead

As the maritime industry continues to navigate through changing currents, the marine insurance sector should be on a constant lookout for new opportunities and challenges in the market, and proactively engage its clients to ease them into changes.


Source:
Singapore Maritime Foundation
Photo credit: stevepb
Published: 30 April, 2020

 

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Legal

Singapore police arrest eight over alleged illegal MGO transaction off Tuas

SPF says preliminary investigations found that crew members of a Singapore-registered tugboat misappropriated MGO worth about SGD 10,570 without their company’s knowledge and sold it illegally.

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Singapore police arrest eight over alleged illegal MGO transaction off Tuas

The Singapore Police Force (SPF) on Thursday (13 August) said it has arrested eight men, aged between 25 and 54, for their suspected involvement in an illegal transaction of Marine Gas Oil (MGO).

On 13 August 2026 at about 1.05am, officers from the Police Coast Guard (PCG) conducted a check on a Singapore-registered tugboat in the waters off Tuas and discovered that eight crew members were possibly involved in the illegal transaction of MGO. 

“Preliminary investigations revealed that the crew members of the tugboats misappropriated MGO valued at about SGD 10,570 (USD 8,258), without their company’s knowledge,” SPF said in a statement.

“The MGO was sold illegally for their personal financial gain.”

The eight crew members will be charged in court on 14 August 2026 with the offence of theft by servant of property in possession of master under Section 381 of the Penal Code 1871 If convicted, they shall be punished with an imprisonment term that may extend to seven years and shall also be liable to fine.

“The Police take a serious view of illegal transaction of MGO in Singapore Territorial Waters and will continue to conduct enforcement and security checks to prevent, deter and detect such illicit activities in Singapore waters,” SPF added. 

 

Photo credit: Singapore Police Force
Published: 14 August, 2026

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Port & Regulatory

Gard: Sulphur-related bunker claims rise amid tighter China MSA enforcement

Claims involving excessive sulphur content in marine fuels have been rising, while stricter inspections by the China MSA have heightened the focus on sulphur compliance, particularly in the Bohai Sea.

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Maritime protection and indemnity (P&I) club Gard on Wednesday (12 August) highlighted that claims involving excessive sulphur content in marine fuels have been rising, while stricter inspections by the China MSA have heightened the focus on sulphur compliance, particularly in the Bohai Sea:

Rise in off-spec sulphur claims

Recent claims experience indicates that bunker quality continues to pose a significant operational risk for shipowners. In our earlier review of bunker-related claims during the first five months of 2026, we highlighted a rise in off-specification bunker incidents amid increased pressure on global fuel supply chains following the escalation of the conflict in the Middle East. 

Specifically for Sulphur compliance, between January and June 2026, the number of sulphur-related cases increased by more than threefold compared with the same period in 2025. Notably, the number of cases recorded in the first six months of this year has already exceeded the total number reported during the whole of last year by approximately 40%. 

While each case is fact-specific, the increase is notable because excessive sulphur content constitutes a MARPOL compliance issue. Unlike many other bunker quality problems, sulphur non-compliance identified through port state inspections can result in vessel delays, enforcement action, and substantial costs associated with debunkering and fuel disposal. 

The map below illustrates the geographical distribution of sulphur-related claims recorded during the first six months of 2026, based on the location where the bunkers were stemmed.

Distribution of sulphur related claims

China MSA steps up sulphur compliance enforcement

According to our correspondent, Huatai, on 5 June 2026, the maritime authorities of Tianjin, Hebei, Liaoning and Shandong jointly launched a special campaign on ship pollution prevention and control in the Bohai Sea region. The campaign involves coordinated supervision by local MSA branches across the region and is expected to last nearly five months. It covers major ports and surrounding port areas in the Bohai Sea region, including Tianjin, Tangshan, Qinhuangdao, Huanghua, Jinzhou, Yingkou and Longkou. 

