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Flagrant US ECA non-compliance could see fines over $100,000 per day

Flagrant US ECA non-compliance could see fines over $100,000 per day
The US Environmental Protection Agency (EPA) has published its penalties for non-compliance with sulphur limits in the US and Caribbean Emissions Control Areas (ECAs).

The EPA memorandum outlines a $25,000 per day statutory maximum penalty per violation, per day. As well as burning high sulphur fuel, violations that can incur individual con-current penalties include failure to maintain a written procedure for fuel switching, failure to maintain a log of fuel changes, keep bunker delivery notes for three years or maintain a sample of delivered fuel oil for 12 months.

Each of those violations carries the maximum $25,000 per day fine, broken into two components, the economic benefit to the owner/operator from the violation and an added penalty for the gravity of the infraction.

Mechanism are in place so fines can be calculated “taking into account the nature, circumstances, extent, and gravity of the prohibited acts committed and, with respect to the violator, the degree of culpability, any history of prior offenses, ability to pay, and other matters as justice may require.”

Firstly the authorities will determine the economic benefit gained from breaking the rules. For fuel, that will be done by multiplying the difference in cost between compliant fuel and the non-compliant fuel used by the amount burned in US waters. For violations other than fuel use, the authorities will calculate economic benefit by considering avoided and delayed costs. Illegal competitive advantage will also be a factor in the calculations.

The second component to each fine is the gravity of the infringement, calculated for fuel violations between a minimum of $2,500 per day and a $15,000 per day maximum. Determined by the actual fuel sulphur content of the fuel used, higher penalties will be levied for higher sulphur content from $150 per tonne for burning 0.15% fuel during the 0.1% sulphur limit, up to $750 per tonne for fuels with 3.5% sulphur and over.

Gravity calculations also apply to paperwork violations, with higher fines for repeat offenders and those with larger amounts of missing data and poor organisation.

As well as raising the possibility of criminal proceedings, the degree of wilfulness and negligence by the offender can aggravate penalties by 20%. A single previous violation can increase the gravity component of the fine by 30%, while two or more prior incidents can cause a 70% increase.

SeaIntel recently revealed that in the North Sea ECA, a mid-size container ship could save six times the EUR2,000 German fine for non-compliance in a single journey by burning 1% sulphur fuel instead of the necessary 0.1% fuel.