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MPA steps up measures to align marine fuel industry with new rules

Singapore

SINGAPORE has stepped up efforts to align its marine fuel industry with an upcoming regulation aimed at cutting ship emissions.

The Maritime and Port Authority of Singapore's (MPA) assistant CEO for operations M Segar said at an industry dinner on Thursday that the regulatory body will impose the use of mass flow meters (MFMs) for delivering cleaner-burning distillates bunker to international ships from July 2019.

To help marine fuel suppliers ready their fleet for the MFM mandate on distillate bunker delivery, MPA has set aside S$9 million to co-fund the costs of MFM adoption, Capt Segar said at the IBIA Asia Gala Dinner 2018.

The MFM mandate for distillates bunker will kick in about six months ahead of the International Maritime Organization's (IMO) global sulphur cap.

In October 2016, the IMO reached a decision to proceed with its plan to enforce a 0.5 per cent cap on sulphur content in marine fuels in 2020. The intent of this global sulphur cap is to cut the emissions of sulphur dioxide, a greenhouse gas that is harmful to human health. Switching from marine fuel oils (MFOs), the current de facto marine fuel choice, to distillates bunker is one option for shipowners to comply with the IMO 2020 global sulphur cap.

Capt Segar's announcement on Thursday also signals the extension of MPA's MFM mandate to the delivery of distillate bunkers after it was enforced on delivery of MFOs in January 2017.

Singapore Shipping Association's executive director Michael Phoon said that the shipping community here welcomes MPA's move, which he viewed as an expansion of the "bunker offerings" here.

Shipowners have already benefitted from faster turnaround times for refuelling their vessels with MFO since the MFM mandate was introduced. The use of MFMs, or essentially metered pipes, reduces human intervention in measuring marine fuel being transferred between buyers and sellers. It has helped reduce disputes between sellers and buyers, and has bolstered the efficiency of MFO bunkering operations at the Port of Singapore.

Capt Segar also said that MPA has set aside S$9 million as co-funding to help defray the costs that bunker suppliers would incur in adopting MFM systems for supplying distillates bunker. "All existing bunker tankers that are registered with MPA as being used for distillates delivery as at today would be eligible for a co-funding incentive of S$60,000 per vessel."

In 2017, MPA invested almost S$17 million to help the industry implement the mandatory use of MPA-approved MFMs for the delivery of MFOs. There are 135 bunker tankers carrying MFO that are fitted with MPA-approved MFMs as at April 1. MPA had extended a grant of S$80,000 for each bunker vessel fitted with MFMs for MFO delivery.

The MFM grant extended for MFO tankers is higher than that announced for distillate bunker tankers. The difference is partly due to the MFM requirement for each fuel type, one observer said.

Regional manager of International Bunker Industry Association Simon Neo noted that current MFO bunker tankers are generally bigger than those being used to supply distillates bunker. By his estimate, the MFM system for a distillates bunker tanker of 1,000 dwt would cost about S$90,000 when compared to S$150,000 for an MFM system used in the average MFO bunker tanker, he said.

Singapore bunker sales hit a new record high of 50.6 million tonnes in 2017, defusing earlier uncertainty over how the MFM mandate may impact bunkering volumes here.