While the initiative is broader than bunker sulphur compliance alone, its scope includes inspections relating to air pollution prevention, SOx emissions, fuel compliance and other high-pollution-risk operations. Enforcement measures are expected to comprise onboard inspections, cross-regional enforcement activities, unannounced spot checks and remote monitoring. These efforts will be supported by a combination of UAV patrols, maritime patrol vessels, shore-based monitoring systems and rapid on-site fuel testing. 

As a result, vessels trading in the Bohai Sea region may experience increased scrutiny of fuel compliance documentation, fuel sampling records, onboard fuel management procedures, and the handling or disposal of suspected non-compliant fuel.

Documents typically requested by China MSA

Based on our recent experience, including the case discussed above, and subject to the specific requirements of the local MSA office, owners and operators may be requested to provide supporting documentation such as: 

  • Bunker documentation – Bunker Delivery Notes (BDNs), MARPOL fuel sample records, fuel test reports, and relevant fuel quality certificates. 
  • Statutory certificates – including the International Air Pollution Prevention (IAPP) Certificate and International Oil Pollution Prevention (IOPP) Certificate. 
  • Operational records – engine logbooks, deck and navigation logbooks, Oil Record Book entries, and records relating to fuel transfers, storage and consumption. 
  • Sampling documentation – the Master’s statement and any records demonstrating how fuel samples were drawn, sealed, labelled, handled and retained. 
  • Correspondence records – communications with the authorities, bunker suppliers, charterers and other relevant stakeholders. 
  • Fuel disposal records – approved disposal plans, debunkering documentation, receipts and evidence of final disposal, where applicable. 

The exact documentation required will depend on the nature of the investigation, the findings of the inspection, and the requirements of the local enforcement authority. 

Possible regulatory consequences in China

Under the Air Pollution Prevention and Control Law of the People’s Republic of China, ocean-going vessels are required to use fuel oil meeting atmospheric pollutant control requirements after berthing. Vessels operating within designated emission control areas must also comply with applicable emission standards. Article 106 provides that where vessel fuel oil fails to meet applicable standards or requirements, the competent maritime authorities may impose fines ranging from RMB 10,000 to RMB 100,000. Liability may extend to shipowners, ship operators and ship managers depending upon the circumstances of the case. 

Recommendation

Sulphur compliance should be treated as both a fuel quality and regulatory risk. Owners and operators are encouraged to take preventive steps before bunkering, act promptly if non-compliant fuel is suspected, and preserve evidence carefully if an inspection or claim arises. Under amended 

Resolution A.1206(34), Appendix 18, 2.1.5, if the BDN shows compliant fuel, but the master has independent test results of the fuel oil sample taken by the ship during the bunkering which indicates non-compliance, the master may document this by notifying the ship’s flag Administration, with copies to: 

  • the competent authority of the relevant port of destination, 
  • the Administration under whose jurisdiction the bunker deliverer is located, 
  • and to the bunker deliverer.

 

Photo credit: shraga kopstein on Unsplash / Gard
Published: 14 August, 2026

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LNG Bunkering

Shell expands LNG bunkering footprint in Spain with Valencia

As one of the region’s key maritime hubs, the company said Valencia expands the options available to shipowners seeking LNG supply along major shipping routes.

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Shell expands LNG bunkering footprint in Spain with Valencia

British oil giant Shell on Thursday (13 August) said Valencia has joined its growing network of bunkering locations, making LNG available as a marine fuel.

The successful completion of the first LNG bunkering operation in Valencia marked an important milestone for Spain and further strengthened Shell’s LNG supply capabilities across the Mediterranean. 

In a video shared by the company, bunkering vessel Alice Consulich was shown supplying an undisclosed volume of LNG to the container ship MSC Sabrina.

“As one of the region’s key maritime hubs, Valencia expands the options available to shipowners seeking LNG supply along major shipping routes,” Shell said in a social media post. 

Shell said the achievement reflected the strong collaboration across the maritime value chain, including MSC Mediterranean Shipping Company, the Port of Valencia and Fratelli Cosulich Group.

“We look forward to making more LNG bunker deliveries in Valencia and across the Mediterranean as LNG infrastructure and capabilities continue to expand,” the company said. 

 

Photo credit: Shell
Published: 14 August, 2026

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