keeps you connected across the coal world

Submit Your Articles
We welcome article submissions from experts in the areas of coal, mining, shipping, etc.

To Submit your article please click here.

International Energy Events

WTI Crude Oil

BRENT Crude Oil

Search News
Latest CoalNews Headlines
Wednesday, 29 August 18

The challenges introduced by the global sulphur cap are not exclusively technical. The new limits are likely to impact contracts and charterparties. Forward planning now could help to avoid painful disputes in the future.
Time charterparties will require particularly close attention, with more challenges anticipated for vessels already in long-term charterparties that span the enforcement date of 1 January 2020. Unfortunately, there is no single “magic” charterparty clause to deal with all of the issues that might arise. All bunker clauses will almost certainly need to be reviewed but other clauses might also need to be considered, depending upon the chosen method of compliance. Below, we look at some of the issues that we anticipate will more commonly arise.
Carriage of non-compliant fuel
It is likely that a prohibition on the carriage of non-compliant fuels will come into force on 1 March 2020 for vessels not fitted with Exhaust Gas Cleaning Systems (“EGCS” or “scrubbers”). Non-compliant fuels will have to be removed to avoid fines or the vessel being detained. Assuming such fuel is not consumed before 01.01.2020, who is obliged to arrange or pay for the removal of such fuel will depend upon the wording of the charterparty, so it will be important for this to be considered at the drafting stage. There may be significant logistical difficulties in removing non-compliant fuel and it is likely that the re-sale value will be less than the original purchase price. Issues might also arise over who owns the non-compliant fuel and who therefore has the right to remove it.
Definition of ‘high sulphur’ and low sulphur’
At the moment, vessels burn either ‘low sulphur’ (0.1%S max) fuel in ECAs or ‘high sulphur’ (3.5%S max) fuel outside ECAs. In 2020, there will be three sulphur types (<0.1%S, <0.5%S and >0.5%S). This raises the question: what will ‘low sulphur’ mean in 2020? Will it be <0.1% or <0.5%? It is therefore advisable to move away from the use of terms such as ‘high’ and ‘low’ sulphur but instead to specify the exact sulphur limit of fuel e.g. <0.5% sulphur content; <0.1% sulphur content etc.
Bunkers on redelivery (“BOR”)
When a vessel is redelivered by a time charterer, the charterparty usually requires that the vessel is redelivered with approximately the same quantities of ‘high sulphur’ and ‘low sulphur’ fuel as on board at delivery. The owner will usually be required to buy this fuel back at a certain price (often the same price as at delivery). ‘High sulphur’ fuel bought from the charterer at redelivery will have little value to the owner unless the vessel is fitted with scrubbers. BOR requirements in the charterparty might mean that the charterer can redeliver the vessel with insufficient compliant fuel on board to reach a bunker port. Therefore, Owners might want to ensure that BOR clauses are adjusted accordingly.
Bunker quality clause
Some bunker quality clauses require the charterer to provide fuel that complies with the international quality standard ISO 8217. However, not all fuels are covered by ISO 8217 (e.g. hybrids) so the bunker quality clause might need to be amended to ensure that the charterer is obliged to provide fuel of the correct specification, which is safe and suitable for the vessel, and in compliance with MARPOL and any other relevant regulations.
Fuel availability
Although it is anticipated that there will be enough compliant fuel available to meet demand, it may be geographically fragmented. So a vessel might trade in areas where compliant fuel cannot be supplied or even be unable to trade in such areas, such that trading limit clauses might need to be reviewed. The same is likely to be true for new hybrids/blends, and LNG is already known to have limited availability.
Bunker tank cleaning
Bunker tank cleaning will be needed if switching from heavy fuels to hybrid/blends/ distillates. Tank cleaning might also be needed before switching between different products, depending upon the advice given by the relevant fuel provider. Cleaning products will be needed, waste will need to be disposed of and time might be lost during the cleaning. Responsibility for all of this will depend upon the charterparty wording.
Performance warranties
Different fuels have different calorific values and energy densities. The performance of the vessel could be affected by any of the chosen compliance methods so the performance warranties might need to be amended. Owners should check with engine manufacturers.
Costs of installing an EGCS
It is unlikely that existing charterparties will expressly say who is to pay for a vessel to have an EGCS installed. If the charterer is likely to benefit in fuel cost savings then there may be scope for a commercial agreement as to who will pay.
Can owners be compelled to install an EGCS?
The Court of Appeal considered this type of issue in the Elli and the Frixos [2008] 2 Lloyd’s Rep. 119. In 2005, new MARPOL regulations came into force, which made it unlawful for any ship to carry fuel oil as cargo unless it was either double-hulled or double-sided. Expensive modifications would be required to the ships in question to allow them to comply with the new regulations. The Court found that the owners were in breach of certain clauses in the particular charterparties for not having carried out the necessary modifications, namely; a warranty relating to compliance with MARPOL and a clause requiring the vessel to have on board documents required by any applicable law to allow the vessels to trade. Installation of an EGCS is only one option for compliance and, as things currently stand, it will be possible to meet the new sulphur requirements without installing an EGCS. Therefore, the absence of an EGCS on a vessel will not necessarily put the vessel or its owner in breach of MARPOL or impact on the vessel’s documentation. Hence it seems likely that the Elli and the Frixos will not apply but it will depend on the facts of the individual case.
Fines for non-compliance
In the first instance, the owner will be responsible for paying any incurred penalties but they might be entitled to be indemnified by the charterer depending upon the charterparty terms. It might be less clear who will be responsible for lost time and costs if the vessel is detained by port state control.
Looking ahead
Early consideration of the above issues will be key to avoiding future headaches. The solutions will not be the same in every case and will be best considered in the context of the trade that the vessel is going to perform. Additional issues could arise as technologies develop and as we get an idea about availability of compliant fuels etc, which might necessitate further review of charterparties from time to time.
Source: North P&I Club

