North American Emission Control Area 2012

North American ECA

Effective 1st August 2012 200nm within the coast all vessels must burn fuel with no more than 1.0% sulphur

Cockett Marine Oil Group | web www.cockettgroup.com

Cockett Group ownership is subject to South African and European Competition Commission approval

Key Facts
} Will come into effect on 1st August 2012.

Emission Control Area

} Introduced by USA and Canada, later joined by France for the territories of Saint-Pierre and Miquelon. } From 1st August 2012, 200 nautical miles from the coast vessels must burn fuel with less than 1.0% sulphur content. } Includes water adjacent to the Pacific coast, the Atlantic/Gulf coasts and the Hawaiian islands but does not include enforcement in marine areas subject to the sovereignty or jurisdiction of other states (Mexico, Bahamas etc). } It is estimated that cost to ships to operate from current standards to new ECA standards will be $3.2 billion. } Operating costs project by EPA for a ship operating in a trade route with 1700 nm in the ECA will increase by 3%, which will raise the cost of transport on a 20 foot container by about $18. } Costs to reduce a ton of NOx, SOx and PM are $2,400, $1,100 and $10,000 respectively. } Value to US in health care benefits in 2020 based on 2006 is US dollars is $47 to $110 billion.

2 2

Regulations in the United States

From 1st August 2012 all ships in US ECA zone will be required to carry the following documents and certificates onboard

Emission Control Area

} International Air Pollution Prevention Certificate (IAPP Cert). } Engine International Pollution Prevention Certificate (EIAPP Cert). } The technical file of each applicable marine diesel engine. } Record book of engine parameters for each marine diesel engine. } Written procedures covering fuel oil change operations.

3 3

Regulations in Canada
From 1st August 2012 all ships in Canadian ECA zone will be required to carry the following documents and certificates onboard. } IAPP Cert including supplement } EIAPP Cert including supplement for each marine diesel engine

Emission Control Area

} The technical file of each applicable marine diesel engine. } Record book of engine parameters for each marine diesel engine.
} Must demonstrate compliance with regulation VI/13 by means of the marine diesel engine parameter check method. or } Documentation relating to the simplified measurement method. or } Documentation relating to the direst measurement and monitoring method.

} The approved method file (regulation VI/13.7) } Written step by step procedure covering fuel oil change over operations where separate fuel oils are used (specific to each ship) and methods for calculating the time necessary to ensure the fuel oil service system is fully flushed of all fuel oils exceeding the applicable sulphur content limit prior to entering the ECA. } Approved documentation relating to any installed exhaust gas cleaning systems or equivalent means to reduce SOx emissions. } Bunker delivery note and associated samples or records. } Copy of the type approved certificate of any shipboard incinerator installed on or after 1st Jan 2000 (capacity up to 1500 KW.) } Record book of ozone depleting substances if required. } The VOC management plan if required. } Any notification to the ships flag administration issued by the master or officer in charge of the bunker operation together with any available documentation relevant to non-compliant bunker delivery. 4 4

How to Avoid Non-Compliance

Factors affecting changeover } Sulphur content, HSFO V LSFO } Blend volumes } Size/number of service and settling tanks } Quantities of HSFO in settling/service tanks at time of change over } Overflow from service to settling tank } Total consumption ME/AE/Boilers } Separators flow rates } Important to know efficiency/limitations of vessels

Emission Control Area

Record Keeping, upon completion vessel must record the following information:} Volume LSFO per tank onboard } Date and time of completion } Ship position } Recommend use engine log book.

5 5

Enforcement
USGC port state control will check the ships compliance with the emission control area requirements to verify the following terms:} Ships bunker delivery receipt to verify sulphur content of the fuel oil supplied.

Emission Control Area

} MSDS of fuel oil. } Ship record of fuel oil changeover procedures prior to entering the ECA. } Record of shipboard incinerator usage. In the case that the vessel cannot comply with the ECA due to non-availability of low sulphur fuel oil during the voyage } Owners must show proof that attempts have been made to obtain low sulphur fuel oils. } USGC port control will then judge on a case by case basis if a penalty will be issued to the vessel for non-compliance of the ECA requirements. USCG Penalties } Failure to comply with the ECA will result in penalty fines of up to $25,000 per day for each violation. } Submission of false records will incur an additional $5,000 per violation as well as the fine as outlined above.

