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Navigating Regulatory Changes

Impacts on the African Bunker Market

By: Dr. Awwal Bamanga

Name: Awwal Bamanga (PhD-Environmental Sciences & Sediment Geochemistry, University of Portsmouth, United Kingdom)

Department: Marine Environment Management Department NIMASA

Professional Affiliations:

• Associate member, Institute of Marine Engineering, Science and Technology (AMIMarEST)
• Registered Environmental Specialist (RES) with the National Registry of Environmental Professionals (NREP USA)
• Associate Member, Nigerian Institute of Safety Professionals (NISP)
• Member, Nigerian Environmental Society (NES)
• Published several works in peer-reviewed journals

Working Experience:

Acquired over Twenty  (20) years of working experience as a pollution prevention, control, and management officer within the maritime industry.

• Introduction
• Bunkering in shipping
• Regulatory changes
• Alternative source of energy
• Mode of operation
• Recommendations/Implementation strategies
• Conclusion

Bunker fuel used in ships contributes to greenhouse gas emissions, prompting the international maritime organization (IMO) to introduce regulations aimed at reducing environmental impact through improved fuel efficiency and cleaner technologies in line with the SDG 13.

Are there needs for bunkering in the shipping industry?

If yes, then what are the benefits?

Benefits Of Bunkering In Shipping

• Sustaining Vessel Operations
• Cost Efficiency
• Compliance with Regulations
• Maximizing Operational Uptime
• Optimal Propulsion and Performance
• Flexibility in Fuel Types
• Emergency Resupply
• Supporting Ports and Local Economies

Legal Framework

• MARPOL 73/78  Annex VI Prevention of  Air Pollution from Ships (entered into force 19 May 2005)
• Article 212 of the 1982 UNCLOS titled “Pollution from and through the atmosphere” addresses this source of marine pollution.
• European Eco-Management and Auditing Scheme (EMAS) or the ISO 14001 EMS.
• Sets limits on Sulphur oxide and nitrogen oxide emissions from ship exhausts.
• Designated emission control areas (ECA) set more stringent standards for SOx, NOx and particulate matter.

Regulatory Changes

This involves the regulatory landscape of 2023, The bunker industry grapples with new regulations like CII, the EU ETS expansion to shipping, fourth coming IMO revised GHG strategy.

The implications of these changes on the global and African bunker markets will provide insights into compliance and sustainability strategies in the face of new regulatory challenges

Regulatory Changes And Its Impacts On The African Bunker Market

• Emergence of Emission Control Areas (ECAs)
• Energy Efficiency Existing Ship Index (EEXI) and Carbon Intensity Indicator (CII)
• Impact of COVID-19 Pandemic
• Competitive Landscape Shifts
• Future IMO GHG Reduction Goals
• Need For Infrastructure Development

REGULATORY CHANGES AND ITS IMPACTS ON THE AFRICAN BUNKER MARKET

Source:

IMO 2020 – cleaner shipping for cleaner air

• IMO 2020 Sulphur Cap
• Emergence of Emission Control Areas (ECAs)
• Energy Efficiency Existing Ship Index (EEXI) and Carbon Intensity Indicator (CII)
• Impact of COVID-19 Pandemic
• Future IMO GHG Reduction Goals
• Need for Infrastructure Development
• Competitive Landscape Shifts

The International Maritime Organization’s (IMO) 2020 Sulphur Cap mandates a maximum sulphur content of 0.50% in marine fuels, significantly lower than the previous limit of 3.50%.

Impact on African Bunker Market:

• African ports experienced an adjustment period to ensure the availability of compliant low-sulphur fuels.
• Bunker suppliers needed to adapt to the new fuel requirements, leading to changes in procurement and supply chain dynamics.
• Price differentials between high-sulfur and low-sulfur fuels influenced purchasing decisions and affected bunker fuel economics.

