The international shipping organisation BIMCO and the shipping giant Maersk have suggested that the time has come to review the regulatory minimum flash point limit for marine fuels, in particular for marine distillates.
The International Maritime Organization (IMO) SOLAS regulation requires that fuel used on board ships shall have a flash point of not less than 60°C.  This is also stated as the minimum flash point limit for marine fuels in ISO 8217, the global fuel standard from the International Organization for Standardization (ISO).
Flashpoint refers to the lowest temperature at which a fuel can vaporise to form an ignitable mixture in air.  Lowering the flash point for marine distillates from 60°C to 55°C would bring it into line with the limit for inland distillate fuels in Europe and potentially open up a wider supply basis for the marine fuels market.
Demand for low sulphur marine gas oil (MGO) has been growing due to European Union (EU) requirements for ships at berth to use fuels with maximum 0.1% sulphur content.  Demand for this fuel is expected to surge when the sulphur limit in Emission Control Areas (ECAs) falls to 0.10% in 2015 under the IMO's MARPOL Annex VI regulation.
Reports suggest there has already been an increase in supply of low sulphur marine MGO where the flash point is near or below the minimum 60°C limit, indicating that some fuels from the inland market are finding their way into the marine fuels sector.
Incidents of MGO failing to meet the ISO and SOLAS flash point limit could increase as demand grows, leading to more off-specification claims between bunker suppliers and buyers.
Because of the safety risk associated with the flash point being below the limit, and the statutory nature, such off-specification incidents are viewed as particularly serious.  The testing agency DNV Petroleum Services (DNVPS) has warned that marine fuels with flash point below 60°C violate Classification Rules as well as the SOLAS regulation, and could render a ship 'out of class'.
The reasoning behind the 60°C minimum limit in the SOLAS requirement appears to have been lost in the mists of time, but work is going on at the ISO to collate information on flash point regulations to  establish the reasons, as well as why there are differences between flash point requirements for inland and marine gas oils.
Observers have noted that distillate fuels with lower flash points are often used in land-based vehicles and equipment in very hot conditions, without incident.
Niels Henrik Lindegaard from Maersk Oil Trading told the SIBCON 2010 conference that "the technology and knowledge of safe fuel handling has come a long way" since the IMO rules regarding flash point were created in 1974.
The managing director of DNVPS, Eirik Andreassen, told Bunkerworld that changing the flash point limit for marine fuel "will be a daunting task" that will require a range of IMO conventions, codes and resolutions that refer to the current limit to be assessed for safety implications before any changes can be made
"Our view is of course that the safety imperative must not be compromised.  Therefore, all proposed changes to any standards and practices must be supported by conclusive scientific research," he stressed.
Ultimately, the question boils done to what flash point limit represents an acceptable safety risk on board ships, and if the limit considered acceptable for land-based fuels can be translated to safe ship operations.

 Japan's Universal Shipbuilding announced Tuesday it has started marketing the next generation 209,000-dwt capesize bulker, as the first of the "G (Green) Bulker Series", which reduces greenhouse gas emissions by 25%. 

Hull was optimized by introducing new "LEADGE-Bow" and propulsion efficiency was improved through SSD and Surf-Bulb. 

In addition, an electricity controlled engine, waste heat recovery system and optimized route search system help the new 209,000-dwt bulker cut fuel consumption compared to Universal’s existing 202,000-dwt bulker. 

