13 March 2008

Our Ref.: AGO-22713/1000003

AGENDA

CHEMICAL TANKER COMMITTEE MEETING

#32

CTSCA MEETING #10

Venue:

Sheraton Panama Hotel & Convention Centre

Israel Avenue, at 77th Street,

San Francisco,

Panama City

PANAMA

Date:

09 APRIL 2008

Start: 0930hrs

End: 1630hrs (approx)

1.ANTI-TRUST/COMPETITION LAW COMPLIANCE

INTERTANKO’s Anti-Trust/Competition law Compliance StatementINTERTANKO’s policy is to be firmly committed to maintaining a fair and competitive environment in the world tanker trade, and to adhering to all applicable laws which regulate INTERTANKO’s and its members’ activities in these markets. These laws include the anti-trust/competition laws which theUnited States, the European Union and many nations of the world have adopted to preserve the free enterprise system, promote competition and protect the public from monopolistic and other restrictive trade practices. INTERTANKO’s activities will be conducted in compliance with its Anti-trust/Competition Law Guidelines.

2.MINUTES FROM THE LAST CTC MEETING

The minutes from the last meeting (CTC #31) have been approved by the committee via correspondence, and have subsequently been circulated in the INTERTANKO weekly news, placed on the INTERTANKO web site and circulated as a Chemical Bulletin. A copy of the minutes is attached to this agenda as Appendix 1.

The committee is invited to review and comment.

3.ACTION POINT STATUS FROM CTC #31

The action points arising from the last CTC (CTC #31) meeting are consolidated in tabular form in Appendix 2 to this agenda.

The committee is invited to review the action point’s status and comment.

4.REVIEW OF LAST CTSCA (CTSCA #9) MEETING MINUTES AND ACTION POINTS

The approved minutes of the last meeting of the CTSCA # 9 is included in Appendix 3 to this agenda.

The list of Action Points and their status is appended to this document in Appendix 4.

The Committee is invited to review the minutes and raise any questions or contributions they may have towards the work of the CTSCA and/or comment accordingly.

5.REVIEW OF BLG 12/ESPH

IMO's Bulk, Gas and Liquids Sub-committee (BLG-12) met and discussed the following issues:

5.1BLG 12 - INTERTANKO Submission on Line Draining:

INTERTANKO, with theunanimous agreementof the INTERTANKO Chemical Tanker Committee (CTC) and Chemical Tanker Sub-Committee (Americas) (CTSCA), made a submission to BLG 12 (document BLG 12/16/3 – Appendix 5), which was discussed at BLG 12.

The documenthighlightedour concern at theincreasing number of requests by terminals globally, for shore lines (chicksans and/or cargo hoses) to be drained back to the vessel upon completion of discharge as such practice is in contravention of MARPOL Annex II regulation 18.

Unfortunately,there was no support forthcoming for the INTERTANKO proposal - from our industry association partners or attending governments - to issue an IMO circular requesting Member States to bring to the attention of their terminals that such practice is in contravention of MARPOL Annex II regulation 18.

The predominant reason given by those who disagreed withthe INTERTANKO proposal was that it was not feltsuch practice waswidespread. As a consequence BLG 12 did not agree to issue a circular as we had proposed.

The committee is invited to discuss

5.2Evaluation of Safety and Pollution Hazards

The IMO Working Group on the Evaluation of Safety and Pollution Hazards held during the Twelfth Session of the Bulk Liquids and Gases (BLG 12) in London from 4-8 February 2008.

Areas discussed during ESPH included:

5.2.1The Evaluation of New Products

Only two new products were reviewed. One product, ethoxylated tallow amine (>95%), which was originally submitted by Singapore to ESPH 13, was resubmitted for inclusion in List 5 of the next MEPC.2 Circular: the product was approved.

The other submission by the USA was withdrawn and will be resubmitted to ESPH 14.The recommended classifications and carriage requirements for ethoxylated tallow amine (>95%) are set out at Annex 1 of the ESPH Final Report (the final ESPH report will be included in the INTERTANKO Weekly News as soon as it is available).