Purpose For Alternative Source Of Energy

• National and International institutions and organizations,  especially International Maritime Organization (IMO), put into effect  comprehensive regulations in order to reduce ship-related emissions.
• For this purpose, IMO has acted to reduce ship-related NOx and SOx emissions by establishing emission control areas (ECAs) in various regions around the world.
• The Initial IMO Strategy on Reduction of greenhouse gas (GHG) Emissions from Ships, published in 2018, outlines IMO’s short, medium and long-term goals.
• These goals have been determined in accordance with the United Nation’s (UN’s) Sustainable Development Goals (SDGs) and the UN’s 2030 Agenda for Sustainable Development, and within the scope of “urgent measures for climate change and its effects” in article 13 of this agenda, it is aimed to reduce ship-related CO2 emissions by 40% by 2030 and by 70% by 2050.

Alternative Source Of Energy For Bunker Market

• The use of nuclear-powered (NP) will increase once safety concerns are sufficiently addressed, considering the future restriction of fossil-based fuels in transportation particularly in the maritime sector.
• Nuclear-powered vessels (NPVs) especially on merchant type are also considered as alternatives, in addition to the environmental economic benefits of renewable energies, biofuels that produced biologically from manure and waste of animals and food by anaerobic digestion and some fossil-based fuels such as natural gas.

Mode Of Operation

• A nuclear machine converts the heat energy obtained from fission atoms of radioactive materials such as uranium, into mechanical energy for turning the propeller.
• The nuclear propulsion systems (NPSs) has been successful especially on military ships and icebreakers. Nuclear reactors use uranium, plutonium, thorium and mixed fuel (MOX) that contain both of them.

Types Of Reactor On Nuclear Energy

• The fundamental types of fuels, which are uranium-zirconium, uranium-aluminum, and metal ceramic, used in nuclear reactor have high specific energy.
• Main types of NPPs;
  1. Boiling Water Reactor (BWR),
  2. Fast Neutron Reactor (FNR),
  3. Gas-Cooled Reactor (GCR),
  4. Light Water-Cooled Graphite-Moderated Reactor (LWGR),
  5. Pressurized Heavy-Water Reactor (PHWR) and
  6. Pressurized Water Reactor (PWR)

Table 2: Summary Criteria For Integrated Evaluation Of Alternative

Marine Fuels.

Alternative fuels contain some additional but manageable hazards compared to conventional fuels. Hence, there are some serious uncertainties in the use and wide acceptance of alternative fuels. The strengths and weaknesses of fuels as a summary of the compiled data:

• • Environment/Emissions: Operation emissions
  • Environment/LCA: Life cycle emissions
  • Environment/Health: Impacts on human health
  • Cost/Production: Cost of fuel production
  • Cost/CAPEX: Investment cost of fuel system
  • Cost/OPEX: Cost of operation
  • Technical/Infrastructure: Production, distribution, and bunkering infrastructure
  • Technical/Technological Maturity: Availability of fuel
  • Technical/Shipping: Usage constraints and advantages on ships
  • Social/Safety: Safety issues during storage and operation
  • Social/Legislations: Compliance of the fuel with current and potential regulations

Table 4: Strategies For Compliance With IMO Regulatory Laws

Proposed recommendations/Implementation Strategies

• Commencement of accessing available international greener funds such as world bank, IMF etc.
• Setting aside funds for research and development for the purpose of generating primary and secondary data.
• Investment in building infrastructure that will aid reduction for the green house gas emission through private public partnership (PPP) approach.
• Collaboration with other relevant private or public organization.
• Encouraging capacity building for the personnel in the industry.
• Establishment of accredited marine pollution laboratories for Sulphur contents monitoring.

Conclusion

• Regulatory changes in the shipping industry, driven by environmental concerns and sustainability goals, have led to significant impacts on the African bunker market. The market has witnessed shifts in demand, supply dynamics, and infrastructure investments as stakeholders strive to meet evolving compliance requirements and contribute to a greener maritime future.
• There are many different technological developments for reducing shipping emissions, alternative fuels are recognized as the most important solution in the short, medium and long term. The use of these fuels will significantly reduce the emissions produced by ships during port operations as well as the emissions they release into the atmosphere during operation.