Press Release: Concerns remain over the use of low-sulphur fuel, says UK P&I Club

• Global move towards using cleaner fuel, with countries forming new or reforming old regulations
• Jurisdictions are increasingly demanding the use of low-sulphur fuel in ships that berth in their ports
• Heavy penalties can be imposed on shipowners and Masters for the use of incorrect fuel

Stuart Edmonston, Loss Prevention Director, UK P&I Club comments on the increased demand for using low-sulphur fuels in shipping:

"There are increasing demands on shipowners to comply with mandates regarding the use of low-sulphur fuels in ships. The move towards using cleaner fuels supports a global drive to reducing carbon emissions, with many countries forming new or reforming old regulations.

"Shipowners need to be aware of the differing rules and costs across jurisdictions as they face significant fines for non-compliance. Hong Kong and Australia are the latest to introduce their own bespoke requirements. Low sulphur fuel (0.1% or less) will be mandatory for all cruise ships berthing in Sydney Harbour after 1 October 2015 and in all New South Wales (NSW) ports after 1 July 2016. Owners can be fined up to $44,000 and the Master up to $22,000. In Hong Kong, all ocean-going vessels (above 500 GT) are required to switch to low-sulphur fuel (or LNG/or similar approved fuels) during the periods the ship is at a berth, excluding the first and last hour of the berthing period. The sulphur content of the fuel may not exceed 0.5%.

"The requirements impose criminal sanctions against the owners (including any bareboat charterers and ship manager) and the Master. A contravention of the provisions relating to fuel use attracts a maximum fine of HK$200,000 and a maximum imprisonment of six months.

"Industry concerns include technical issues such as low viscosity, lack of lubricity, low density, etc., of the new fuels. Other issues are the higher costs of these fuels, as well as difficulties in obtaining them in some parts of the world. To avoid such problems, shipowners should consult their engine and boiler manufacturers for advice on operating with low-sulphur fuels and the need for equipment and system modifications."

For further details, please contact:

Gareth David/ Shelly Durrant/ Arran Fano/ Ed Hooper

Broadgate Mainland

+44 (0) 207 726 6111

Notes to editors

The UK P&I Club is a leading provider of P&I insurance and other services to the international shipping community. Established in 1865 the UK P&I Club insures over 225 million tonnes of owned and chartered shipping through its international offices and claims network. 'A (Stable)' rated by Standard & Poor's with free reserves and hybrid capital of $528m the UK P&I Club is renowned for its specialist skills and expertise which ensure 'best in class' underwriting, claims handling and loss prevention services.

The UK P&I Club is managed by Thomas Miller, an independent and international insurance, professional and investment services provider.

Thomas Miller

Thomas Miller is an independent and international provider of insurance, professional and investment services.

Founded in 1885, Thomas Miller's origins are in the provision of management services to mutual organisations, particularly in the international transport and professional indemnity sectors; where today they manage a large percentage of the foremost insurance mutuals. Thomas Miller also manages insurance facilities for all the self-employed barristers in England & Wales, as well as trustees of pension schemes, patent agents and housing associations.

Principal activities include:

• Management services for transport and professional indemnity insurance mutuals
• Investment and wealth management for institutions and private clients
• Professional services
• Building defects insurance