If you believe an article violates your rights or the rights of others, please contact us.

Recent News

Thursday, 18 July 19
World Trade in Hard Coal Rose by 4.7% in 2018 Hard Coal Can Prevent Stress in the Electric Power System in Germany   • Sharp decl ...

Wednesday, 17 July 19
The Strait of Hormuz is one of the most important waterways in the world, connecting crude producers in the Middle East with key markets in the res ...

Tuesday, 16 July 19
Japanese utilities will rely on the return of coal-fired power plants from maintenance to meet peak electricity demand this summer, highlighting th ...

Tuesday, 16 July 19
Capesize It was a Brazilian affair with a strong splash of bunkers characterising the Capesize market over the past week. Largely traded in Eur ...

Wednesday, 10 July 19
KOREA SOUTH-EAST POWER INVITES BIDS FOR HCV AND LCV COAL FOR AUGUST 2019 LOADING South Korea’s Korea South-East Power Co., Ltd. (KOEN) has issued an international tender for total 460,000 to 500,000 Metric To ...

   1 2 3 4 5   
Showing 1 to 5 news of total 5508
News by Category
Popular News
Total Members : 26,344
User ID
Remember Me
By logging on you accept our TERMS OF USE.
Forgot Password
Our Members Are From ...

  • Arutmin Indonesia
  • Binh Thuan Hamico - Vietnam
  • Samtan Co., Ltd - South Korea
  • Vitol - Bahrain
  • Inspectorate - India
  • Romanian Commodities Exchange
  • Bukit Baiduri Energy - Indonesia
  • PLN Batubara - Indonesia
  • Chettinad Cement Corporation Ltd - India
  • Goldman Sachs - Singapore
  • Madhucon Powers Ltd - India
  • NALCO India
  • Indorama - Singapore
  • ETA - Dubai
  • Shree Cement - India
  • New Zealand Coal & Carbon
  • Sojitz Corporation - Japan
  • Indonesian Coal Mining Association
  • Jatenergy - Australia
  • Peabody Energy - USA
  • Maybank - Singapore
  • PNOC Exploration Corporation - Philippines
  • Enel Italy
  • Marubeni Corporation - India
  • CESC Limited - India
  • MEC Coal - Indonesia
  • Fearnleys - India
  • Medco Energi Mining Internasional
  • ASAPP Information Group - India
  • Platou - Singapore
  • Interocean Group of Companies - India
  • RBS Sempra - UK
  • Independent Power Producers Association of India
  • Bukit Asam (Persero) Tbk - Indonesia
  • European Bulk Services B.V. - Netherlands
  • Jindal Steel & Power Ltd - India
  • Total Coal South Africa
  • McConnell Dowell - Australia
  • Minerals Council of Australia
  • Japan Coal Energy Center
  • Uttam Galva Steels Limited - India
  • Bharathi Cement Corporation - India
  • Argus Media - Singapore
  • Qatrana Cement - Jordan
  • Deutsche Bank - India
  • Ministry of Mines - Canada
  • World Bank
  • Kumho Petrochemical, South Korea
  • CIMB Investment Bank - Malaysia
  • Samsung - South Korea
  • Pendopo Energi Batubara - Indonesia
  • ANZ Bank - Australia
  • Miang Besar Coal Terminal - Indonesia
  • J M Baxi & Co - India
  • Mechel - Russia
  • McKinsey & Co - India