6 6

California Air Resource Board (CARB)

The following regulations apply to vessels calling at Californian ports only. All vessels calling at these ports must comply with both NA-ECA and CARB regulations which are as follows:-

Emission Control Area

} Vessel operators must ensure that they are burning low sulphur distillate fuel only within 24NM of the coast. } CARB are expecting most vessels to burn 1% HFO in the ECA and then switch to distillate fuels at the 24NM boundary. } Vessel owners could also choose to use 1% MGO or 0.5% MDO as this complies with both NAECA and CARB regulations. } Effective from 1st Jan 2014 CARB LSMGO and LSMDO must contain 0.1% sulphur or less. } From 1st Jan 2015 CARB will cease to exist as the NA-ECA will dictate that max 0.1% sulphur fuel must be used in all parts of the ECA. Failure to comply with CARB regulations will result in a penalty fine of between $1,000 and $10,000 per day per violation. E.g.:} Dojima Marine failed to comply with the regulations in 2012 and settled for $55,000 } Mol Ship Management also failed to comply in 2012 and settled for $3,750.

7 7

Future Changes

Emission Control Area

Now

1st August 2012

1st January 2014

1st January 2014

1st January 2015

CARB regulations in effect: Vessels must burn low sulphur distillates within 24NM of the Californian coast.

NA-ECA regulations in effect: Vessels must burn fuel with a maximum of 1% sulphur within 200NM of North American coastline.

CARB regulations change: From this date only LSMGO and LSMDO containing a maximum 0.1% sulphur may be burnt with 24NM of the Californian coastline

NA-ECA expands: The ECA will now encompass the waters approximately 50NM from the coast of Puerto Rico and the American Virgin Islands.

NA-ECA regulations change: Vessels must now burn maximum 0.1% sulphur within the ECA. This will mean that CARB regulations will cease to exist.

8 8

North American Emission Control Area 2012

Low Sulphur Fuel Supply in the US

Cockett Marine Oil Group | web www.cockettgroup.com

Low Sulphur Fuel Supply

Supplier Responses

Supplies

GOOD FAIR POOR

10 10

East Coast
Montreal

Quebec

Saint John

Halifax Portland Searsport

New York

Boston

Baltimore Philadelphia

Wilmington Norfolk Charleston Jacksonville Savannah Supplies expected to be fair to good with enough notice 5-7 days. Short notice may experience outages in all ports.

Supplies GOOD Port Canaveral FAIR POOR

Miami

Gulf Coast
Houston

Lake Charles

Baton Rouge Mobile

Freeport

Corpus Christi

Tampa

Brownsville Galveston Beaumont

New Orleans Supplies expected to be fair to good with enough notice 5-7 days. Short notice may experience outages in all ports.

Supplies

GOOD FAIR POOR

West Coast
Vancouver, BC

Statia Anacortes Tacoma Seattle Vancouver, WA

San Francisco Portland

Long Beach

Los Angles

Supplies

GOOD FAIR POOR

Supplies of LSFO are expected to be poor to fair with enough notice 5-7 days. Many Ports may only have 1 supplier. Most suppliers are looking to continue to supply CARB MDO or LSMGO in lieu.

Bunkers Only

USA ECA Limits

BE USA ECA READY English Channel Bunkers Only

Cockett Marine Oil Group | web www.cockettgroup.com

English Channel Bunkers Only Location

Cockett Physical Supply

Are you ready for the USA ECA August 2012? Dont worry we are !
} The place to bunker competitively, pre entry to US ECA for West bound vessels. } Be prepared and dont get caught short, make sure you have sufficient LSFO on board. Dont be forced to bunker at last stop saloons at extortionate prices. } Remember the time taken to purge the HSFO through the system and the additional days burning needed to achieve this. } Assistance available with on board storage arrangements, off take of HSFO and resupply of LSFO options. } Conveniently located just off the shipping lanes ensuring a quick stop. } Full range of products available 24-7, 365 days a year. } No draft restrictions and all types of vessel accommodated. } High standard of operation providing peace of mind and a quality service. } Endorsed by the UK MCA and Port of London Authority, full approvals to conduct deliveries. } High standard of quality product for peace of mind vessel operation.

15 15

Thank You!