Why “Bad Bunkers” Charges Must Be Understood?

Why accusations of ‘bad bunkers’ must be read in context, interprets a Lloyd’s List news article.

Industry concerns regarding accountability and quality standards

Recent Lloyd’s List coverage has highlighted industry concerns regarding accountability and quality standards within the bunker sector. Unni Einemo, director of the International Bunker Industry Association, offers a counter view

THE bunkering sector rarely gets good press, but who does? Fair criticism is fine, but I would like to point out some misconceptions and narratives that aren’t helpful.

Recent reports in Lloyd’s List have highlighted frustration regarding cases of so-called “bad bunkers”. The shipping industry is calling for more accountability from bunker suppliers. Understandably, they are frustrated by what they see as suppliers refusing to accept responsibility for fuel-related problems, or not facing repercussions.

At IBIA, we do not dispute that bunker suppliers are responsible for providing the right quality and quantity of fuels. IBIA is also calling for more ports to implement well-designed bunker licensing systems with effective and pro-active enforcement to improve bunker market conditions, as we have seen in Singapore.

But let’s take a more nuanced look at so-called “bad bunkers” to put the subject into perspective.

We have an international standard, ISO 8217, to judge fuel quality against. It sets limit values for specific parameters that helps ensure the fuel can be safely used providing it is correctly managed and treated onboard the receiving ship. Problems can also be due to poor fuel management, and the very low sulphur fuel oil (VLSFO) blends produced to meet the 0.50% sulphur limit (IMO 2020) have presented more challenges for onboard fuel management.

VLSFOs tend to be more sensitive to temperature settings during storage and centrifuging, and present a higher risk of incompatibility when co-mingling with other fuels than typical HSFO blends. The main problems arising from this is sludging.

Most of the time, ships receive fuels that meet relevant quality specifications and use them without incident. That doesn’t make the headlines; only off-specs do. Only a small share of residual marine fuels tested globally test off-spec against ISO 8217 parameters.

During 2021 and 2022, quarterly off-spec figures for VLSFOs from one fuel testing agency ranged from 1.3% to 2.4%, and averaged around 4% for all types of residual marine fuel grades. Within the global average, there are regional differences with some ports and regions performing significantly worse than others on critical parameters like sulphur (Marpol compliance) and sediments (an indicator of fuel stability).

The global figure also includes off-specs that aren’t critical to ship safety, for example slight exceedances of water and density limits. There’s still a commercial issue, but statistics can paint an overly alarming picture if you don’t know the full story.

From time to time, chemical compounds that are not specified in ISO 8217 are suspected to be the cause of operational problems or damage within a ship’s fuel system or engine, and hence may be in contravention of Clause 5 in ISO 8217. There’s not much statistics available on how common this type of off-spec is; but it is a tiny fraction of global deliveries and typically limited to short-lived, regionally confined episodes.

Observers may find it surprising that ISO 8217 doesn’t have a bigger specified list of chemical compounds that can be expected to be found during analysis, along with defined acceptable limits. This is complicated, because residual marine fuels (those covered by Table 2 of ISO 8217) can contain thousands or even millions of different chemicals, and it is impossible to test for every conceivable chemical species.

There must be a clearly established link between a specific chemical species and operational problems, an agreed limit value, and a standardised test methodology before it can be included in ISO 8217.

However, there are different expert opinions about which chemicals are harmful, and at what concentrations. Operational problems with HSFO originating from the US Gulf in the spring of 2018 demonstrates the difficulty. Although a large number of ships experienced similar operational problems, and several fuel testing agencies shared their findings and theories, they did not agree on the root cause of the problems.

To make matters even more complicated, it appeared that several ships used fuel from the same source without incident, without any clear differences between engine types and fuel systems, leaving a question-mark over the role of onboard fuel management. To date, there is no consensus about which chemicals were to blame.

By contrast, there was broad consensus among fuel testing agencies about the type of chemicals (Chlorinated Organic Compounds) that were the culprit in the 2022 Singapore HSFO contamination case, so we might expect this to be addressed in the next revision of ISO 8217.

