Meeting in London on March 26, 2010, the International Maritime
Organization's Marine Environment Protection Committee amended
the MARPOL Convention to formally establish a North American
Emission Control Area ("ECA"), in which emissions of
sulfur oxides ("SOx"), nitrogen oxides ("NOx")
and particulate matter from ships will be subject to more stringent
controls than the limits that apply globally. Development of the
ECA (and other related maritime air-pollution regulation) was first
covered in our August 31, 2009 Alert,
"Highlights from IMO's Marine Environment Protection
Committee Meetings - July 2009".
Implementation of the ECA means that, beginning in 2012, ships will need to use compliant fuel for the duration of their voyage within the designated area (generally, 200 miles from the coasts of Canada and the United States, including the Hawaiian Islands). This includes time in port and voyages whose routes pass through the area without calling on a port.
The requirements for compliant fuel will change over time. From the effective date in 2012 until 2015, the fuel used by vessels operating within the ECA must not contain more than 1.0 percent sulfur (10,000 ppm). Beginning in 2015, it must not contain more than 0.1 percent sulfur (1,000 ppm). As an alternative to using lower-sulfur fuel, ship operators can choose to equip their vessels with exhaust-gas cleaning devices (also called "scrubbers"). Beginning in 2016, NOx aftertreatment requirements will also become applicable.
The new rules apply to Category 3 marine engines, including those with cylinder displacement greater than 30 liters. This category generally includes oil tankers, cruise ships, and container ships. The use of compliant fuel is expected to reduce particulate matter emissions by 85 percent by 2015, and nitrogen oxide emissions by 80 percent by 2016.
The U.S. EPA continues to investigate whether other areas of the United States and its territories may be subject to an ECA designation. The areas currently being examined include the U.S. territories of Puerto Rico and the U.S. Virgin Islands.
O'Melveny & Myers LLP routinely provides advice to clients on complex transactions in which these issues may arise, including finance, mergers and acquisitions, and licensing arrangements. If you have any questions about the operation of the applicable statutory provisions or the case law interpreting these provisions, please contact any of the attorneys listed on this alert.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.