IMO fuel use data and EU MRV: why bunker suppliers won't escape the impact
19th February 2016 18:46 GMT

Will the proposed IMO fuel use data collection scheme (formally the Data Collection System) or the EU MRV Regulation mean an additional regulatory requirement on bunker suppliers? No, not at this point in time. But come 2018, bunker suppliers will find that the requirements on ships under the EU MRV Regulation will translate to pressures on them too. Pressures they will not be able to ignore if they want to keep their customers.

Both the IMO fuel use data collection scheme and the EU MRV Regulation make the ship the responsible entity with regard to accounting for fuel. Four fuel accounting approaches are set out in EU MRV Regulation and in documents submitted to the IMO (MEPC 65/INF3 rev 1 and MEPC 68/INF3). The first approach is to use the bunker delivery note (BDN) along with periodic stock takes of fuel tanks; the second is to monitor bunker fuel tanks on-board; the third is to use flow meters for applicable combustion processes; and finally the fourth is to use direct emission measurements with or without direct stack measurement of exhaust gas flow.

From this list only the first approach looks to be of concern to bunker suppliers. However a ship’s fuel accounting system, based on any of the other approaches, needs to consider how to account for fuel if equipment, systems or other malfunctions occur and the most likely ‘fall back’ tactic is going to be the use of BDN quantity data, as well as BDN density data if their fuel accounting system is -- as in many parts of the industry --  based on measuring quantity in m3 and then convert this to metric tonnes based on density.

A ship’s compliance with the proposed IMO fuel use data collection scheme or the EU MRV Regulation, at the minimum, is likely to mean that ships will wish to contract for fuel supplies with a bunker supplier who can provide assurance that their bunker supply meters are calibrated, to what standards, by who, how frequently; as well as being maintained and tamper proof. Ships may additionally prefer bunker suppliers who can provide a record (electronic/photographic) of the bunker quantities as additional evidence over and above that data recorded on the BDN and suppliers with the capacity for quick support with back up data should a BDN/oil record book/financial invoice have different fuel quantities.

And herein lies the reason why I believe commercial bunker delivery contract may see an evolution.

The discussion at IMO on a fuel use data collection scheme has not suggested amending MARPOL Annex VI Regulation 18 with regard to responsibilities on fuel oil suppliers.  MARPOL Annex VI does not require bunker suppliers to have metering instruments meeting specific accuracy requirements, nor the calibration/maintenance of such instruments. Currently, therefore, bunker suppliers will not have a new regulatory responsibility for providing specific accuracy or uncertainty for the BDN quantity and density data under either the emerging fuel use data collection at IMO or the actual EU MRV Regulation.

This lack of regulatory requirements does not, however, mean that bunker suppliers may not find themselves accountable under commercial contracts for such matters.

At present, the emerging fuel use data collection scheme  at IMO does not include a specific proposal for uncertainty of the fuel accounting system, or even a discussion on uncertainty or accuracy. The EU MRV Regulation includes requirement on ‘uncertainty’ and includes, in Annex I, that ‘The uncertainty associated with the BDN shall be specified in the monitoring plan.’ The monitoring plan is the responsibility of the ‘ship’.  Assuming that the bunker delivery meter, which is controlled by the bunker supplier, will be included within the ship’s fuel accounting system boundaries, how can responsibility for the accuracy/calibration/maintenance of the bunker supplier delivery meter be ‘enforced’ on bunker suppliers, since they are not the regulated entity? The most likely answer is for this ‘enforcement’ to be part of commercial fuel supply negotiations and agreements.

Hence commercial contracts may eventually be amended to require bunker suppliers to provide certain additional information to the ship, such as type of meter, serial number, accuracy of meter, operational range of meter, calibration status, calibration certificate to a recognised standard, and to assure the ship that the BDN reported quantity and density data meet certain uncertainty/accuracy criteria.

This change will not be simple or quick if land-based MRV systems provide any evidence. But it will happen. To what degree it will happen, how fast and what data will be required will also depend on what fuel accounting system ships chose to use. But given the most likely fuel accounting approach for the majority of ship owners will be the BDN, it may well happen quickly.

So while bunker suppliers may not be subjected to additional regulatory requirements as a result of the proposed IMO fuel use data collection scheme or the EU MRV Regulation, they will face commercial pressures to assist their customers in meeting their obligations.

Anne-Marie Warris,
19th February 2016 18:46 GMT

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