Alternative Fuels' Use, Carriage not Fully Covered Under Current Legal Framework

by Ship & Bunker News Team
Tuesday June 11, 2024

The risks from using oil-derived products as bunker fuel or as cargo are covered by two conventions, the International Convention on Civil Liability for Bunker Oil Pollution Damage (Bunkers Convention) and International Convention on Civil Liability for Oil Pollution Damage (CLC).

But the arrival of alternative marine fuels raises questions over whether the current regulatory framework offers the right protection.

And according to the marine insurers body, IUMI, it does not.

"There are safety and practical hurdles to overcome," IUMI wrote in its latest newsletter.

Ammonia, an up-and-coming alternative marine fuel, is a case in point.

"An ammonia fuel spill would not fall under the Bunkers Convention, potentially resulting in a non-uniform approach to jurisdiction and liability. Similarly, an ammonia cargo incident would not fall under the CLC."

According to IUMI, alternative fuels may require a "separate protocol to the International Convention on Liability and Compensation for Damage in Connection with the Carriage of Hazardous and Noxious Substances by Sea, a protocol to the Bunkers Convention, or a whole new convention specifically for alternative fuels".

Until these and other questions are resolved, shipping is "left with the existing international protective funds, designed to respond at the highest levels to pollution claims resulting from an oil spill, without any similar mechanism in place to respond to a spill of alternative fuels". 

To address these "legal and regulatory challenges" will require a collaborative approach from stakeholders, the article said.