The Coast Guard and IMO 2020: Enforcing the new sulfur cap

On Jan. 13, the U.S. Coast Guard issued a work instruction pertaining to compliance and enforcement of the International Maritime Organization’s 2020 sulfur cap in U.S. waters. As it states in the preamble, the work instruction is not a rule, it does not substitute or supersede applicable laws or regulations, and it does not impose legally binding requirements. Instead, it “represents the Coast Guard’s current thinking on this topic and may assist industry, mariners, the public and the Coast Guard, as well as other federal and state regulators, in applying statutory and regulatory requirements.”

Effect of changes in U.S.
IMO Resolution MEPC.305(73) amended MARPOL Annex VI Regulation 14 to prohibit ships operating outside existing Emission Control Areas (ECAs) from using or carrying on board any fuel oil that exceeds 0.5 percent sulfur content after Jan. 1, 2020. A complementary amendment prohibiting the carriage of noncompliant fuel oil after March 1, 2020, was adopted in October 2018.

These amendments will not have a significant substantive effect on vessels operating in U.S. waters, since the majority of the United States is encompassed by either the North American ECA or the U.S. Caribbean Sea ECA. Since Jan. 1, 2015, the fuel oil sulfur cap in both ECAs has been 0.1 percent, and this standard will remain in effect for all U.S. ports within the areas. The only substantive effect will be in non-ECA ports, in which vessel operators will have to use fuel oil that does not exceed 0.5 percent sulfur content.

The main effect in the U.S. of the IMO amendments (referred to as Regulation 14 changes) will be in the Coast Guard’s enforcement posture. Enforcement officials in ports within ECAs will continue verifying compliance with the 0.1 percent standard. Officials in non-ECA ports will begin verifying compliance with the new 0.5 percent limit. And since the U.S. is a party to Annex VI, U.S. compliance officials will also verify foreign vessels’ compliance with the Regulation 14 changes when operating beyond U.S. waters. How compliance is achieved, and how the Coast Guard will conduct compliance inspections, is the subject of the work instruction.

Coast Guard objectives
The Coast Guard will use the ECA Job Aid (Enclosure 1 to the work instruction) when performing the portions of domestic inspections and port state control examinations related to Annex VI. The ECA Job Aid outlines the items the marine inspectors (MI) and port state control officers (PSCO) may review or examine. The depth and scope of the examination will be determined by MIs and PSCOs based on the condition of the vessel, compliance with the ECA through the use of low-sulfur fuel oil (or other methods), the operation of systems used for compliance, and the competency of the vessel’s crew. The Coast Guard may take fuel samples from service and bunker tanks to verify compliance.

• Enforcing ECA requirements — In the two ECAs encompassing the U.S., the Coast Guard will continue to enforce ECA requirements by reviewing bunker delivery notes (BDNs), checking vessel logs for information regarding where the vessel changed over to ECA-compliant fuel, and confirming the vessel has written changeover procedures.

• Enforcing sulfur limits in non-ECA U.S. ports — Coast Guard units outside either U.S. ECA (e.g. Sector Guam) will follow the same procedures as those in ECAs to ensure all vessels calling there are complying with the 0.5 percent sulfur limit.

• Enforcing compliance with Annex VI outside U.S. waters — As mentioned before, since the United States is a party to Annex VI and is bound to enforce it, the Coast Guard will review vessel documents to determine whether the vessel is complying with the applicable fuel sulfur limit when operating beyond U.S. waters. According to the work instruction, compliance with Annex VI can be achieved by using low-sulfur fuel oil, by receiving equivalence or by receiving a temporary exemption.

For vessels using low-sulfur fuel oil, MIs and PSCOs will review bunker delivery notes and check logs to determine compliance with the applicable fuel sulfur limit when operating beyond U.S. waters.

For vessels opting for equivalency, a flag administration may approve the use of any fitting, material, appliance or apparatus, alternative fuel oils, or other procedures or compliance method, provided it is at least as effective in terms of emission reductions. Foreign-flagged ships that receive an Annex VI equivalency must ensure the flag state submits the equivalency to the IMO’s Global Integrated Shipping Information System (GISIS) prior to the ship entering either U.S. ECA. The Coast Guard may review any submissions it receives but will use the GISIS database to confirm the validity of an Annex VI equivalency.

The most common “equivalent” is an exhaust gas cleaning system (EGCS), commonly referred to as a scrubber, used in lieu of low-sulfur fuel oil. Coast Guard MIs and PSCOs will verify that vessels relying on this compliance method have appropriate documentation, and they will conduct spot checks to verify that the equipment is providing effective equivalence to Regulation 14 requirements.

For compliance through exemption or exception, Annex VI permits the administration of a party, in cooperation with other administrations as appropriate, to issue an exemption from specific provisions for a ship to conduct trials for the development of emission reduction and control technologies and engine design programs. Such vessels will be issued documentation by their administration reflecting the vessel’s status. Coast Guard MIs and PSCOs will examine such documentation during the course of their vessel examination.