  • Maruti Cements - India
  • IHS Mccloskey Coal Group - USA
  • Power Finance Corporation Ltd., India
  • APGENCO India
  • globalCOAL - UK
  • Mercator Lines Limited - India
  • PLN - Indonesia
  • SUEK AG - Indonesia
  • Meenaskhi Energy Private Limited - India
  • PetroVietnam Power Coal Import and Supply Company
  • PetroVietnam
  • Gresik Semen - Indonesia
  • Runge Indonesia
  • Bangkok Bank PCL
  • Trasteel International SA, Italy
  • Kalimantan Lumbung Energi - Indonesia
  • Billiton Holdings Pty Ltd - Australia
  • Africa Commodities Group - South Africa
  • Cosco
  • Bank of Tokyo Mitsubishi UFJ Ltd
  • SMG Consultants - Indonesia
  • Britmindo - Indonesia
  • Sinarmas Energy and Mining - Indonesia
  • Banpu Public Company Limited - Thailand
  • JPMorgan - India
  • GNFC Limited - India
  • IOL Indonesia
  • Indian School of Mines
  • Orica Mining Services - Indonesia
  • Ambuja Cements Ltd - India
  • SGS (Thailand) Limited
  • Attock Cement Pakistan Limited
  • Asian Development Bank
  • Wood Mackenzie - Singapore
  • CNBM International Corporation - China
  • Cargill India Pvt Ltd
  • Georgia Ports Authority, United States
  • Electricity Generating Authority of Thailand
  • PowerSource Philippines DevCo
  • Mitra SK Pvt Ltd - India
  • Essar Steel Hazira Ltd - India
  • Coeclerici Indonesia
  • OPG Power Generation Pvt Ltd - India
  • Thiess Contractors Indonesia
  • Rashtriya Ispat Nigam Limited - India
  • Oldendorff Carriers - Singapore
  • Merrill Lynch Commodities Europe
  • Arch Coal - USA
  • Sakthi Sugars Limited - India
  • Ministry of Transport, Egypt
  • TeaM Sual Corporation - Philippines
  • Grasim Industreis Ltd - India
  • Bank of America
  • Commonwealth Bank - Australia
  • Mitsubishi Corporation
  • GVK Power & Infra Limited - India
  • South Luzon Thermal Energy Corporation
  • Cemex - Philippines
  • Shenhua Group - China
  • ING Bank NV - Singapore
  • The Treasury - Australian Government
  • Latin American Coal - Colombia
  • Chamber of Mines of South Africa
  • Makarim & Taira - Indonesia
  • Economic Council, Georgia
  • Formosa Plastics Group - Taiwan
  • Bangladesh Power Developement Board
  • Clarksons - UK
  • Coal and Oil Company - UAE
  • ACC Limited - India
  • Pinang Coal Indonesia
  • Thailand Anthracite
  • Intertek Mineral Services - Indonesia
  • Thriveni
  • Altura Mining Limited, Indonesia
  • Heidelberg Cement - Germany
  • KOWEPO - South Korea
  • Malabar Cements Ltd - India
  • Agrawal Coal Company - India
  • Simpson Spence & Young - Indonesia
  • Energy Link Ltd, New Zealand
  • UBS Singapore
  • Adani Power Ltd - India
  • Siam City Cement - Thailand
  • Noble Europe Ltd - UK
  • KPMG - USA
  • OCBC - Singapore
  • Lanco Infratech Ltd - India
  • Kapuas Tunggal Persada - Indonesia
  • PTC India Limited - India
  • GHCL Limited - India
  • Star Paper Mills Limited - India
  • Renaissance Capital - South Africa
  • Indonesia Power. PT
