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California Looks Toward More Stringent Maritime Emissions Regulations

March 1, 2011

At a workshop held February 16, 2011, the California Air Resources Board (“ARB”) presented its latest proposals for reducing air emissions from ocean-going vessels (“OGV”). The proposed regulations, which are expected to be adopted by the ARB at its May, 2011 meeting, will require both U.S. and foreign-flagged vessels to use low sulfur fuels at greater distances from the southern California shore. Further, sulfur reductions and a change of implementation dates are planned for maritime fuels, which the ARB is hoping to harmonize with the Emissions Control Area (“ECA”) regulations on sulfur in fuel that become effective in 2015. The ARB also plans to change the penalties for noncompliance with these provisions.

The Revised 24-Mile Limit

The ARB first adopted its OGV Fuel Regulation in 2008, and began implementation in 2009. That rule required ships to use less polluting marine distillate fuels instead of heavy fuel oil within a designated area along the California coastline; generally, 24 miles from the mainland.

However, many OGVs began using a different route, moving from the traditional route through the Santa Barbara Channel, which lies within the zone covered by the fuel regulations, to a route on the south side of the Channel Islands, which is beyond the regulated zone. Because vessels using this southerly route do not have to use the cleaner marine distillate fuels, the ARB did not achieve the emissions reductions it had expected through its regulations. The ARB believes OGV operators have made this change because it is cheaper to travel the slightly longer route south of the Channel Islands than to use more costly lower sulfur distillate fuels during the inside passage.

The ARB has also expressed concern that expanded use of the route south of the Channel Islands may interfere with Naval operations, since this route traverses the U.S. Navy’s Pt. Magu Sea Range.

The ARB staff is now proposing that the clean fuel zone extend 24 nautical miles from the islands off the mainland. By moving the clean fuel zone in this way, it would include the southerly route beyond the Channel Islands and would remove the economic incentive for ships to utilize this route. In the process, the ARB intends to restore the emissions reductions it had anticipated when promulgating the original clean fuel zone regulations.

The Fuel Standards

The ARB also is attempting to harmonize its low-sulfur-fuel rules with the ECA low-sulfur requirements. The ARB proposes delaying implementation of its Phase 2 sulfur regulations (0.1% sulfur) from January 1, 2012 to January 1, 2014, to more closely coincide with the ECA’s Phase 2 requirements set to begin in 2015.

The ARB is also seeking to allow either the 2005 or 2010 versions of the ISO 8178 fuel standard to apply to its low-sulfur-fuel program. ARB notes that the 2005 version is still widely used as industry standard, while the 2010 version includes higher viscosity DMZ grade fuels and lubricity specifications for DMA, DMB and DMZ.

By providing the maritime industry with additional time, ARB hopes to lessen any near term, port-specific availability issues with 0.1% sulfur fuel. It should also provide shippers more flexibility in purchasing higher viscosity compliant distillate.

Noncompliance Fees

Finally, the ARB is proposing to change the method by which fees for noncompliance are calculated. The ARB assesses fees based on the number of port visits made by an OGV using fuel that does not comply with the applicable sulfur limits. Under the revised program, for each of the first two ports visited during one trip, the penalty will be $45,500 per port. For operators that purchase compliant fuels during their stop at a California port and use compliant fuels as soon as possible during their port visit and upon departure, the fees specified are to be halved. For purposes of assessing fees under the program, offshore anchorages made in conjunction with a port visit are not to be considered as a separate port visit. Port visits shall be cumulative for all non-compliant port visits over the life of the vessel.

The proposed noncompliance fees are as follows:

Port Visit

Per-Port Visit Fee

1st Port Visited

$45,500

2nd Port Visited

$45,500 ($91,000)*

3rd Port Visited

$91,000 ($136,500)

4th Port Visited

$136,500 ($182,000)

5th or more Port Visited

$182,000 ($227,500)


*Numbers in parentheses are the current penalty amounts.

Beginning January 1, 2012, the fee would be waived—once per vessel—during each calendar year until December 31, 2014, when the OGV acquires fuel and prior to leaving the first port visited during the voyage.

Conclusion and Next Steps

The ARB believes that changes in vessel traffic patterns are impacting anticipated emissions reductions, creating onshore air quality and public health issues. The proposed amendments are intended to restore anticipated emissions reductions and eliminate the economic incentive to go through the Pt. Magu Sea Range, south of the Channel Islands. The amendments are also intended to update certain fuel specifications and add flexibility to the noncompliance fee provisions.

The ARB anticipates completing its cost analysis and issuing a staff report in April, 2011. The ARB Board will take up the matter at its May, 2011 meeting.