Port enforcement agencies in the U.S. and around the world tightened their oversight of the IMO 2020 low-sulfur fuel regulation on March 1 to include detaining and penalizing ships found to be carrying noncompliant fuel.
The IMO 2020 regulation, which went into effect Jan. 1, lowered the maximum amount of sulfur in fuel allowed to be burned by a ship from 3.5% to 0.5%. Starting March 1, ships found merely storing — not just burning — high-sulfur, noncompliant fuel will be in violation of the regulation. Ships outfitted with a scrubber system that can clean higher sulfur fuel exhaust gas after it's burned in the engine are exempt.
"Since the introduction of IMO 2020 on 1st January, ships have been given a ‘grace period' while the industry transitions to low-sulfur fuel," Guy Platten, secretary general of the London-based International Chamber of Shipping (ICS), said in a statement Monday. "As of 1st March this will no longer be the case. Any ship found in non-compliance faces the prospect of serious fines and even detention."
Platten noted that the ICS "has been made aware that major port State inspection regimes including the United States Coast Guard and the Australian Maritime Safety Authority (AMSA) have made it clear, in no uncertain terms, that detention of ships found to be non-compliant is both possible and legally permissible."
In addition to supply chain costs incurred by delays associated with an unanticipated vessel detention, the Coast Guard has confirmed that vessel owners may first receive a warning letter for violating the IMO 2020 regulation. The Coast Guard could also issue an owner a "Notice of Violation," which could include penalties of $2,000 to $10,000. In addition, owners could potentially be liable for civil penalties assessed by the U.S. Environmental Protection Agency of over $75,000 per violation per day.
Platten emphasized that ICS information shows shipowners as fully compliant and ready for the new enforcement regime. "We are simply reminding shipowners and operators that these new rules will come into force."
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 Coast Guard emphasized in updated guidance issued in January that since the U.S. is bound to enforce the regulation, it "will review [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."
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