5.2.2Evaluation of Cleaning Additives

26 products were proposed for evaluation in accordance with MEPC.1/Circ 590 (the revised tank cleaning additives guidance note and reporting form). Out of the 26 proposed, 23 of the products met with the criteria outlined in the Circular (these will be listed in the final ESPH report).

5.2.3Review of the MEPC.2 Circular

Although it was customary for ESPH to consider products that have been subject to tripartite agreements and reported to the IMO for inclusion in the MEPC.2/Circ MEPC.2, because of its proximity to the 1 Jan 2007 Annex II implementation date, Circ 13 does not contain any tripartites due to expire this year. The focus of this ESPH was on the scope of MEPC.2/Circular 14.

With respect to List 1 (Pure or Technically Pure Products) it was agreed that the next circular should contain:

  • tripartites still showing an expiry date;
  • Entries having “all countries/no expiry date” but which were finalised after the adoption of the 2009 IBC Code Amendments;
  • Entries included in the 2009 IBC Code Amendments that have been changed and are reflected in their List 1 profiles.

This information, as well as any new entries, will form the basis of the draft of next MEPC.2/Circular (Circ.14)

Regarding List 2 Products (Pollutant Only Mixtures Containing at Least 99% by Weight of Components Already Assessed by IMO) there was discussion regarding the chemical names to be used for specifying in the third column of List 2 “contains”. ESPH agreed that the information in this column should always reflect the complete product name as specified in Chapters 17 and 18 of the IBC Code or Lists 1 or List 5 (Substances Not Shipped In Pure Form but as aComponent In Mixtures) of theMEPC.2/Circ. It was noted, however that there may be occasions on which usage of the complete information (in the case of a product with a long chemical name) may pose problems for shipping documentation and product data classification systems. The use of complete information ensures full compliance with the MEPC.1/Circ.512 (2006 Revised Guidelines for the Provisional Assessment of Liquid Substances).

One other issue discussed relative to List 2 of the MEPC.2/Circ was the use of the words, “mineral oil” in the “contains” column. ESPH discussed the possibility of mineral oil as a stand alone entry and its possible inclusion in List 5. The various industries affected were encouraged to submit additional data on the use and classification of mineral oil in products such as lube oil additives. If a safety concern exists for what appears to be a list 5 product, it may have to undergo a full evaluation. Representatives from industry also noted, however, that in some cases the component may have hazards but the mixture does not.

5.2.4New Date for the MEPC.2/Circ.14

On 1 January 2009 amendments to the IBC Code will take effect. If the usual MEPC.2/Circ date of 17 December were used there would be 15-day gap in which certain products moving from List 1 to the IBC Code would not have a home. The current MEPC.2/Circ remains valid and the new Circular will take effect 1 January 2009. MEPC.2/Circ.14 will still be issued on 17 December to be consistent with IMO logistical timelines.

5.2.5Review of Chapter 19 of the IBC Code

Although BLG 11 recommended a review of Chapter 19 by the ESPH, it was the decision of ESPH that this work requires specialised expertise. At ESPH delegations were encouraged to make this expertise available to the IMO. It is the hope of the Work Group that information will be provided by ESPH 14. The target completion date for this work is 2009.

5.3Consideration of the Application of the Requirements for the Carriage of Biofuels and Biofuel blends

For the purposes of this debate the ESPH has agreed to use definitions of biodiesel (100 percent FAME) and bioethanol (ethanol) found in paragraph 3 of BLG 11/10.

Based on this information and the instructions from BLG 12 on 5 February, an extended discussion led to the following action points being developed:

On board blending (as defined in the ESPH 13 report BLG 12/3 para 9.11.2 and 9.11.4) should be included in the terms of reference for the ESPH Working Group.

The boundaries of Annex I and Annex II might be an item for further consideration but will require a new work programme item to be approved by BLG.

