MARPOL Annex II Revisions

1

• MARPOL Annex II Revisions
• INTERTANKO Seminar
• Houston, TX
• 15 March 2006

2

• AGENDA
• Annex II Revisions Deadline Remains!
• IMO Ship Type Reviewed
• Products Still Missing Data
• Practical Implications of the Revisions
• Biofuels and the Revisions
• IMO 2006 Schedule
• Conclusions and Predictions

3
MARPOL Annex II Revisions

• The long-time ongoing revision work on MARPOL
  Annex II and the Chemical Carrier Code concluded
  with the adoption of the revised MARPOL Annex II
  by MEPC 52 (in October 2004) and the adoption of
  the revised IBC Code by both MEPC 52 and MSC 79
  (in December 2004).
• The revised requirements WILL enter into force
  and take effect from 1 January 2007.

4
MARPOL Annex II Revisions

• Re-categorisation of the existing pollution
  categories within MARPOL Annex II has been a
  longstanding issue at IMO
• Currently there exist 5 categories A, B, C, D and
  an Appendix III. (Appendix III lists products to
  which the IBC Code does not apply).
• Due to the re-evaluation process of the existing
  MARPOL Annex II products by GESAMP/EHS, existing
  products will be re-categorised into a new 3
  plus 1 category system

5
MARPOL Annex II Revisions

• The revision of Annex II replaces the current
  5-category system with pollution categories A, B,
  C and D and Appendix III products with a
  4-category system with pollution categories X, Y
  and Z and OS (Other Substances).

6
MARPOL Annex II Revisions

• In 2003 At MEPC 49 a 3 1 category system (X,Y,Z
  OS) was agreed upon. The fourth category
  includes Apple juice, Clay slurry, Coal slurry,
  Dextrose solution, Glucose solution, Kaoline
  slurry, Molasses, and Water
• Vegetable oils will be specified and are upgraded
  from Appendix III (of the IBC Code) to Category
  Y.

7
MARPOL Annex II Revisions

• The revision of Annex II replaces the current
  4-category system with new pollution categories.
  This has also affected what products can be
  carried in the different IMO Ship Type.

8
IMO Ship Type

• What is considered IMO Type Space?
• The IBC Code provides standards for the
  construction of three types of chemical tankers
  (Types 1, 2 and 3)
• A Type 1 ship is a chemical tanker intended for
  the transportation of products considered to
  present the greatest overall hazard and Type 2
  and Type 3 for products of progressively lesser
  hazards

9
Tank Type Configurations
10
IMO Ship Type

• IMO Type 2 Space
• A Type 2 tank is intended to transport products
  with appreciably severe environmental and safety
  hazards which require significant preventive
  measures to preclude escape of such cargo

11
IMO Ship Type

• IMO Type 2 Ship
• Some or all tanks of stainless steel
• Nitrogen for use as a blanket to exclude air from
  the tank when carrying cargoes prone to ignition
  at ambient temperatures

12
IMO Ship Type

• IMO Type 3 Ship
• A Type 3 ship is a chemical tanker intended to
  transport products with sufficiently severe
  environmental and safety hazards
• Require a moderate degree of containment to
  increase survival capability in a damaged
  condition

13
IMO Ship Type

• IMO Type 3 Ship
• Those specified in the IMO IBC Code for a Type 3
  ship are usually not listed as "hazardous"
• They are petroleum products, such as gasoil,
  naphtha, and gasoline, if equipped with an
  oil/water separator with a suitable transfer pump

14
IMO Ship Type

• IMO Type 3 Ship
• Damage stability and cargo containment
  requirements for Type 3 ships detailed in the IMO
  IBC Code
• Cargo handling and pollution prevention
  provisions of MARPOL Annex II

15
Still a Lack of Data

• December 31, 2005 has come and gone. There are
  still products currently being carried have not
  been re-evaluated by GESAMP because of a lack of
  data and information.
• Unless the necessary data are submitted by the
  end of 2005 the bulk transport of such products
  is likely to face substantial problems from 1
  January 2007 (because the required certificate
  cannot be issued).
• IMO will have to reach a compromise on this issue.

16
Still a Lack of Data

• One of the solutions being proposed would
  consider carriage in the highest requirements
  (Pollution Category X /Ship type 1 or 2) until
  the data is received for the missing products.
• This or any other proposal will have to be made
  at IMO at MEPC 54, BLG 10 or MEPC 55, all
  meetings will be held later this year.