Shipowners with vessels trading to China are going to have a relatively short time frame in which to enter into a pollution clean-up contract with a pollution response contractor approved by China's Maritime Safety Administration (MSA).
The contracts must be entered into, before any ship enters a People's Republic of China (PRC) port, by owners/operators of (a) any ship carrying polluting and hazardous cargoes in bulk or (b) any other vessel above 10,000 gt. They are required under PRC Regulations on the Prevention and Control of Marine Pollution from Ships.
Approved clean up contractors will be categorized by the MSA in accordance with their qualifications and response capabilities and will be assigned level 1, 2, 3 or 4 status. Operators will need to contract with an approved clean up contractor in accordance with the size, type and the intended operation of the vessel.
Shipowners who members of P&I Clubs in the International Group have been informed that it is now understood that the lists of all approved contractors will be issued in October 2011. The requirement to contract with an approved clean up contractor will still be enforced in all Chinese ports from January 1, 2012. There will therefore be a relatively short period of time for operators to contract with an approved spill responder.
The International Group has previously advised members that the term "operator" for the purposes of concluding and signing the contract with a clean up contractor is defined by the MSA as the owner, manager or actual operator of a ship. In respect of those operators not domiciled in China, the International Group now understands that the ship's agent in port, Club correspondent, local law firm or another legal entity located in mainland China (not Hong Kong, China or Macau, China) may sign the contract on behalf of the operator if authorized by the operator to do so. The International Group understands that the Master may also sign the contract, which may be necessary in certain circumstances, for example where speed is necessary, although an authorization would still be necessary for the Master to sign on behalf of the operator.
The International Group is considering the development of a standard form authorization letter for overseas operators for this purpose and is also continuing to consider the development of supplemental and amending clauses for inclusion in the contract.
Shipowners will have to scramble to meet new PRC pollution regs Shipowners with vessels trading to China are going to have a relatively short time frame in which to enter into a pollution clean-up contract with a pollution response contractor approved by China's Maritime Safety Administration (MSA).
The contracts must be entered into, before any ship enters a People's Republic of China (PRC) port, by owners/operators of (a) any ship carrying polluting and hazardous cargoes in bulk or (b) any other vessel above 10,000 gt. They are required under PRC Regulations on the Prevention and Control of Marine Pollution from Ships.
Approved clean up contractors will be categorized by the MSA in accordance with their qualifications and response capabilities and will be assigned level 1, 2, 3 or 4 status. Operators will need to contract with an approved clean up contractor in accordance with the size, type and the intended operation of the vessel.
Shipowners who members of P&I Clubs in the International Group have been informed that it is now understood that the lists of all approved contractors will be issued in October 2011. The requirement to contract with an approved clean up contractor will still be enforced in all Chinese ports from January 1, 2012. There will therefore be a relatively short period of time for operators to contract with an approved spill responder.
The International Group has previously advised members that the term "operator" for the purposes of concluding and signing the contract with a clean up contractor is defined by the MSA as the owner, manager or actual operator of a ship. In respect of those operators not domiciled in China, the International Group now understands that the ship's agent in port, Club correspondent, local law firm or another legal entity located in mainland China (not Hong Kong, China or Macau, China) may sign the contract on behalf of the operator if authorized by the operator to do so. The International Group understands that the Master may also sign the contract, which may be necessary in certain circumstances, for example where speed is necessary, although an authorization would still be necessary for the Master to sign on behalf of the operator.
The International Group is considering the development of a standard form authorization letter for overseas operators for this purpose and is also continuing to consider the development of supplemental and amending clauses for inclusion in the contract.

Japan, dethroned as the world’s biggest shipbuilding nation over the past decade, is promoting mergers among local shipyards to help compete with China and South Korea.
The Maritime Bureau, which oversees the industry, is surveying companies to help find potential combinations, Director-General Norifumi Idee said yesterday in an interview in Tokyo. He declined to name any possible tie-ups.
“Japanese yards need to invest in research and development,” he said. “By merging operations, it will be easier to do that.”
Japanese yards need to grow in size and develop new technologies as they have lost market share to larger shipbuilders overseas, he said. China has become the world’s biggest shipbuilding nation, a title previously held for decades by Japan, on the back of government investment and low wages.
The stronger yen has also prompted merger talks among Japanese shipbuilders, as the currency makes their vessels more expensive. Most Japanese-made ships are sold in dollars. JFE Holdings Inc. (5411), Japan’s second-largest steelmaker, and IHI Corp. (7013) are holding talks on combining their shipbuilding operations. The deal could be expanded to include other yards, Shinjiro Mishima, head of JFE’s shipyard unit, said in March.
Japanese shipyards are investing fuel-saving technologies to lure customers. Imabari Shipbuilding Co., the country’s largest shipyard, for instance, has developed a hybrid fin that is attached behind a ship’s propeller and helps channel the flow of water to the rudder. That cuts fuel use by as much as 6 percent.
Japanese shipyards had a backlog of 71.3 million deadweight tons of orders as of May 1, compared with 143.4 million for South Korea and 184.7 million for China, according to shipbroker Clarkson Plc.