When looking for potential contaminants in bunkers that aren’t identified during routine ISO 8217 analysis, fuel testing agencies have developed in-house methods using gas chromatography – mass spectrometry (GCMS). There is also a standardised GCMS method, namely ASTM D7845, that allows for a selected list of substances (currently 29) to be identified and quantified. Examples include indene and various phenolic compounds which can be naturally occurring in crude oil. So, should we be worried about indene and phenolic compounds?

Unfortunately, testing agencies struggle to agree on which ones are a cause for concern, and at what concentrations. What we need to know about these “usual suspects” is how common they are overall, not just when they are found in fuels associated with operational issues. As they are not specified in ISO 8217, there’s not a lot of statistics available on how common they are, but from what I have learnt, indene and some phenolic compounds are commonly found in randomly selected fuel samples that were not associated with operational issues.

Work is constantly underway to identify links between specific chemicals and operational problems, but it is complicated by commercial and legal interests. It requires detailed fuel analysis and investigation into exactly what happened on the ship. We need data from multiple fuel testing agencies to establish cause and effect. We also need cooperation from the supply-side to help identify the sources of problem fuels, and preventing batches of fuels that are suspected of causing problems from being supplied to other ships.

When something has gone wrong, however, both the supplier and the owner of the ship will be reluctant to share any information that may expose them to admitting liability for any damage caused. This isn’t helpful, but both parties want to avoid the full cost.

Complaints about the bunker industry and demands for more accountability from the supply side are indeed understandable, but consider this: do you think bunker suppliers deliberately expose themselves to potential quality claims by selling bunkers that they know are off-spec and/or contaminated with something that will cause harm? Taking into account the time, effort and potentially significant costs they face from such quality disputes, and the reputational damage, it is more likely that these unfortunate incidents are for the most part accidental.

Yes, more care can be taken in the supply chain, in particular when selecting cutter-stock for blending, and in avoiding cross-contamination from other products due to shared storage and distribution facilities. Some suppliers will blend too close to known limits in a bid to keep costs down in a hugely competitive market with price-oriented bunker buyers.

More often than not, and especially in big bunkering hubs such as Houston, Singapore and the ARA (Amsterdam-Rotterdam-Antwerp), the physical suppliers facing the claims from buyers are not themselves involved in the fuel production. They distribute products provided by oil majors and cargo traders and are at the mercy of the cargo provider for the quality. There is also potential for cross-contamination with other products during terminal storage and loading of barges; the same is true for the barges themselves.

Another criticism we have seen put forward is that other more high-value types of fuel do not have the same quality problems as we sometimes see with residual marine fuels. That might be true, but part of the reason is that they are less complex; only the higher-value and lighter fractions of crude oil are found in gasoline, jet fuel and diesel, while residual fuel oil concentrates the heavier fractions.

Any chemical species found in crude may be present in the residue, along with chemicals used in the refining process to squeeze more of the high-value stuff out of every drop of oil. It is very rare to hear about unusual chemical contaminants in marine distillate fuels such as DMA-grade gasoil, which is a readily available fuel option for those willing to pay a premium for a higher-grade product.

So, what about our multi-fuel future then — is that likely to give us even more problems with fuel quality control, as some argue?

I am not convinced, because most of the alternative fuels — e.g. methanol and ammonia — will have a much less complex chemical composition than the residual marine fuels that dominate global ship fuel consumption today.

Finally, I’d like to address a misconception that is quite widespread; namely confusing IMO policies aimed at reducing pollutants that have a negative impact on air quality, with IMO policies aimed at reducing shipping’s climate impact.

The IMO 2020 reduction in sulphur emissions from shipping did nothing to reduce shipping’s contribution to global warming. Ironically, the opposite may be true. Science tells us that the particulates caused by burning fuels with high sulphur content, while harmful to human health, have a net cooling effect on the climate. The world is full of unintended consequences.

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Source: LLoyd’s List

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