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Predictions over potential engine damage and litigation between owners and charterers relating to the use of very low sulphur fuel oils have not materialised – but challenges remain, says the P&I Club.

This week Gard published a report on the IMO 2020 transition based on the claims and inquiries from its members and clients, as well questions posed during a series of webinars hosted by the Club which focused on upon technical, contractual, insurance and enforcement issues related to IMO 2020.

The Club notes that there have been ‘significant variances’ in the composition of residual very low sulphur fuel oils (VLSFOs). These fuels have been found to be off-spec on a number of ISO 8217 parameters, such as aluminium plus silicon (catalytic fines), pour point and acid number.

The most commonly experienced problems with fuel reported to Gard were high total sediment potential (TSP) and a marginal exceedance of the 0.50% sulphur limit.

Onboard operational problems in using VLSFOs centred on an increase in sludge formation in purifiers and filters, but Gard notes that: ‘So far these have not led to a high frequency of major breakdowns or engine damage cases.

‘This could be because the crew were either able to manage these fuels or they were de-bunkered.’

According to Gard’s data for fuel related machinery damage claims, the first six months of 2020 saw fewer claims than the same period in 2018 and 2019. The Club highlights that this data ‘only captures incidents where there was damage to machinery and the repair costs were above the deductible, so it does not take into account purely operational problems faced by crew’.

The Club also notes that the number of case files opened this year on contractual bunker disputes is similar to previous years. As such, ‘from Gard’s perspective, the more dire predictions regarding potential engine damage, and a deluge of litigation between owners and charterers have not materialized, at least in this first six-month period.

However, based on questions submitted by its members, the Club does acknowledge that IMO 2020 has thrown up a number of challenges.

Gard’s full report detailing its responses to questions on VLSFOs can be accessed here

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