17
Still a Lack of Data

• The 42st session of the GESAMP Working Group on
  the Evaluation of the Hazards of Harmful
  Substances Carried by Ships (EHS 42) was held at
  IMO Headquarters in London earlier this year.
• The report on this meeting has just been
  released. The most recent meeting report of
  GESAMP/EHS has indicated that approximately sixty
  products remain on the missing data list.

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Draft List of Products Still Missing Data as of
February 2006

• Alkyl(C8)amine, Alkenyl (C12) acid ester
  mixture
• Aluminum chloride (30 or less)/Hydrochloric acid
  (20 or less) solution
• 2-Amino-2-hydroxymethyl-1,3-propanediol solution
  (40 or less)
• Ammonium bisulphite solution (70 or less)
• Ammonium thiocyanate (25 or less)/Ammonium
  thiosulphate (20 or less) solution
• Benzyl chloride
• N,N-bis(2-hydroxyethyl) oleamide
• Butyl stearate
• Calcium alkyl (C9) phenol sulphide/Polyolefin
  phosphorosulphide mixture
• Calcium long-chain alkyl phenolic amine (C8-C40)
• Camphor oil
• Caramel solutions
• Cashew nut shell oil (untreated)
• Cobalt naphthenate in solvent naphtha
• Creosote (coal tar)
• Creosote (wood)

19
Draft List of Products Still Missing Data as of
February 2006

• Decyl acetate
• 1,3-Dichloropropane
• Diethylene glycol dibutyl ether
• 1,4-Dihydro-9,10-dihydroxyanthracene, disodium
  salt solution
• Dodecenylsuccinic acid, dipotassium salt solution
  
• Ethyl amyl ketone
• N-Ethylbutylamine
• Ethyl butyrate
• o-Ethylphenol
• Ethyl propionate
• Ferric hydroxyethylethylenediaminetriacetic acid,
  trisodium salt solution
• Fish solubles (water-based fish meal extract)
• Fumaric adduct of rosin, water dispersion
• Glycerine (83), Dioxanedimethanol
• Glycerol polyalkoxylate
• Icosa(oxypropane-2,3-diyl)s
• Long-chain polyetheramine in alkyl (C2-C4)
  benzenes
• Long-chain polyetheramine in aromatic solvent

20
Draft List of Products Still Missing Data as of
February 2006

• Methyl heptyl ketone
• 3-Methyl-3-methoxybutyl acetate
• Naphthenic acids
• Nonyl acetate
• Pentaethylenehexamine
• Polyalkylene oxide polyol
• Polyglycerol
• Polyolefin amide alkeneamine/molybdenum
  oxysulphide mixture
• Polyolefin amide alkeneamine polyol
• Poly(tetramethylene ether) glycol (mw 600-3000)
• Potassium salt of polyolefin acid
• n-Propyl chloride
• Propylene-Butylene copolymer

21
Draft List of Products Still Missing Data as of
February 2006

• Propylene dimer
• Rosin soap (disproportionated) solution
• Sodium aluminate solution
• Sodium tartrates/Sodium succinates solution
• Sulpho hydrocarbon long chain (C18) alkylamine
  mixture
• Tall oil fatty acid, barium salt
• Tall oil soap (disproportionated) solution
• Trimethylhexamethylenediamine (2,2,4- and
  2,4,4-isomers)
• Trimethylhexamethylene diisocyanate (2,2,4- and
  2,4,4-isomers)
• Trimethylolpropane polyethoxylate
• Trimethyl phosphite
• Urea/Ammonium mono- and di-hydrogen
  phosphate/Potassium,chloride solution
• Urea formaldehyde resin solution

22
Certification of Cargoes

• All non-oil cargoes carried in bulk are
  classified by the International Maritime
  Organization (IMO) and/or the vessels flag
  state.  The carriage requirements for a product
  are then determined by these entities using the
  guidelines set forth by GESAMP and IMO.
• If regulated by the IBC Code those cargoes must
  be authorised for carriage on that particular
  ship, and listed on, the ships Certificate of
  Fitness.