More information is needed on all aspects of biofuels and biofuel blends. It is crucial that the industries affected by any possible carriage requirements submit information well in advance of the 1 July 2009 deadline as agreed by BLG 12.

Utilising the “interim limits" contained in the document originally proposed by the U.K., Sweden and IPTA may possibly not allow any Oil Discharge Monitoring Equipment (ODME) to function correctly. Further testing to establish ODME operational limits for the different biofuel blends is necessary.

There may be Annex I compliance issues relative to the “interim limits” reiterated in BLG 12/3 Para 9.3.2:

When declaring and shipping bio-fuels blended with base petroleum fuels, the under-mentioned products can be carried under MARPOL Annex I provided the following limits are not exceeded:

Blended bio-diesel with a maximum limit of 15% bio-diesel and 85% ordinary diesel, B15; orBlended bio-ethanol with a maximum limit of 15% bio-ethanol and 85% ordinary gasoline/petrol, E15; or Gasoline/alcohol mixtures with a maximum limit of 15% alcohol and 85% ordinary gasoline/petrol, E15;

Proposed “band 2 blends”, which are blends with more than 1%, but less than 85%, petroleum oil and which may possibly be carried as an Annex II Pollution Category X, ST2, with worst case minimum carriage requirements assigned (based on analogous products such as pygas, butylbenzene, fatty acid methyl esters) will be required to be submitted as a tripartite cargo if fixed carriage conditions are to be pursued.

Although the 1 July 2009 deadline was proposed by BLG 12, it was also noted by some delegations that a more realistic period of three years (similar to that of a tripartite) should be allowed.

The committee is invited to review and comment.

5.4Next meeting of ESPH 14

The next meeting of the ESPH Group (ESPH 14) is scheduled for 27-31 October 2008 at the IMO Headquarters in London.

The committee is invited to note.

6.INFORMATION REGARDING MARPOL ANNEX VI POST BLG12

As requested the secretariat has included a summary of the changes to Marpol Annex VI within this agenda. The issue manager is Mr. Dragos Rauta and this issue is being dealt with by the Intertanko Safety, Technical and Environmental Committee (ISTEC).

The revision of MARPOL Annex VI will be completed in 2008 in line with the following IMO process:

  • February - BLG finalised its contributions
  • April - MEPC 57 to approve the revision
  • October - MEPC 58 to adopt the revision
  • Enforcement – earliest February 2010

Decisions will be taken by two sessions of the IMO’s Marine Environmental Protection Committee (MEPC 57 & 58). This Committee will meet in March/April (MEPC 57) where approval of the revision is expected and October (MEPC 58) when amendments should be finally adopted. This would mean that amendments would be applicable from February 2010.

A full briefing is attached to this agenda as Appendix 6.

The committee is invited to review and note.

7.INERT GAS REQUIREMENT – UPDATE ON STATUS

Members will be fully aware of the previous discussions within the committee, the INTERTANKO position regarding the outfitting of Inert gas and the reports submitted to the IMO by the Inter-Industry Group (IIG), which recommended the IMO to consider amending SOLAS Chapter II-2 to provide for the application of inert gas to new oil tankers of less than 20,000 dwt and to new chemical tankers.

A summary of the history, background, documents are survey reports are available on the INTERTANKO web site at the following link:

The committee will also be aware of the outcome of discussions on this issue from the Design & Equipment Sub-committee (DE 50), and of the discussion from Fire Protection Sub-committee (FP 51). In turn, considerable debate took place at MSC 83 session regarding the outcome from DE 50 and FP 51, specifically on whether these two Sub-committees had reached the same conclusion with regard to new and existing ships.

FP 51 had agreed to first consider "measures to prevent explosions on oil and chemical tankers transporting low-flash point cargoes" and that this should be included in its work programme, in co-operation with the Bulk Liquid Gas (BLG) Sub-committee and DE Sub-committee. The FP would consider measures for new ships and, depending on the outcome, could consider appropriate measures for existing oil and chemical tankers.

