Reducing sulphur emissions from shipping

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New regulations to ensure that the same regulatory requirements for sulphur emissions and anti-fouling systems will continue to apply to UK registered ships after Brexit were made last week. The Merchant Shipping and Other Transport (Environmental Protection) (Amendment) (EU Exit) Regulations 2019 (the Regulations) also enable UK regulators to enforce these standards against non-UK vessels in UK waters after Brexit and ensure that the Environmental Impact Assessment regime for transport and works can continue to function. These provisions will come into force on exit day.

More than a decade ago the International Maritime Organisation (IMO) reached a major global agreement to reduce maximum sulphur content of marine fuels to 0.5% by 2020. A lower limit of 0.1% by 2015 applies for more sensitive Sulphur Emission Control Areas, such as the North Sea, English Channel and Baltic Sea. The limits on sulphur content in fuels aim to reduce emissions of sulphur dioxide which causes acidification and acid rain. Towards the end of 2016 the IMO confirmed that the current global sulphur cap of 3.5% would be substantially reduced to 0.5% from 1 January 2020.

Maximum permitted levels of sulphur content in marine gas oil and marine diesel oil used in the EU are set by Directive 2016/802 relating to a reduction in the sulphur content of certain liquid fuels. In the UK, the Merchant Shipping (Prevention of Air Pollution on Ships) Regulations 2008 include limits on sulphur content of marine fuel oil and the Merchant Shipping (Prevention of Air Pollution from Ships) and Motor Fuel (Composition and Content) (Amendment) Regulations 2014 reduce the permitted sulphur content of fuel for ships from 1 January 2015.

The ambitious targets confirm that the shipping industry is going through a period of substantial change. Even with a number of routes to compliance (direct purchase of compliant marine fuel, installation of exhaust gas cleaning (or "scrubber") systems, use of LNG or methanol) the changes are costly to an industry which is already grappling with both the practical and the financial effects of Brexit. The question as to whether refiners and the shipping industry alike are prepared for the imminent switch or change in demand is a real one. The UK's passing of the Regulations confirms its desire to keep apace with not only Europe but the rest of the globe on this subject.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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