International Shipping Industry Makes First Steps to Increase Fuel Efficiency and Reduce Emissions
Posted on Aug 2nd, 2011 with tags Efficiency, Emissions, first, Fuel, Increase, Industry, International, makes, News by topic, reduce, SHIPPING, Steps.
The international shipping industry has taken its first steps to increase fuel efficiency and reduce emissions.
The International Maritime Organisation (IMO) has agreed to enforce stronger energy efficiency standards for new ships beginning in 2013.
From July 11 – 15, 65 governments met at the United Nations International Maritime Organisation (IMO) in London and voted to move forward on reducing emissions in the worldwide shipping industry.
A group of countries led by the European Union states called for the introduction of minimum energy efficiency design index (EEDI) standards for the next generation of ships.
The standards would encourage designs and technology that can improve efficiency and reduce emissions, but a group of developing countries, led by China and Brazil, and supported by South Africa, had been lobbying hard against them.
In the end, the vote favored the EEDI standards, which are expected to save the shipping industry $5 billion, and more than 20 million tons of CO2 emission per year.
Non-profit group The Carbon War Room, which runs Operation Rock the Boat and ShippingEfficiency.org, calls the IMO’s move “historic.”
However, the group also notes that greater investment in carbon reducing technologies will result if EEDI were applied to the entire existing fleet. It would save the industry more than 220 million tons of CO2 and $50 billion a year, they say.

Japanese shipbuilders, leapfrogged by South Korean and Chinese yards in an industry they once dominated, are counting on fuel-saving technology to help them overcome a stronger yen and high wages, according to Exim News Service.
"There’s a sense of crisis in the medium to long term with the currency," said Mr Hiroshi Minami, President of Oshima Shipbuilding Co., based in Saikai, Nagasaki prefecture. "We need to focus on more fuel-efficient ships to compete."
Japan’s backlog for ship orders is less than half the size of both China’s and South Korea’s as prices about 20 per cent higher than in China dent sales in a market worth $ 95 billion a year.
Oshima Shipbuilding, Imabari Shipbuilding Co., Japan’s largest shipyard, and other local vessel makers are now backing global fuel-use standards, similar to cars’ mileage ratings, to highlight cost savings for operators as oil prices rise.
"Fuel consumption is what matters," said Mr Klaus Nyborg, Chief Executive Officer of Pacific Basin Shipping Ltd, whose dry bulk fleet, excluding charters, is almost 90 per cent made in Japan. "It’s the difference between breaking even or making a loss."
A Japanese Handysize dry bulk ship typically uses about 24 tonnes of fuel a day, compared with 28 tonnes for Chinese-made ones, said Mr Nyborg. That translates into about $ 2,700 a day of cost savings on fuel.
A Japan-made Handysize costs about $ 30 million, compared with $ 25 million to $ 26 million for a Chinese one, according to Rome-based shipowner d’Amico Societa di Navigazione SpA. The price of Japanese-made ships, which is usually quoted in dollars, has climbed as the yen strengthened in three of the past four years.
Japan lost its lead as the world's largest shipbuilding country by orders to South Korea in 2005 and dropped to No. 3 behind China the following year, figures from Japan’s shipbuilding association show.
China took the top spot in 2009 as the government pumped money into shipbuilders to help ensure supplies of raw materials from overseas and to prop up yards during the global financial crisis.
Chinese yards also benefited from lower wages.
To help highlight fuel efficiency, Japanese shipyards are backing the global standards set to be discussed next month by the International Maritime Organisation. The United Nations agency’s index will define a minimum efficiency level for various types of ships, that will be raised every five years to encourage improvement.

South Korean government is to introduce laws enforcing eco-friendly ship construction in the country after International Maritime Organization's recent decision to adopt Energy Efficiency Design Index.
The Ministry of Land, Transport and Maritime Affairs plans to come up with related regulations by the end of 2012. 
From 2013 onwards, newbuildings will have to be constructed and operated in accordance with legal standards regarding carbon emission (g/ton·mile).
The MLTM is to form a task force, comprising officials from the government and private sectors, in November.
Meanwhile, the new eco ship regulation would have a great effect on shipbuilding, shipping, steel and equipment industries.
An official from Hyundai Heavy Industries said, "IMO and the government's decision would result in a big change in the market. Large companies will benefit from it but smaller firms would face more difficulties."

