The phased reduction of SOx emissions in ECAs continues in January 2015, now that the SOx content in fuel has been reduced to 0.1% – ten percent of the previous limits.
The new restrictions were implemented with the goal of having a beneficial effect on the environment – particularly the restrictions around SOx, which target improving the health of people, especially those living in port and coastal areas.
Now that the new restrictions are in effect, the US Environmental Protection Agency (EPA) has published its penalty policy for violations of the new standards. The policy’s goal is to take away the benefit of non-compliance, and reflect the weight of violating the new standards.
The “EPA Penalty Policy for Violations by Ships of the Sulfur in Fuel Standard and Related Provisions” was released two weeks following the lowering of the ECA sulfur cap, and it outlines methods by which the EPA will assess civil penalties for any violations of the standards.
The penalty also includes an amount more than the recovery of the economic benefit gained using non-compliant fuel, reflecting the gravity of a violation. The policy does, however, allow a certain degree of flexibility of the primary deterrence amount to take into consideration unique facets of each case (degree of negligence/willfulness, history of non-compliance, degree of cooperation, litigation risk, etc.).
According to indemnity insurer, Gard, “Both the EPA and the US Coast Guard have made it clear that they are actively enforcing the North American and US Caribbean ECA requirements and will be strengthening their efforts to ensure compliance. With the new ECA penalty policy in place, there is now clarity as to the civil penalties that might be imposed on ships that violate the US ECA requirements.”