Advisory

Tuesday, 02 December 2014

Low Sulfur Fuel Charge (LSF) - Effective January 2015


Dear Valued Customer,

As a global shipping company with operations around the world, MOL Liner is committed to comply with the international environment regulations in order to maintain our environment sustainability. 

 

From January 2015, MOL Liner will engage in full compliance in the implementation of new Low Sulfur Fuel Policy set by the International Maritime Organization (IMO) in which the new policy requires every ship operating within the Emission Control Areas (ECAs) to use fuel with a maximum allowed sulfur content of 0.1% (current limit: 1.0%).

 

Emission Control Areas (ECA)

Currently, ECAs exist in North Europe (including the Baltic Sea, North Sea and English Channel) and North America (both East and West Coast) and the Caribbean Sea.

 

 Environmental Impact

Sulfur Dioxide (Sox) emissions are toxic and cause respiratory implications as well as acid rain. Under the low sulfur fuel policy, SOx from ships will be reduced in the ECA areas, which will have significant positive effects on the environment and on health in general. The carbon footprint will also be reduced from the container shipments. 

MOL Low Sulfur Fuel Charges levels on major trade lanes (*1)

Trades (All directions)

Surcharge Per TEU (*2)

Trans Pacific & Americas

 

Asia - North America

Included into MOL BAF (*3)

Middle East & India subcontinent - North America

Included into MOL BAF (*3)

Australia & New Zealand – North America

Included into MOL BAF (*3)

South America – North America

Included into MOL BAF (*3)

Asia Europe

 

Asia - North Europe

US$25

Middle East & India subcontinent - North Europe

US$25

Australia & New Zealand - North Europe

US$25

East and West Med - North Europe

US$25

Trans Atlantic

 

North Europe - North America East coast

US$65

North Europe - Canada US$65

North America East coast – South Africa

US$95

North America East coast – West Africa

US$120

North Europe - South Africa

US$30

North Europe - West Africa

US$55

Out ports  (To be added on top of above Asia
Europe
trade and Trans Atlantic trade main leg):

 

Scandinavia, Baltic countries & Russia

US$60

Atlantic Spain & Portugal

US$70

Ireland

US$70

U.K. (Grangemouth / Immingham / Belfast / Teesport / South Shields and Greenock)

US$70

(*1) Other trade lanes not shown on the above table are subject to inquiry or please visit our website www.molpower.com (Tariff page).

(*2) Above charges are per TEU (20 foot equivalent units) and will be applied equally to dry and reefer containers as well as trade direction.

 

(*3) MOL BAF (Bunker Adjustment Factor) formula does already include low sulfur fuel portion in it. The Q1 2015 BAF shall be announced by the end of November 2014 that includes new low sulfur charge effective January 2015. Please visit www.molpower.com (Tariff page) for further details.

Frequently Asked Questions (FAQs)

1. ECAs zone definition
Today’s IMO definition of ECAs includes the Baltic Sea, North Sea, North America (West Coast and East Coast), Hawaii, and US Caribbean Sea areas.

 

The North American ECAs zone includes waters adjacent to the Pacific coast, the Atlantic/Gulf coast and the eight main Hawaiian Islands. It extends up to 200 nautical miles from coasts of the United States, Canada and the French territories, except that it does not extend into marine areas subject to the sovereignty or jurisdiction of other States.

 

The Europe ECAs zone includes the North Sea and the Baltic Sea, which are North Sea southwards of the latitude 62° N and eastwards of longitude 4° W; Skagerrak, the southern limit of which is determined east of the Skaw by latitude 57° 44.8' N; and the English Channel and its approaches eastwards of longitude 5° W and northwards of latitude 48°30' N.

 

2. Vessel sulfur content monitoring party in ECAs

The IMO and approved 3rd parties will monitor the sulfur content of vessels operating within the ECAs zone and would assess penalties to carriers not adhering to the regulations.

 

3. The impacted Trades

Based on current scope defined by IMO, Transpacific, Asia Europe (excluding Mediterranean), Trans-Atlantic, North America / South America, North America / Central America, and Hawaii trades are impacted. Cargo transported on trades from/to ECAs will be affected by the low sulfur fuel charge while cargo transported in other parts of the world will not be affected.

 

4. European Union, United States and Canadian government positions on the new cost regulation

The European Union established an EU Directive 2012/33/EU amending Directive 1999/32/EC. The amended Sulfur Directive will be enforced as from 1 January 2015 in the North Sea and Baltic ECA. The revision directive was an instigation to bring EU regulations in line with current IMO regulations for sulfur emissions from ships under MARPOL Annex VI. In U.S.A., the US EPA issued Regulatory Announcement under EPA-420-F-09-068 in December 2009 confirming the United States intention to implement the MARPOL treaty. In Canada, "The Regulations Amending the Vessel Pollution and Dangerous Chemicals Regulations (the Amendments)" was published on Part II of the Canada Gazette on 8th of May 2013.

 

5.  ECAs reference and information source

The International Maritime Organization provides extensive background information on the new low sulfur fuel policy and ECAs at their website: www.IMO.org

 

As a valuable customer, we ask your full support and cooperation for the improvement of cleaner air and environmental initiatives.

 

 

Sincerely,

 

 

MOL Liner Ltd.