Hong Kong: Proposed new rules on fuel sulphur content


Published: 20 January 2014

The Association would like to advise members, who have no doubt seen the numerous industry news articles, that new rules are proposed for Hong Kong with respect to the sulphur content of fuel oil.

There are at present two regulations which we would like to highlight.

As of 1 April 2014, new rules come in to effect which will mandate the supply of 0.05% sulphur marine light diesel in Hong Kong. The rules do not mandate ocean going vessels to use that fuel while in Hong Kong, but if a supply of marine light diesel is ordered then it will be to that standard.

Furthermore, at present there is additional legislation tabled by the Hong Kong Government this year and if adopted, it will come in to force by 1 January 2015.

Should this further new legislation be adopted then it would make Hong Kong the first Asian port to mandate the use of low sulphur content fuel oil at no more than 0.5% for ocean going vessels, when at birth or at anchor, and be in line with the practice adopted in US and European ports.

Hong Kong is already operating a voluntary scheme since 2011, which came with an incentive scheme.

The legislative changes appear to have significant local shipping industry support, with OOCL being already a member of the voluntary scheme as well as Wah Kwong among other notable supporters.

The new thresh hold will be set at 0.5% sulphur content, to account for the local availability of such fuel supplies. There would be significant penalities, including possible custodial sentences, for a breach of the new rules once enacted.

Members trading to / from Hong Kong should carefully monitor further developments, to ensure readiness for the enforcement of any new standards, and the Association will advise again once the new legislation is finalised.

The Association would in the meantime advise members that it is a continuing trend to see greater emphasis placed on clean air in major ports and trading countries, and that there will be continuing developments towards reducing sulphur content in marine fuels. Both by way of international convention such as MARPOL, as well as national legislation, ship-owners will face a period of increased regulation concerning the fuels used on board their vessels.

Given the challenges of ensuring sufficient supplies of compliant fuel, managing fuel on board, managing the trading between areas with different regulations, it is likely that the issue of bunker fuel and bunker fuel management will continue to be a key concern for vessel operations. Advance planning and investment by Members to meet these challenges is likely to prove very important to continued successful trading going forward.

The Association is grateful to Lloyd's List and Bunkerspot for their input in respect of this update. The Association also referred to the BIMCO and Hong Kong Government updates in respect of this matter.

The Association would also like to express its thanks to Arthur Bowring of the Hong Kong Shipowners Association for clarifying the legislative position.