23
Certification of Cargoes

• The bulk carriage of any liquid product other
  than those defined as oil (subject to MARPOL
  Annex I) is prohibited unless the product has
  been evaluated and categorised for inclusion in
  Chapter 17 or 18 of the IBC Code (The
  International Code for the Construction and
  Equipment of Ships Carrying Dangerous Chemicals
  in Bulk).
• The MARPOL Annex II Revisions will result in an
  amended IBC Code and new certification for
  cargoes and vessels.

24
Practical Implications of the Revisions

• Every chemical tanker is required to have a
  Certificate of Fitness (CoF) indicating that it
  is certified to carry certain products.
• The issuance of a CoF will also require a revised
  Procedures and Arrangements Manual.
• Companies should be thinking about these new
  documents - NOW

25
Certificates of Fitness

• The new P A Manuals and the new Certificates
  need to be onboard each ship as of the 1 January
  2007 deadline.
• These documents must be approved/issued and
  forwarded to the ships before this date.
• Class societies and owners are working diligently
  to ensure that in late 2006 both systems will be
  in place.

26
New Certificates / P A Manuals

• All Certificates of Fitness issued under the
  present requirements will become invalid from 1
  January 2007.
• This also affects Offshore Support Vessels and
  dry cargo ships with deep tanks certified for
  carriage of noxious liquid substances.
• Cargoes legally loaded before 1 January 2007 will
  be allowed to be carried to the scheduled
  unloading port under the old requirements.
• To carry any noxious liquid substance in bulk
  from 1 January 2007 all ships will need to hold a
  Chemical Carrier Code CoF issued under the
  revised requirements.

27
Two Systems

• The revised requirements may not be used before 1
  January 2007.
• This implies that for e.g. a newbuilding being
  delivered in December 2006, it will be necessary
  to certify the ship initially under the current
  requirements (with old type P A Manual and
  CoF) and then again from 1 January 2007 with a
  new P A Manual and a new CoF with List of
  Products.

28
The CoF List

• The List of Products attached to a new
  Certificate will be calculated based on the
  revised Pollution Categories and the ships
  compliance with the revised carriage
  requirements.
• Less sophisticated chemical tankers, including
  those not complying with the present stripping
  requirements for the current pollution category B
  substances, may, under the revised requirements,
  lose a very large portion of their current List
  of Products.

29
Stripping Underwater Discharge

• An underwater discharge arrangement for tank
  washing water is required for pollution
  categories X and Y for ships keel-laid before 1
  January 2007. Newer ships will require such for
  all pollution categories X, Y and Z.
• The waiver possibilities in respect of stripping
  performance and underwater discharge arrangement
  for dedicated ships engaged in carriage of
  products not involving cleaning of cargo tanks
  will remain unchanged.
• The additional requirements for operation within
  Special Areas (except the Antarctic) have been
  deleted.

30
The Veg Oil Compromise

• As expected, products defined as "Floaters" and
  "Persistent floaters", which include the
  vegetable oils, will be assigned to Category Y.
  Under the currently defined ship typing criteria
  this will mean they have to be carried in IMO
  Type 2 ship space.
• The veg oil industry expressed concern that there
  would not be enough Type 2 tonnage to accommodate
  the post 2007 needs
• At MEPC 52 ( in 2004) a compromise was developed
  by the US, Netherlands and Panama and accepted
  by IMO. The purpose of the compromise is to
  alleviate concerns regarding a tonnage shortage.

31
The Veg Oil Compromise Accepted at MEPC 52

• An Administration may exempt ships from the
  carriage requirements under Regulation 11 for
  ships Certified to carry individually identified
  vegetable oils identified by the relevant
  footnote in chapter 17 of the IBC Code, provided
  the ship complies with the following conditions
• 1. Subject to this regulation, the NLS tanker
  shall meet all requirements for ship type 3 as
  identified in the IBC Code except for cargo tank
  location
• 2. Under this regulation, cargo tanks shall be
  located at the following distances inboard. The
  entire cargo tank length shall be protected by
  ballast tanks or spaces other than tanks that
  carry oil as follows

32
The Veg Oil Compromise Accepted at MEPC 52

• 1. Wing tanks or spaces shall be arranged such
  that cargo tanks are located inboard of the
  moulded line of the side shell plating nowhere
  less than 760 mm and
• 2. Double bottom tanks or spaces shall be
  arranged such that the distance between the
  bottom of the cargo tanks and the moulded line of
  the bottom shell plating measured at right angles
  to the bottom shell plating is not less than B/15
  (m) or 2.0 m at the centreline, whichever is the
  lesser. The minimum distance shall be 1.0 metre.
• The relevant certificate shall indicate the
  exemption granted.

