US updates IMO 2020 enforcement policy

The United States is sharpening its focus on enforcement of the IMO 2020 fuel sulfur emissions cap, which could result in harsh penalties for vessel operators caught attempting to sidestep the regulation.

In new guidance issued by the U.S. Coast Guard (USCG), vessels calling on U.S. ports will be expected to carry documents showing they are burning fuel with a sulfur content of no more than 0.5% while in international waters, a regulation that went into force on Jan. 1. In addition to burning lower-sulfur fuel, ships can comply by filtering emissions using a “scrubber” in the ship’s smokestack or by using an alternative fuel such as liquefied natural gas.

Regulations tighten further on March 1, when a high-sulfur fuel carriage ban goes into effect and ships will no longer be able to carry noncompliant fuel in their bunker tanks.

Vessel industry representatives have been skeptical about the ability of regulators in the U.S. and around the world to keep unscrupulous shipowners from cheating by burning cheaper, noncompliant fuel — thereby gaining a significant cost advantage over those that comply.

The USCG emphasized in its updated guidance, however, that since the U.S. is bound to enforce the regulation, it “will review BDNs [bunker delivery notes] and check logs to determine whether the vessel is complying with the applicable fuel sulfur limit when operating beyond U.S. waters.”

The agency also warned of potential shortages of heavy fuel oil with a maximum sulfur content of 0.50%. “As such, the 2020 sulfur caps may result in an unfamiliar grade of fuel that may consist of a mixture of heavy fuel oil and distillate fuel oil,” it stated in the guidance. “Further, there is currently no accepted technical specification for such a fuel oil. This has raised concerns in the shipping industry that fuel quality and availability will vary considerably and, as a result, ships may have problems obtaining and/or burning certain fuel oil.”

Those that choose to cheat — at least if caught in the U.S. — will be subject to “serious consequences,” according to George Chalos, an attorney who specializes in maritime environmental compliance. In a recent editorial in The Arrest News, a maritime enforcement publication, Chalos noted that approximately 80 deficiencies and “over a dozen” enforcement actions have taken place in the U.S. for violations of international air pollution regulations, known as MARPOL Annex VI, by vessel owners.

Last year marked the first criminal prosecution of a MARPOL Annex VI violation pursued by the USCG and the U.S. Department of Justice (DOJ) in which two Greek vessel operators were each fined $1.5 million, and senior crew members were sentenced to three years’ probation, during which they were not allowed to return to the United States on a ship.

“The failure to have compliant fuel on board of a vessel will be viewed as a failure of preparedness, not a failure of accessibility of resources,” Chalos cautioned. “In addition, the DOJ perceives that there are vessels breaking the rules each day and strongly believes in its mission to seek out noncompliance and prosecute alleged criminal activity accordingly.”

To show inspectors that they are complying with IMO 2020, Chalos advised that shipowners and operators keep critical documentation on their vessels, including:

  • Bunker delivery notes, to be retained onboard for a minimum of three years
  • Bunker transfer procedures, as well as preloading plan and declaration of inspection retained for at least thirty days
  • Declaration that fuel conforms to MARPOL Annex VI and does not exceed maximum sulfur content
  • Fuel changeover plan Oil Record Books (with accurate and timely information properly recorded)
  • Fuel oil non-availability reports (FONAR).