Dealing with noncompliance
• Noncompliant fuel oil — An MI or PSCO encountering a ship using fuel oil with sulfur content exceeding the allowable limit (0.1 percent while operating in either ECA under U.S. jurisdiction, 0.5 percent elsewhere) will determine why the vessel is not in compliance and whether a valid claim of compliant fuel non-availability exists. Officers in charge of marine inspections (OCMIs) may apply contingency measures that range from allowing the fuel oil to be retained on board until it can be discharged ashore at a later date, to requiring the vessel to offload the fuel at the current port.

When assessing the validity of a non-availability claim, the MI or PSCO will consider the following factors: Determine whether the ship submitted a fuel oil non-availability report (FONAR); verify if notification was also provided to the flag administration; review records of actions taken to attempt to achieve compliance and any evidence that the ship attempted to purchase compliant fuel in accordance with the voyage plan; obtain a copy of the BDNs for the fuel in use while operating in U.S. waters; determine if the ship is scheduled to receive compliant fuel during the port call (or has already received bunkers); and refer to the ECA Job Aid for deficiency examples and recommended actions.

• Noncompliance due to a marine casualty or equipment failure — Annex VI allows for noncompliant emissions resulting from damage to a ship or its equipment. When equipment approved by an administration under Regulation 4 (equivalency — e.g., scrubber) experiences a failure, the Coast Guard expects a certain degree of redundancy so that the ship may continue to operate in compliance with Regulation 14 (available spare parts on board, or alternative arrangements such as low-sulfur fuel oil tanks).

The Coast Guard will take into consideration a ship that has reported an accident or a defect in accordance with Annex VI, whose flag administration (or its representative) has issued an interim compliance scheme, and an outstanding condition due to equipment casualty or failure. Additionally, it is highly recommended that companies leverage their safety management system (SMS) to address Annex VI compliance robustly enough to empower shipboard crews to adequately respond to issues through contingency plans.

Coast Guard sanctions
The Coast Guard may utilize a range of sanctions in response to the discovery of Annex VI violations. These include the following, in increasing order of severity:

• Correction of deficiencies and detention order — The Coast Guard may require immediate correction of a deficiency, or correction of the problem within a specified time frame, allowing the vessel to continue to operate in the interim. In addition, the Coast Guard may issue a detention order, allowing the ship to proceed only when the Coast Guard determines that the ship can do so without presenting an unreasonable threat to the marine environment or the public health and welfare.

• Enforcement action — Whether or not the Coast Guard issues a detention order, enforcement action can be pursued for any violation of MARPOL Annex VI. In selecting the appropriate action, Coast Guard personnel will consider such factors as the nature and seriousness of the offense, and the deterrent effect on the individuals involved. Enforcement actions include a letter of warning; a fine or civil penalty up to $25,000 (with each day of a continuing violation constituting a separate violation); withholding departure clearance and requiring surety bonds; and referral for criminal prosecution.

Bottom line for operators
The fuel oil sulfur requirements in most U.S. ports (those in ECAs) did not change as a result of the 2020 Regulation 14 amendments. Thus, other than in non-ECA ports, in which 0.5 percent sulfur fuel must now be used, there should be no change to operational practices for operators utilizing U.S. ports.

As with MARPOL Annex I and ballast water requirements, the best advice that can be given to operators is to carefully study and comply with the new rules.

If compliance is not possible, operators of vessels destined for U.S. ports should take all reasonable measures to correct a deficiency, and ensure that timely notification of the deficiency and efforts to rectify it have been relayed to the flag administration and the Coast Guard. There is little that makes the Coast Guard unhappier than failure of notification. Somewhat unhelpfully, the work instruction states that “there is no specific format for notification.” The lack of a standard process, however, does not relieve vessel owners and operators from ensuring that appropriate notice is given. Use of a FONAR for noncompliant fuel or a notice of arrival is always a good start.

The one thing that makes the Coast Guard unhappier than non-notification is falsehood. Lies, cover-ups, forged records and associated activities have led to criminal prosecutions of individuals and companies for Annex I violations, and they have the potential to do the same in the Annex VI realm.

The ECA Job Aid (Enclosure 1) includes a deficiency matrix on pages 14-22 that is a very useful insight into the Coast Guard Annex VI enforcement process. Shipping company environmental compliance managers should carefully review that matrix and keep it handy for proactive training purposes, and if necessary to aid in responding to any incident that occurs in a U.S. port.

Proactivity is always rewarded, both by preventing incidents from occurring and by demonstrating corporate responsibility and commitment to safety and environmental protection if an incident does occur. Numerous providers can conduct single vessel or fleetwide compliance audits. Such audits best position vessel owners and operators to navigate the dangerous shoal waters posed by Annex VI and myriad other rules in this highly regulated industry.

Andrew Norris, a retired Coast Guard captain, is a maritime legal and regulatory consultant and president of Tradewind Maritime Services Inc. He can be reached by email at or by phone at (401) 871-7482.

By Professional Mariner Staff