Gard: VLSFO bunker deterioration challenges

The maritime industry has seen a significant shift toward dual-fuel vessels, however, the transition has brought new bunker management challenges, particularly for Very Low Sulfur Fuel Oil (VLSFO), according to Gard Club.

Dual-fuel vessels typically operate with a choice between VLSFO and Liquefied Natural Gas (LNG), with charterers often opting for LNG due to economic incentives. This creates a scenario where VLSFO bunkers remain stored for extended periods, increasing the risk of deterioration.

The latest CIMAC 2024 guidelines reiterate that VLSFO may degrade faster than traditional High Sulfur Fuel Oil (HSFO) and recommends that consumption should happen ideally within six months, possibly even sooner for biofuels, in other words, a period significantly shorter than the two-year storage lifespan traditionally associated with HSFO.

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Responsibility for bunker management

Owners may argue that charterers’ obligation to supply on-specification fuel is a continuing duty, extending beyond the point of delivery. This interpretation is particularly relevant in dual-fuel vessels, where charterers effectively control the duration for which VLSFO remains unused.

Owners may also invoke an implied indemnity, asserting that charterers’ employment orders directly caused the fuel to degrade and any resulting damage.

Conversely, charterers may contend that their obligation is limited to supplying compliant fuel at the time of delivery. They argue that bunker care falls under the vessel’s operational management, making it the owners’ duty to monitor fuel stability and take preventive measures such as fuel testing, additive treatments, and circulation.

According to Gard, the issue of bunker deterioration in dual-fuel vessels is a growing challenge with no simple solution. While charterers often have the right to dictate fuel usage, they must recognize the practical implications of prolonged VLSFO storage and they may need to make concessions on their right to give instructions on the use of their bunkers.

Owners, on the other hand, should actively monitor fuel quality and take preventive measures to mitigate losses. Clear contractual terms, regular fuel testing, and cooperative decision-making between owners and charterers are essential to navigating this complex landscape.