Danske Bank: ECA Rule-Breakers Risk Loans Being Cancelled

Danske Bank said it'll take severe action against noncompliance.

Danske Bank today said carriers who fail to comply with Emissions Control Area (ECA) rules risk having their loans canceled, Shipping Watch reports.

"In our lending agreements we always have requirements stating that all rules, environmental regulations and laws must be respected. So we'll always have the option of canceling a loan if they break the rules," said Global Head of Shipping, Øivind Haraldsen.

And while ship owners are always trusted to abide by the rules, Haraldsen says the bank "will take severe action if someone fails to comply."

"This constitutes a violation of a lending agreement, and this could ultimately mean that a loan is canceled."

All vessels operating within the world's ECAs currently must use a marine fuel with a sulfur content not exceeding 1.00 percent by weight, and on January 1, 2015 that limit drops to 0.10 percent.

With most shipping companies set to use much more expensive marine gas oil (MGO) for compliance, from next year both the temptation and the financial gain from breaking the rules will be much greater.

Despite this, Danske Bank said it won't police, or be keeping a closer eye on carrier activity.

"This is not a job for the banks," Haraldsen said.

"We handle the financing, and then it's up to our customers to comply with the rules. This is a matter for the port state controllers. If we have customers who violate this, we won't be positive in terms of financing them going forward."

To help keep the new sulfer emission rules in check, simplified emission monitoring systems for scrubbers are set to be released on January 1, 2015.