Enforcement of Sulphur Regulations by the European Commission
Firm Principal Steve Simms recently explained the latest challenge of the European Commission (EC) in the enforcement of sulphur regulations on marine fuel suppliers in an article for Bunkerspot. With the anticipated imposition of the 2020 global 0.50% sulphur cap through Directive 1999/32/EC, the marine fuel industry is bracing itself for an anticipated host of regulations from the EC on fuel suppliers. The reality is that in response to the anticipated regulations and due to the expense of complying with a 0.50% standard soon, there will be more incentive for marine fuel suppliers to attempt to cheat and sell cheaper, non-compliant fuel, regardless of what they represent on a bunker delivery note. Given that the timeline for the EC’s implementation of regulations and monitoring of sulphur level compliance among marine fuel suppliers is only 36 months, there are serious concerns over whether the EC can effectively achieve the level of compliance it aspires to. In addition, the total budget is only €100,000. This means that the success of the regulations will depend upon the willingness of suppliers to police themselves and each other. While EU regulators may not have a clear picture of which suppliers are generally involved in non-compliant fuel deals, the suppliers themselves are. If suppliers put aside their differences and commit to policing the industry and informing on violators, this will ultimately reduce the cost of compliance for all suppliers. Until the incentive to cheat the system is effectively eliminated, it will remain difficult for some fuel suppliers to resist the incentives to cheat because they are aware that other suppliers are taking advantage of a bargain with non-compliant fuel.
If you are interested in reading more about the strategy of the EC in enforcing sulphur regulations against marine fuel suppliers, a full version of the article is available here. For information and advice on how the enforcement of sulphur regulations by the EC may affect your business, contact J. Stephen Simms.