Ministry of Industry and Information Technology of the People's Republic of China (MIIT) has ratified a number of industry standards, which includes 109 Shipbuilding industry standards and would be enforced by October 1 this year.   

The imminent shipbuilding standards cover a wide range of newbuilds respects, such as ship designing, welding, coating, launching and ship parts, etc. 

Apart from standards for specific product, those criteria also involve the construction process and technologies, etc. Those clauses would possess great guidance significance on Chinese shipbuilding industry.

Implementation of these standards is expected to help Chinese shipbuilding enterprises to better meet international requirements, raise overall newbuilding quality and enhance competitiveness in international market.

It is reported that these standards would be uniformly published by the China Shipbuilding Technology and Economy Research Organization.

In July 1990 the US Congress passed OPA (90). Its intention was to phase out single hull tankers over 20 years; require ships to have oil spill response plans; and make shipowners responsible for oil spills. This controversial legislation was picked up by the IMO and, 20 years later, single hull tankers have gone and oil spills are massively reduced. So, regulations do work.
Greenhouse Gas
Now there is a new challenge. Last week, the IMO agreed a package (in MARPOL Annex VI) to ensure that new ships are more energy efficient and cut greenhouse gas emissions. For each ship ordered after 1st January 2013, an Energy Efficiency Design Index (EEDI) will be calculated based on efficiency data generated during sea trials. Over time the acceptable level of the index will be cut, ensuring that each generation of new ships is more energy efficient. In addition, to drive operational efficiency improvements, a Ship Energy Efficiency Management Plan (SEEMP) is required to demonstrate operational improvements.
Breaking with Convention
Luckily, a recent revolution in ship cost economics will be pushing in the same direction. In 2008 the annual capital cost of a new Panamax bulker was around $6m, and the annual bunker cost $3.3m. Today, the capital cost has dropped to $2m but bunker costs are $5.5m (see graph).
This revolution will impact on ship design and the obvious target is speed. The economics work, but for investors it is a nightmare decision. Many remember the underpowered tankers ordered when bunkers were expensive in the early 1980s, but which soon became white elephants when oil prices fell. So, ordering a slow, efficient ship can be a big risk. But if everyone has to do it to meet a regulatory target, the risk is greatly reduced.
Market Forces at Work
But could this cost revolution be just a blip? In 1980, the cost of operating a Panamax bulk carrier was about $10m, of which $2m was bunkers and $5.6m was capital (see cost definition in graph). At the time oil was expensive ($40/bbl), but capital costs were outrageous (14% interest). Since then the long-term trend in capital costs has been downwards, but, over the last decade, the long-term trend in fuel costs has been upwards. As a result, in the last three years for the first time, fuel costs are well above capital costs, inverting the importance of fuel and capital costs. Capital now costs only $2m a year, but fuel $5.5m a year. That is certainly starting to look like a revolution.
The all Energy Agenda
So, there you have it. Today regulatory requirements and economic necessity seem to be working in tandem. Shipyards, facing a tough market, are sharpening their energy efficiency models, and shipowners are debating the same issue (when they can get their minds off the appalling bunker bills). Have a nice day.

The Marine Environment Protection Committee (MEPC) of the IMO has adopted mandatory measures to reduce greenhouse gases from international shipping starting from 1 January 2013. All ships of 400 gt and above will need to comply with the Energy Efficiency Design Index (EEDI), which is a performance-based mechanism that leaves the choice of technologies to use in a specific ship design to the industry. As long as the required energy-efficiency level is attained, ship designers and builders would be free to use the most cost-efficient solutions for the ship to comply with the regulations. The new EEDI regulation, however, may be waived for new ships of 400 gross tonnages and above. The new measures were adopted last Friday at the conclusion of the 62nd meeting of MEPC from 11-15 July in London. The EEDI requirement forms part of the amendments to MARPOL Annex VI regulations for prevention of air pollution from ships. A new Ship Energy Efficiency Management Plan (SEEMP), which establishes a mechanism for operators to improve the energy efficiency of ships, is also added.