MSC 83 reviewed the outcome of DE 50 and noted in the MSC 83 report the comments made by some delegations regarding:

  • Problems associated with retrofitting inert gas systems on new and existing tankers;
  • The disadvantages and advantages of the application of such systems;
  • Practical & safety implications for the operation of chemical tankers and product tankers of less than 20,000 dwt, as well as other human element issues;
  • Practical application of retrofitting smaller chemical tankers.

The MSC 83 agreed to endorse the recommendations of the FP Sub-committee (FP 51) and included in the FP Sub-committee's work programme a high priority item "Measures to prevent explosions on oil and chemical tankers transporting low flash point cargoes", with two sessions needed to complete its work in co-operation with the BLG and DE Sub-committees.

It also agreed that the FP Sub-committee should first consider measures for new ships, taking into account the different operational demands on chemical tankers and, depending upon the outcome, the FP Sub-committee could then consider appropriate measures for existing oil and chemical tankers transporting low-flash point cargoes, taking into account the comments made during the MSC discussion as outlined above.

Taking into account the advice and guidance provided by the CTC/CTSCA and the Executive Committee discussions, the current Council endorsed INTERTANKO position on the issue is as follows:

  • INTERTANKO supports the principle of applying the requirement for inert gas (IG/IGG/N2 as appropriate) to existing ships in parallel with new ships
  • INTERTANKO supports the logic of applying the requirement for inert gas on chemical carriers to the cargo(es) being carried (i.e the product rather than the ship)
  • INTERTANKO recognises the importance of the human element aspects and supports the continuation of further studies on these aspects.
  • INTERTANKOdoes recognise however that some of the smaller existing ships will face difficulties in retro-fitting inert gas generators and their corresponding power supplies, and believe that in these circumstances inert gas could be supplied from the shore-side, and that this isan option that should be further explored.

In view of the progression of the issue through IMO and subsequent debates that have arisen this has led to some questions being raised regarding our current position on this issue. The CTC/CTSCA is now requested to review the above INTERTANKO position with specific regards to the application of inert gas regulations for “NEW BUILDINGS” only at this stage, as the IMO will only consider existing ships once it has concluded upon possible revisions of the application to new buildings.

The committee is invited to consider the following points:

  • Confirm that the application of inert gas regulations to new buildings should be simplified.
  • Confirm that the “product based approach” should apply to all new oil and chemical tankers and should not be restricted to any deadweight cut off (such as product tankers above than 20,000 DWT) or cargo tank filling restriction, (such as greater than 3000m3 for chemical tankers).
  • On the basis the committee agrees to the above captioned bullet point - discuss, review and agree how the current wording for inert gas regulations regarding outfitting may be amended to ensure that such tankers are outfitted with inert gas systems as necessary.
  • Discuss and agree upon the criteria for inert gas regulations, currently this is focussed on products with a flash point of less than 60 Degrees centigrade. Should the parameters of Flash Point and the 60 Deg C limit be re-evaluated? (see comments in Appendix 11 although this paper (written by Dr Tim Gunner in 1999), relates to Bunkers the points made are appropriate to using flash point as a measure of a products flammability.
  • Discuss/review and agree upon the practical applications of retro-fitting inert gas systems of smaller new buildings including how inert gas from the shore may be utilised in such cases.
  • Discuss, review and agree how potential over pressurisation of lines may be prevented in such circumstances where IG may be supplied from the shore
  • Discuss, review and agree how to address the potential asphyxiation problems which are claimed may arise due to an extension of the current inert gas requirements.

The committee will be requested to discuss the captioned points and agree upon a revised set of wording proposing the revised INTERTANKO position. If the committee agrees that the product based approach should be applied to oil and chemical tankers, (which would be the logical approach), then the revised (proposed) INTERTANKO position, regarding the application of inert gas for new buildings will be sent for review by the INTERTANKO ISTEC committee, which meets in Istanbul on the 18th/19th April 2008 for the comments before circulation to Council for endorsement on the 21st April 2008.