Bunker Delivery Notes (BDNs): Thinking Outside the Box

01 January 2019 is the date by which all bunker suppliers and their customers subject to MARPOL Annex VI must use new bunker delivery notes (BDN). The new BDN raises a number of issues that suppliers and traders would do well to address.

Bunker suppliers and traders must appreciate that they increasingly will be a focus of MARPOL Annex VI enforcement. The new BDN requirements are a part of that.

Now a declaration must be signed and certified by the fuel oil supplier’s representative that the fuel oil supplied is in conformity with regulation 18.3 of [MARPOL Annex VI] and that the sulphur content of the fuel oil supplied does not exceed certain limited values.

The main purpose of the amendment is to provide for use of fuel otherwise non-conforming under MARPOL Regulation 14.

Bunker suppliers can, within the requirements given make their own form and suppliers must consider now what form to adopt.

The International Bunker Industry Association highlighted a few new BDN requirement shortcomings, such as when the buyer is unable to find compliant fuel, the non-accommodation for reporting use of 0.5% fuel before the 2020 requirement beginning, and most importantly, the third ‘tick box’ was contrary to what always had been required on BDNs before with the understanding that fuel choice was entirely the customer’s, not the supplier’s.

The BDN, then mostly called a ‘bunker delivery receipt’, had a simple function before MARPOL Annex VI entered into force in May 2005 as simply a receipt. But, beginning in 2005, bunker suppliers, through something which had before only been a ‘receipt’, became part of the international marine pollution enforcement scheme, focused on fuel sulphur content and emissions and MARPOL VI, Regulation 18 requires details of fuel oil combustion.

2020 speculation includes that much 0.5% compliance will be through blends, and that many blends will be unstable. Overall, if the person signing has no idea what the regulations say, then how could she or he truthfully certify compliance to them?

Suppliers also should implement the following:

First, train your ‘authorized representatives’ now on what they are signing and certifying to and make sure the product you are delivering actually conforms to that certification.

Second, make sure you have in place reliable and accurate ways to receive, record and then preserve a record of ‘purchasers’ reports.

Third, if a trader is your counterparty, you should assure that the trader also certifies to you that it accurately has related ‘specified values’ and ‘intention’ to you.

Fourth, return to your sales terms and conditions. Make sure that you are effectively incorporating them into every transaction.

Fifth, consider now whether to adopt a digitized bunker delivery note system, which would incorporate all of the above considerations and enable you to avoid the expense of printing thousands of new paper BDN forms.

The 2019 BDN requirements also require action now.

IBIA emphasizes that its ‘guidelines are generalizations’, that ‘suppliers will need to adapt them to their particular needs’ and mights ‘consult with their national authorities about what is expected’.

Be prepared, be precise, and understand the important BDN changes to remain compliant.

Further on recommendations about BDN requirements, access the article at the link here.