  • Surastha Cement
  • Thai Mozambique Logistica
  • Lafarge - France
  • SASOL - South Africa
  • Indogreen Group - Indonesia
  • Coaltrans Conferences
  • Petrochimia International Co. Ltd.- Taiwan
  • Posco Energy - South Korea
  • Kobexindo Tractors - Indoneisa
  • Australian Commodity Traders Exchange
  • Dong Bac Coal Mineral Investment Coporation - Vietnam
  • Rio Tinto Coal - Australia
  • Directorate Of Revenue Intelligence - India
  • Indika Energy - Indonesia
  • Ministry of Finance - Indonesia
  • IEA Clean Coal Centre - UK
  • Videocon Industries ltd - India
  • Standard Chartered Bank - UAE
  • Geoservices-GeoAssay Lab
  • Permata Bank - Indonesia
  • BRS Brokers - Singapore
  • Maersk Broker
  • Ceylon Electricity Board - Sri Lanka
  • Mintek Dendrill Indonesia
  • Price Waterhouse Coopers - Russia
  • Bahari Cakrawala Sebuku - Indonesia
  • The India Cements Ltd
  • Reliance Power - India
  • Freeport Indonesia
  • Cardiff University - UK
  • Central Electricity Authority - India
  • Australian Coal Association
  • Riau Bara Harum - Indonesia
  • IBC Asia (S) Pte Ltd
  • Asia Cement - Taiwan
  • WorleyParsons
  • Infraline Energy - India
  • Tata Chemicals Ltd - India
  • Gujarat Mineral Development Corp Ltd - India
  • Alfred C Toepfer International GmbH - Germany
  • Mjunction Services Limited - India
  • Timah Investasi Mineral - Indoneisa
  • BNP Paribas - Singapore
  • Gupta Coal India Ltd
  • Vedanta Resources Plc - India
  • Orica Australia Pty. Ltd.
  • TANGEDCO India
  • Panama Canal Authority
  • IMC Shipping - Singapore
  • World Coal - UK
  • Ince & co LLP
  • Singapore Mercantile Exchange
  • LBH Netherlands Bv - Netherlands
  • Manunggal Multi Energi - Indonesia
  • Vizag Seaport Private Limited - India
  • UOB Asia (HK) Ltd
  • Straits Asia Resources Limited - Singapore
  • CCIC - Indonesia
  • Mitsui
  • Aboitiz Power Corporation - Philippines
  • Jorong Barutama Greston.PT - Indonesia
  • Xstrata Coal
  • Karaikal Port Pvt Ltd - India
  • Cement Manufacturers Association - India
  • Asmin Koalindo Tuhup - Indonesia
  • The State Trading Corporation of India Ltd
  • Tata Power - India
  • Xindia Steels Limited - India
  • Tanito Harum - Indonesia
  • Bhatia International Limited - India
  • Barclays Capital - USA
  • Platts
  • Bhushan Steel Limited - India
  • GAC Shipping (India) Pvt Ltd
  • Berau Coal - Indonesia
  • KEPCO - South Korea
  • Ind-Barath Power Infra Limited - India
  • Jaiprakash Power Ventures ltd
  • Truba Alam Manunggal Engineering.Tbk - Indonesia
  • Barasentosa Lestari - Indonesia
  • Thomson Reuters GRC
  • Kobe Steel Ltd - Japan
  • Carbofer General Trading SA - India
  • Global Coal Blending Company Limited - Australia
  • KPCL - India
  • Bank of China, Malaysia
  • Coastal Gujarat Power Limited - India
  • Gujarat Electricity Regulatory Commission - India
  • Rudhra Energy - India
  • Coalindo Energy - Indonesia
  • Toyota Tsusho Corporation, Japan
