LexisNexis

Sulphur content in bunker fuel: case analysis

Tuesday 14 June 2022

Camilla Søgaard Hudson

Bech-Bruun Law Firm, Copenhagen

Johannes Grove Nielsen

Bech-Bruun Law Firm, Copenhagen

   

Regulation of sulphur content in bunker fuel

Just over two years ago, a new limit on the sulphur content in bunker fuel came into force.

The rules containing this limit are often referred to as the IMO 2020, and they limit the permissible sulphur content in bunker fuel to 0.5 per cent outside emissions control areas (ECAs). But since 1 January 2015, the permissible sulphur content in bunker fuel within ECAs has been limited to 0.1 per cent.

The North Sea area, which includes Danish waters, is one of the ECAs established under MARPOL Annex VI, meaning that the maximum level of sulphur allowed to be burned when entering the North Sea area is 0.1 per cent.

Under Danish law, the person or corporation violating the sulphur limit is punished with a fine. The amount of the fine depends on the sulphur content in the bunker fuel. As guidance, the Danish Environmental Protection Agency has suggested the following fines:

Sulphur content

Fine

0.12 – 0.14 per cent

DKK 30,000

0.15 – 0.19 per cent

DKK 50,000

0.20 – 0.49 per cent

DKK 75,000

0.50 – 0.99 per cent

DKK 200,000

1.00 per cent <

DKK 300,000

In addition to the fine, the Danish Environmental Protection Agency may choose to publish names of shipping companies which violate the rules on sulphur emissions. Many ship owners find this quite violating and potentially worse than the economic fine.

The charge

In the summer of 2018, a vessel owned by a major shipping company was selected for Danish port state control. During the control, three samples were taken to examine the sulphur content in the vessel’s bunker fuel.

Two of the samples were analysed by two different Nordic analysis institutes on behalf of the Danish Environmental Protection Agency. The third sample was stored on          board the vessel in accordance with regular procedure.

The two samples analysed by the two different Nordic analysis institutes showed sulphur levels of 0.59 per cent and 0.77 per cent, respectively, relative to the maximum level allowed of 0.10 per cent. On this basis, the Danish Environmental Protection Agency reported the shipping company to the Danish police for having violated the Danish equivalent to the EU Sulphur Directive.

Bech-Bruun represented the shipping company, which pleaded not guilty. Throughout the course of the case, the shipping company maintained that the reason for the high levels of sulphur was the fact that the oil sample by mistake had been taken from the vessel’s lubricating oil and not the vessel’s bunker fuel.

The evidence

To substantiate the shipping company’s explanation, Bech-Bruun had to prove that the samples taken did in fact contain lubricating oil and not bunker fuel.

Naturally, this could be rendered probable by presenting the bunker delivery notes, all of which showed levels of sulphur less than 0.10 per cent.

However, against the test results showing a very high sulphur content, this was not sufficient. Consequently, we wanted to conduct further tests on the samples taken. Unfortunately, the two samples that had been analysed had been destroyed by the analysis institute.

Therefore, Bech-Bruun asked the court for permission to conduct a test on the sample stored on the vessel. This, however, was rejected by the court, citing that it would have to await the evidence at the oral hearing during which a decision would then be taken on the matter. This was not a very pragmatic approach as it would then be too late to test unless the results should only be available on appeal.

Meanwhile, we considered it crucial to the shipowner’s acquittal that the sample was tested before the oral hearing. In collaboration with the shipping company, Bech-Bruun therefore had the sample analysed by a professional institute without the court’s permission. While conducting the analysis, it was essential that all the work was carefully documented to ensure that no doubt could be raised on the validity of the analysis results.

The analysis showed that it was lubricating oil and not bunker fuel. This was ascertained by the colour, the viscosity and the sulphur content of the oil sample, among other things.

The acquittal

During the oral hearing, the specialist who conducted the test testified before the court. The result of the test was also substantiated by another independent expert in the field, who explained before the court that the sample could not possibly have been taken of the bunker fuel given the levels of sulphur and calcium in the sample. We also brought forward the chief engineer employed on the vessel as a witness, and he explained that after repeated and adamant instructions from the Danish Maritime Authority, he had taken the sample from the lubricating oil and not from the bunker fuel filter.

The court decided that the evidence of the case had given rise to reasonable doubt as to whether the samples stemmed from the vessel’s bunker fuel, and that it could not be ruled out that the samples had been taken from the vessel’s lubricating oil due to miscommunication between the Danish Maritime Authority and the chief engineer. The court therefore acquitted the shipping company.

Bech-Bruun’s comments

The acquittal of the shipping company and the case in general are extraordinary as – to the best of our knowledge – it is one of the first cases in Denmark concerning an alleged violation of the rules on sulphur limits in bunker fuel in which a verdict is handed down by the court.

The rules on sulphur content became effective in 2015. From 2015 to 2020, 36 shipping companies have been reported to the police by the Danish Environmental Protection Agency. In 17 of these cases, the shipping companies have agreed to be fined summarily.

In this case, it was obviously very important for the shipping company to be acquitted as the shipping company had not violated the rules. Also, this was particularly true as, in Denmark, there is as mentioned above a legal basis for – and thus a risk of – the Danish Environmental Protection Agency publishing the names of the shipping companies that violate the rules on sulphur emissions.

The shipping company wanted to avoid such a publication in any circumstances, which to this large shipping company would have been much worse than the economic fine itself, should the matter not have resulted in an acquittal.