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Lloyds List: Industry is bunkered as new rules cause confusion

Industry is bunkered as new rules cause confusion
That is the message to come out of the recent Aracon bunkering conference in Antwerp, writes Helen Hill
Lloyds List; Apr 20, 2006

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Attending the recent Aracon bunkering conference in Antwerp, vague memories of a certain Spice Girls song came to mind 'I'll tell you what I want, what I really, really want.'

If there was a reply from the bunkering industry answers and solutions would undoubtedly be the loud cry.

The industry has been bombarded with the latest rules and regulations and it is doing its best to facilitate them. But it is clear that those in the industry are unsure where to start.

Concerning low sulphur fuel: where will it be available? How expensive will it be? Will there be guarantees that it will be fit for purpose? Is the available scrubber technology really suitable?

Many countries have not even published their regulations yet and, as several conference attendees pointed out, existing European regulations are often ignored anyway.

Even if correct emission measurements can be obtained, how will the system be policed? And is it really the case that there will be dozens of arrests? These were just a few of the increasingly pressing questions being asked.

Regular bunkering is also causing concern. The guessing game surrounding the price to bunker suppliers needing to be paid in a reasonable period of time was among the issues raised at Aracon.

Captain Carmen Dewilde, the operations and QHSE manager of Anglo-Eastern Group, presented some of the views of a shipowner.

Capt Dewilde made the point that in one exhaust several polluters can be present. These pollutants are all interrelated, so a holistic approach was needed.

Operationally, there were predicaments aplenty. A fundamental one concerned the availability of low sulphur fuels. How was sample analysis going to be carried out? And, even taking into account the international regulations, there were also various regional initiatives to factor into the equation.

Using low sulphur fuel did reduce SOx emissions but it was certainly more costly, Capt Dewilde said. In some cases, she added, there was an increased risk of engine problems as some engines needed sulphur for lubrication.

For the industry generally there were high investment costs and for the owners there were increased fuel costs.

When it came to exhaust gas scrubbers, Capt Dewilde said that considering the current equipment Anglo-Eastern found that the systems were 'large, expensive and difficult to install'.

She added that there simply was not enough space in an already cramped engine room.

The company was awaiting the development of more cost-efficient equipment.

Capt Dewilde believed that there are also many unanswered questions about shore-side electricity, such as a lack of common standardisation. And commenting on fuel cells, she added, this was perhaps an interesting initiative for the future.

But, for the moment, scrubbing technology was not 'a well-tested alternative', she said. 'Blending is not an easy option and the whole thing is very difficult to monitor,' Capt Dewilde added.

In addition, she asked if there was a huge demand for low sulphur fuel, and will there be a sufficient supply?

It is also important to look at the quality and not just the price of the fuel, she stressed.

She added: 'Existing legislation should be implemented as soon as possible and there should be no new legislation until the existing regulations are properly implemented and we can see their effects.'

European Union regulation was being ignored to date, she said.

Owners also required a long-term framework and fuel quality standards need to be developed, she added. Of course, the company believes that everyone should comply.

Capt Dewilde ended her presentation with a picture of huge plumes of smoke coming out of chimneys ashore 'everyone should comply', she told a highly amused audience.

Hari Dattatreya, commercial director of Royal Vopak, gave the terminal and storage operator's viewpoint. All of the EU regulations and Sulphur Oxide Emission Control (SECA) zones certainly meant that blending was becoming increasingly complex. Terminals had to rise to the challenge and really segregate products properly, he added.

Bunkering was also becoming more concentrated on hubs. There is a need for additional capacity and this infrastructure also meant there were certain economies of scale that had to be met for the refineries, he added.

Robin Meech, managing director of independent consultant Marine ' Energy Consulting, took on the momentous task of outlining the various regulations.

'Doing nothing is not an option,' he warned the audience. The regulations 'are upon us' and, certainly, more stringent regulations are on their way.

More stringent legislation will mean more costs and complexity and owners will be expected to meet the additional costs, he summed up.

But there was at least some positive news. Shell Marine Products took the conference as a chance to announce that it will be starting to produce low sulphur fuel mid-year (probably June) at its Rotterdam Pernis facility.

James Humfrey, Shell Marine Products regional fuels manager EMEA, could not say how much low sulphur fuel would be produced but told Lloyd's List that Shell would also start producing in the UK as well but it had not been decided when as yet.

Shell already produces low sulphur fuel in Germany, Sweden and Norway.

Mr Humfrey told delegates that the refiners were seeking solutions and they would be able to meet demand.

The shipping industry should have confidence in the refiners 'We are committed to the marine and bunker industry and will find solutions,' he said.

Although Mr Humfrey did his best to convince the delegates that solutions will be out there, it looked like the industry may need a little more convincing.

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