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China establishes three domestic emission control areas and announces a gradual strengthening of requirements concerning emissions of air pollutants from ships. A new regulation will take effect on 1 January 2017 although key ports can impose the requirements as early as 1 January 2016.

This Alert has been replaced by our Alert of 26 August 2016 – http://www.gard.no/go/target/21736671/

 

In September 2015, China's Ministry of Transport released its Ship and Port Pollution Prevention Special Action Plan (2015-2020), a five-year scheme that aims to reduce sulphur and nitrogen oxide emissions by up to 65 per cent in some of China’s major ports. A recently issued Chinese regulation that designates the Pearl River Delta, Yangtze River Delta and Bohai-rim Waters as domestic “emission control areas” (ECAs), and places a cap on the sulphur content of fuel oil in the ECAs at 0.50 per cent, is considered an important step to achieve this goal.

 

Key facts about the new Chinese regulation

1)       The regulation applies to all ships navigating, anchoring and operating in the ECAs with the exception of military ships, fishing boats and ships/boats used for sporting purposes.

2)       Eleven ports within the ECAs are designated “key ports”:

  • Shenzhen, Guangzhou and Zhuhai in the Pearl River Delta
  • Shanghai, Ningbo-Zhoushan, Suzhou and Nantong in the Yangtze River Delta
  • Tianjin, Qinhuangdao, Tangshan and Huanghua in the Bohai-rim Waters

3)       From 1 January 2017 ships calling at the eleven key ports must use fuel with a sulphur content not exceeding 0.50 per cent whilst berthed. Ships must switch to compliant fuel within one hour of arriving at their berth and burn compliant fuel until not more than one hour prior to departure. From 1 January 2018 the requirement will be extended to all ports in the ECAs.

4)       The eleven key ports can enforce the new requirements as early as 1 January 2016. However, our information suggests that the majority of the ports will not enforce stricter requirements during 2016, with the potential exceptions of Shanghai and Shenzhen. In the meantime, ships entering Chinese waters must continue to comply with MARPOL Annex VI Regulation 14, which places a current global cap on the sulphur content of fuel oil at 3.50 per cent.

5)       From 1 January 2019 ships must use fuel with a sulphur content not exceeding 0.50 per cent while operating within the ECAs. Any fuel change-over operation should be completed prior to the entry into or commenced after exit from an ECA.

6)       We understand the Chinese authorities will also accept alternative compliance methods that are at least as effective in terms of emissions reductions, e.g. use of shore power, scrubbers for exhaust gas cleaning and clean fuel (LNG).

7)       The Chinese authorities provide no formal guidance as to how the requirements will be implemented and enforced. Although the three regions are designated domestic ”ECAs” there is no direct link between the regulations and MARPOL Annex VI requirements for ECAs.

8)       The current regulation applies to emissions of sulphur oxides only and there are no requirements covering the emissions of nitrogen oxides at this stage.

9)       At the end of 2019, the Chinese government will determine if stricter fuel quality requirements should be imposed in future. Under consideration is a further reduction of the sulphur limit to 0.10 per cent.

Circular No. PNI1510 published by Gard’s correspondent Huatai Insurance Agency & Consultant Service Ltd. on 11 December 2015 provides additional information about the new regulation and details, including maps, of the geographical boundaries of the three designated ECAs.

Recommendations

Members and clients are advised to note the above and instruct vessels calling at Chinese ports accordingly. Bunkering strategies and change-over procedures should be revisited to ensure compliance with the new requirements. As some of the key ports may enforce stricter requirements as early as 1 January 2016, we recommend clarifying port requirements with the agent or port authorities well before arrival.

Members and clients should expect enhanced inspections in ECA ports and are recommended to:

  • Record dates and times of the vessel’s arrival and departure, and of the commencement and completion of fuel change-over operations as soon as practicable after each occurrence and keep such records onboard readily available for inspection.
  • Ensure that the quality of fuel purchased can be documented, e.g. by obtaining and retaining onboard bunker delivery notes (BDNs) and representative samples of the low sulphur fuel oil delivered.

Similar requirements entered into force in Hong Kong on 1 July 2015, see Gard Alert from 23 March 2015.

 

We are grateful to Huatai Insurance Agency & Consultant Service Ltd. and to the law firm Hai Tong & Partners for providing this information.