An awful thought
12th May 2014 09:51 GMT

Bunker conferences are proliferating and enthusiasm to attend shows no signs of waning. Perhaps it is a sign of how rapidly the industry is changing. Discussions about the availability of low sulphur fuel take on a special urgency when reforms to Emission Control Areas (ECA) are barely six months distant.

But it is items that are not on the agenda that sometimes illuminate problematic corners of the market. A question-and-answer session at a recent conference briefly touched on claims that some Singapore bunker suppliers charge more if customers want bunkering operations overseen by inspection companies with a reputation for standards and integrity - a policy that appears to put a surcharge on transparency. "What does that say about our industry?" asked one speaker from an oil major. The question was left hanging in the air.

Another issue was 'off spec' product. Fuel testing agencies routinely warn of high numbers of 'off spec' samples. Assertions  about a deterioration in fuel quality regularly go unchallenged. But one supplier raised his voice to say the statistics were misleading and were leaving a damaging impression of the industry.

A quick show of hands among conference delegates showed that of the suppliers in the room, none had faced quality claims in the last 12 months. According to one buyer,  he routinely accepted 'off spec' fuel because a challenge would waste everybody's time. The implication was  that much 'off-spec' fuel was fit for purpose.

A speaker from a testing agency then referred to 'good 'off-spec' and 'bad off-spec', although sources  told Bulletin it would have been better to have used different words, perhaps 'negligible or marginal' instead of 'good off spec' and 'significant or critical' instead of 'bad '.

But one issue that the could have troubling resonance beyond the industry was at the top of the formal agenda of at least one of this year's conferences.

The issue was compliance. How far will the shipping industry go towards meeting the new sulphur cap that comes into force in ECA waters from the start of next year?

There are suggestions that enforcement policies will be so weak, and the fines for non-compliance so small, that some shipping companies will simply flout the regulation. Breaking the rules by burning non-compliant high sulphur fuel will save so much money that the risks of detection will be seen as well worth running. 'Doing the right thing'  will be judged to come at too high a price.

One experienced industry observer suggested that as many as half of ship owners could chose not to follow the rules.

He warned an industry conference there was the potential for "a breakdown of the regulatory process". Simply put, some operators might decide that their cheapest ECA policy would be not to comply. "That is an awful thought," he said.

Such a steely-eyed approach would undermine the shipping industry's claim to be environmentally responsible. Its boast to be the 'cleanest' form of transport, while still true, would be exposed, not as a matter of policy, but rather lucky chance.


Nick Jameson,
12th May 2014 09:51 GMT

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