1. Leading the way; making a difference BUNKER QUALITY LATIN AMERICAN PANEL Buenos Aires 5th November 2014 Dragos Rauta INTERTANKO

2. Leading the way; making a difference Reg. 18, MARPOL Annex VI - Fuel Oil Availability and Quality Fuel oil... shall meet the following requirements: shall be blends of hydrocarbons derived from petroleum refining shall be free from inorganic acid shall not include any added substance or chemical waste which: - - jeopardizes the safety of ships or adversely affects the performance of the machinery, or - - is harmful to personnel, or - - contributes overall to additional air pollution Bunker Quality

3. Leading the way; making a difference In many cases fuels delivered do not meet the specification requirements, including S content Blending to LSFO < 1.0% results in lower quality, e.g.: - -Increased average density (higher price for same volume) - -Increased average cat-fines (Al+Si) level - -Increase in sludging problems - -Reduced ignition and combustion quality - -Increased problems with chemical contamination of fuel Bunker Quality

4. Leading the way; making a difference In practice, there is no quality control of bunkers delivered to ships except for the testing arranged by ship operators Bunker Alerts issued by test laboratories every week Bunker Quality

5. Leading the way; making a difference Norway and INTERTANKO collected data from two fuel testing laboratories which together had more that 50% of all bunker deliveries worldwide Out of over 100,000 bunker samples, the receiving vessels have reported that on 1,468 occasions they have had machinery problems as a result of using the fuels as supplied. These were events resulting in machinery damage and black out events Bunker Quality

6. Leading the way; making a difference The requirements are placed upon the ship to ensure that the fuel used on board the ship complies with these standards (Regulations 14 and 18 of MARPOL Annex VI) If the ship is found to be using fuel oil that is not in compliance with these standards, it is the ship and the ship operator that suffers the consequences of port state control action and penalties under national laws There are effectively no requirements on the fuel supplier to ensure they provide the ship with fuel that meets the Annex VI requirements Bunker Quality

7. Leading the way; making a difference INTERTANKO and others submitting paper to MEPC 67 proposing that Parties to Annex VI: require that local bunker suppliers have procedures to confirm that fuel supplied to vessels is in compliance with IMO requirements; make registries of locally recognised bunker suppliers available to IMO; and audit/inspect the local suppliers and report the investigation results and follow-up actions in response to any Note of Protest from ships that received non-compliant fuel Bunker Quality

8. Leading the way; making a difference Other Papers Submitted to MEPC 67: MEPC 67/4/10 (IAPH) – Supportive of further measures to enhance fuel quality but reluctant to mandating quality controls prior to delivery MEPC 67/4/14 (IBIA) – Largely supportive of new measures but not supportive to audit and inspections on the supply side. Proposing to include ISO 8217 in the BDN and to mandate licensing of suppliers through IMO regulations. MEPC 67/4/24 (US) – Opposed any mandatory requirements, but support the development of non-mandatory guidelines. Bunker Quality

9. Leading the way; making a difference MEPC 67 Correspondence Group terms of reference: develop draft guidance for assuring the quality of fuel oil delivered for use on board ships consider the adequacy of the current legal framework in MARPOL Annex VI for assuring the quality of fuel oil for use on board ships, taking into account the outcome of MSC 94, when available INTERTANKO will participate IMO and Bunker Quality

10. Leading the way; making a difference Singapore – –Revision of SS 600 – –Mass Flow Meters (by Jan 2017) Rotterdam – –List of “Undesirable Substances” ISO 8217/non-ISO (clause 5 – contaminants not derived from petrochemical refining) Possible control through sampling at terminal transfer (to barge) Aiming for end 2014 Sulphur level not included in checks Bunkers – Local Developments

11. Leading the way; making a difference Confidential Dispute Reporting

12. Leading the way; making a difference fuel designed for engines? or engines designed for fuel? or fuel designed for regulations?

13. Leading the way; making a difference muchas gracias dragos.rauta@intertanko.com