  • Filglen & Citicon Mining (HK) Ltd - Hong Kong
  • Tamil Nadu electricity Board
  • JPower - Japan
  • Bulk Trading Sa - Switzerland
  • Port Waratah Coal Services - Australia
  • Petrosea - Indonesia
  • Neyveli Lignite Corporation Ltd, - India
  • Leighton Contractors Pty Ltd - Australia
  • Bayan Resources Tbk. - Indonesia
  • Kohat Cement Company Ltd. - Pakistan
  • HSBC - Hong Kong
  • Core Mineral Indonesia
  • GB Group - China
  • Idemitsu - Japan
  • Indo Tambangraya Megah - Indonesia
  • Larsen & Toubro Limited - India
  • Antam Resourcindo - Indonesia
  • GMR Energy Limited - India
  • Anglo American - United Kingdom
  • Parliament of New Zealand
  • Maheswari Brothers Coal Limited - India
  • The University of Queensland
  • EMO - The Netherlands
  • Mercuria Energy - Indonesia
  • Indian Oil Corporation Limited
  • Ernst & Young Pvt. Ltd.
  • Offshore Bulk Terminal Pte Ltd, Singapore
  • Glencore India Pvt. Ltd
  • Inco-Indonesia
  • Sree Jayajothi Cements Limited - India
  • Sucofindo - Indonesia
  • Coal Orbis AG
  • Central Java Power - Indonesia
  • EIA - United States
  • White Energy Company Limited
  • Kaltim Prima Coal - Indonesia
  • VISA Power Limited - India
  • Metalloyd Limited - United Kingdom
  • Bukit Makmur.PT - Indonesia
  • Adaro Indonesia
  • Dalmia Cement Bharat India
  • U S Energy Resources
  • Borneo Indobara - Indonesia
  • Directorate General of MIneral and Coal - Indonesia
  • Cigading International Bulk Terminal - Indonesia
  • Gujarat Sidhee Cement - India
  • Moodys - Singapore
  • Sindya Power Generating Company Private Ltd
  • India Bulls Power Limited - India
  • Kartika Selabumi Mining - Indonesia
  • Eastern Coal Council - USA
  • Kideco Jaya Agung - Indonesia
  • SRK Consulting
  • Globalindo Alam Lestari - Indonesia
  • Merrill Lynch Bank
  • ICICI Bank Limited - India
  • Wilmar Investment Holdings
  • DBS Bank - Singapore
  • bp singapore
  • Edison Trading Spa - Italy
  • Maharashtra Electricity Regulatory Commission - India
  • Eastern Energy - Thailand
  • International Coal Ventures Pvt Ltd - India
  • Thermax Limited - India
  • CoalTek, United States
  • Sical Logistics Limited - India
  • Credit Suisse - India
  • NTPC Limited - India
  • Bhoruka Overseas - Indonesia
  • Planning Commission, India
  • TNB Fuel Sdn Bhd - Malaysia
  • Krishnapatnam Port Company Ltd. - India
  • Vijayanagar Sugar Pvt Ltd - India
  • Dr Ramakrishna Prasad Power Pvt Ltd - India
  • Aditya Birla Group - India
  • MS Steel International - UAE
  • Holcim Trading Pte Ltd - Singapore
  • Karbindo Abesyapradhi - Indoneisa
  • London Commodity Brokers - England
  • Malco - India
  • Siam City Cement PLC, Thailand
  • Deloitte Consulting - India
  • Coal India Limited
  • Savvy Resources Ltd - HongKong
  • Humpuss - Indonesia
  • Salva Resources Pvt Ltd - India
  • Vale Mozambique
  • Russian Coal LLC
  • TNPL - India
  • Parry Sugars Refinery, India