33
The Vegoil Compromise

• Regulation 4.1.3 of the revised MARPOL Annex II,
  an administration might allow the carriage of
  these substances in a ship Type 3 ONLY if the
  ship complies with all requirements for a ship
  Type 3, as identified in the IBC Code, except for
  cargo tank location.
• The cargo tank location shall be in accordance
  with regulation 4.1.3.2 of the revised MARPOL
  Annex II but these ships must be constructed with
  double sides meeting the requirements for IMO
  ship Type 2 vessels and double bottom
  requirements of B/15 or 2 meters (whichever is
  the lesser) and the Certificate of Fitness shall
  indicate the exemption granted.

34
The Vegoil Compromise

• Next to each of these product listings in Chapter
  17 letter k referring to regulation 4.1.3 of
  the revised MARPOL Annex II.
• INTERTANKO has received may enquiries regarding
  converting product tankers to Type 3 ships but we
  have no concrete evidence indicates that this is
  being carried out.

35
MARPOL Annex II Revisions

• Despite the rumours
• veg oils will move
• As of today, no extensions or delays have been
  accepted by IMO.
• On 1 January 2007 veg oils will have to be
  carried in IMO Type 2 or 3 space.  

36
MARPOL Annex II Revisions What Else?

• Oil like substances will not exist (e.g xylene
  requires chemical code certificate)
• 75 litre stripping required for all tankers
  (Chemical Code/NLS) for keels laid after 1
  January 2007 (Existing IBC ships 100 litres XY-
  350 litres Z, existing NLS as good as possible)

37
How Does the IMO Decide on Ship Type?

• Ship Type Criteria - based on GESAMP hazard
  profiles in table 4.5.1 of Annex 7 to MEPC 51/11
  (Criteria for Assigning Carriage Requirements
  from Products Subject to the IBC code).

38
What is Moving Where

• There are approximately 150 products from the IBC
  Code
• that are moving to Type 2.  Here are just a few
  in alphabetical order
• Ammonia, aqueous Carbon tetrachloride
  Chlorobenzene Decanoic acid Decyl alcohol
  Dodecyl alcohol Fatty acid (saturated C13)
  Hexane Lauric acid Nonene Octanol Oleic acid
  Perchloroethylene Propylene tetramer Pyridine
  Pyrolysis gasoline Turpentine Undecanoic acid
  Undecyl alcohol

39
Big Movers Chemicals
40
Big Movers Veg Oils Fats
41
MARPOL Annex II and US Implementation

• The USCG is initiating a regulatory project to
  implement MARPOL Annex II revision. However,
  these regulations will not be completed in time
  for their entry into force date of 1 January
  2007.
• The USCG regulations that will be in effect on
  that date will be the current regulations for the
  transport of Annex II substances. 

42
MARPOL Annex II and US Implementation

• The USCG intends to develop a Navigation and
  Vessel Inspection Circular (NVIC), a guidance
  document to industry that will provide the
  industry with an elective (or alternative) method
  of complying with the regulations in effect.
• This elective method will reflect the revised
  Annex II. It will be the guidance used by
  industry and regulators.

43
MARPOL Annex II and the Carriage of Biofuels

• The term biofuel encompasses a diverse range of
  products such as bio-gas, biodiesel and
  bioethanol. Any fuel made from a renewable
  biological source is considered a biofuel.
  Biofuels include ethanol, biodiesel, and
  methanol.
• Biofuel is derived from recently living
  organisms or waste streams (agricultural,
  domestic or municipal).

44
Carriage of Biofuels BIODIESEL

• Biodiesel is produced from a variety of
  vegetable oils, including but not limited to
  palm, rape, canola, soy, linseed, coconut,
  mustard and cotton oils. It can also be
  manufactured from tallow oil and yellow grease
  (used cooking oils).
• The production process is to modify the oils
  through esterification to give glycerine as
  useable by-product.
• These products cannot be shipped under MARPOL
  Annex II using these trade names.

