North American ECA Comes Into Effect

Wednesday August 1, 2012

An Emission Control Area (ECA) surrounding North America comes into effect today, effectively meaning all ships operating within 200 nautical miles of the U.S. and Canada coastline must use a marine fuel with a sulfur content not exceeding 1.00% by weight.

Ship & Bunker data for July 31, 2012 shows the average price of high sulfur IFO380 across the U.S. ports of New Orleans, Houston, LA / Long Beach, and New York was $623.50 per metric tonne (pmt), and $752.50 pmt for the maximum 1.00% sulfur ECA compliant product, a premium of $129 or 20.7%.

At today's prices, that would mean a vessel burning 100 metric tonnes of fuel per day could expect to pay a premium of $12,900 per day when inside the ECA.

Failure to comply with the regulations will result in a civil penalty of up to $25,000 per day, with an additional $5,000 if false records are submitted.

The U.S. Environmental Protection Agency (EPA) and U.S. Coast Guard (USCG) will enforce the ECA regulations in U.S. waters.

Canada will not enforce the regulations with Transport Canada saying it will be "delayed by a few months" as "significant additional discussions" are required, however interim measures in place mean inspections may still take place and Marine Safety Inspectors may verbally advise the ship's Master of the pending air emissions standards.

The maritime community have been reminded by enforcing authorities and shipping groups to keep appropriate records in order to prove compliance, including fuel samples and bunker delivery notes.

Exact co-ordinates of the ECA can be found on the IMO website, with further information available on the EPA website.

The EPA estimates the overall cost of the ECA at $3.2 billion in 2020 and in that same year it estimates the monetised health-related benefits in the U.S. to be up to $110 billion.

Groups in opposition to the new regulations question the effectiveness of the ECA and say it will have a negative economic impact.

Alaska has sought to be excempt from enforcement saying it will "irreparably injure the State and Alaska's citizens and economy", while the cruise ship industry has proposed alternative ECA rules based on an emissions-averaging scheme, and the short-sea shipping sector has said use of the 0.1% sulfur fuels which will be required in the ECA 2015 have no appreciable environmental benefit beyond 50 nautical miles from the coast.