American Club Circular No. 39/14 1 DECEMBER 30, 2014 CIRCULAR NO. 39/14 TO MEMBERS OF THE ASSOCIATION Dear Member: NORTH AMERICAN ECA AND NEW FUEL SULFUR CONTENT REQUIREMENTS Members are requested to note that, on January 1, 2015, the maximum sulfur content for fuel oil utilized while a vessel is in, or transiting, the North American Emission Control Area (ECA) will be reduced to 0.1% (1,000 ppm). The United States Coast Guard (USCG) and United States Environmental Protection Agency (EPA) have announced that they will step up efforts to ensure compliance with Annex VI of MARPOL. This will include the taking of appropriate enforcement action. MARPOL Annex VI, which establishes these sulfur requirements, is implemented domestically in the US through the Act to Prevent Pollution from Ships (APPS). Accordingly, during any USCG Port State Control inspection in the US, Members should expect a detailed review of bunker delivery notes, sulfur and oil record books and other records relating to compliance with the ECA low sulfur regulations. Members should also be aware that the USCG and EPA are also developing plans for joint-boardings, which will include fuel oil sampling and on site sulfur screening. Commencing January 1, 2015, US authorities expect vessel owners and operators to comply with the new sulfur standards by using any compliant fuel that is available, even if that requires using distillate fuels or marine gas oil (MGO), where the sulfur content may be as low as 15 ppm or less. The EPA Guidance on Use of Distillate Fuel for North American ECA Compliance, November 2014 addresses this issue, and is attached as Appendix I. As soon as a Member becomes aware that its vessel will transit the North American ECA, “best efforts” must be utilized to obtain ECA compliant fuel at each and every port on the intended voyage, as needed. While there is no requirement to deviate from the intended voyage to obtain compliant fuel, US authorities do not consider changing berths or anchorages within a port to be a deviation. In the event, despite best efforts, compliant fuel is not available at any port on the intended voyage, compliant fuel must be obtained at the first US port of call (if available), prior to further transit within the ECA. The cost of procuring compliant fuel at any port on the intended voyage is not a valid basis to claim unavailability. Industry sources have indicated that compliant distillates, including MGO, are widely attainable at nearly every primary port. Accordingly, after January 1, 2015, it is expected that instances of a vessel being unable to stem compliant low sulfur fuel will be minimal, if not positively rare. If low sulfur fuel is not available, Members must extensively document their best efforts to comply. While the US authorities have not provided an exhaustive list of what evidence will suffice to show best efforts, it is recommended that all inquiries and requests regarding procurement of compliant fuel, including emails and telephone exchanges (reduced to writing), be well documented and American Club Circular No. 39/14 2 preserved. Members should also file a Fuel Oil Non-Availability Report (FONAR) when compliant fuel is unavailable. A FONAR must be filed at least 96 hours prior to entering the ECA. However, Members should file a FONAR as soon as it is known that compliance with the ECA requirements will not be possible. It is anticipated that there will be heightened scrutiny of all FONAR applications filed af