45
Carriage of Biofuels BIODIESEL

• Most of the discussion recently regarding the
  classification of bio-fuels under Annex II has
  been predominantly about bio-diesel.
• The majority of biodiesel cargoes are fatty acid
  methyl esters (FAME) with can have various
  compositions. There are only three fatty acid
  methyl esters approved for carriage under the
  current MARPOL Annex II
• Palm oil fatty acid methyl ester (currently in
  the IBC Code)
• Coconut oil fatty acid methyl ester (currently in
  the IBC Code)
• Rapeseed oil fatty acid methyl ester (currently
  in list 1 of MEPC.2 Circ)
• All three of these products are currently
  Category D and Chapter 18.

46
Carriage of Biofuels BIODIESEL

• Any new data that has been submitted on these
  products will be considered at BLG 10 in April
  2006.
• If approved by BLG 10 they will be included on
  List 1 of the 2006 edition of the MEPC.2/Circ.,
  most likely as Category Y and Ship Type 2.
• Regardless of the base oil, FAME products are not
  unmodified oils, and will not be considered
  applicable under the exemption clause in MARPOL
  Regulation 4.1.3.
•  

47
Carriage of Biofuels BIOETHANOL

• Bioethanol is a readily available, clean fuel
  that can be utilized in combustion engines in
  different ways such as anhydrous (or dehydrated)
  ethanol which is free of water and at least 99
  percent pure.
• This ethanol can be blended with conventional
  fuel in proportions up to 85 percent (E85).
  Blends up to 20 percent can be used in modern
  engines without modification.
• Traditionally, MTBE or ethanol has been added as
  an oxygenate to gasoline at 6-10 blend for a
  cleaner burn. As the use of MTBE has been banned
  by a growing number of states, the US ethanol
  market has grown from 2.3 to 4 billion gallons in
  the last three years.

48
Carriage of Bio-Fuels BIOETHANOL

• Higher blends require modified engines that run
  as flexible fuel vehicles (FFVs). There are
  currently over a million FFVs on the road in the
  US with an increasing number added each year, and
  there are a small but growing number of E85 gas
  stations, primarily in the Midwest.
• Bioethanol is also used to manufacture ETBE
  (ethyl-tertiary-butyl-ether), a fuel additive for
  conventional petrol.

49
Carriage of Biofuels BIOETHANOL

• Because ethanol is a great solvent and pulls in
  water, it is typically not mixed with gasoline
  prior to being shipped via pipeline. 
• In the US most the blends are shipped
  separately the gasoline is transported via
  pipeline and the ethanol is sent by
  truck/rail/barge for blending at the distribution
  point.  
• In the US, for example in the state of New York,
  which uses a 10 ethanol blend, a terminal south
  of Albany receives 100 ethanol by barge and
  mixes it with gasoline from a pipeline. 

50
Carriage of Biofuels BIOETHANOL

• The US Congress has recently passed a Renewable
  Fuel Standard (RFS) that requires a minimum
  percent of liquid fuels be from renewable
  sources.
• At current gasoline prices there is an economic
  incentive to blend more than the required levels
  of ethanol. 
• In markets where states have not yet banned
  MTBE, distributors are switching to ethanol
  blends for economic reasons.

51
Carriage of Biofuels How will they be
classified?

• Most bio-ethanol cargoes (and some biodiesels)
  containing any blend containing 85 or more of a
  mineral diesel oil or gasoline qualify as Annex I
  product.
• The issue of the carriage of bio-fuels will
  become more prevalent as more of this product is
  shipped.
• Classification of these products needs to be
  discussed in greater detail and resolved to
  ensure the trade can continue after 1 January
  2007.  
•  

52
Carriage of Biofuels Proposals

• A proposal has been made to the IMO that will
  act as an interim measure in classifying the
  expanse of biofuels out there.
• This focuses on both bioethanol and biodiesels
  (most likely FAME products)

53
IMO and the 2006 Schedule

• There are many loose ends that need to be
  tended to before December 31, 2006 IMO has three
  meetings scheduled for 2006 where these matters
  can be discussed
• MEPC 54 March 2006
• BLG 10 April 2006
• MEPC 55 October 2006

54
Predictions /Conclusions

• The MARPOL Annex II Revisions have been in the
  works for decades and they will take effect 1
  January 2007. That is a safe prediction.
• The implementation of these regulations will
  require action by all stakeholders including the
  tanker industry, IMO member states, product
  manufacturers, shippers, class societies, etc.

55
Predictions /Conclusions

• INTERTANKO will continue to be closely involved
  to ensure that the transition is as smooth as
  possible for industry.
• The only other possible prediction to be made at
  this time is..

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