Environmentally acceptable lubricants and the Vessel General Permit

By Alison Gaines

On 19 December 2013, the U.S. Environmental Protection Agency (EPA) implemented the Vessel General Permit (VGP), an update of the VGP issued in 2008. In the year since, the marine lubricants industry has had to adjust. Because of the new changes, the different players have had to learn how the rules apply to them. Various challenges ensure that the adjustment period will continue as fleets determine how they can come into compliance with the new VGP specifications.

The VGP update was implemented as part of the National Pollutant Discharge Elimination System (NPDES). It applies to any commercial vessel longer than 79 feet (24.08 metres) operating within three nautical miles of the U.S. coastline. Unlike the 2008 VGP, it mandates that these vessels use environmentally acceptable lubricants (EALs) in any application that involves an oil-to-water interface.

Furthermore, the VGP exists to regulate not accidental oil spills but the discharges that are a relatively unavoidable part of regular ship operation. In its literature on the VGP, the EPA states, “Oil leakage from stern tubes, traditionally considered a part of normal ‘operational consumption’ of oil, results in millions of litres of oil being released to the aquatic environment every year. Where the discharge can’t be eliminated, this permit condition seeks to reduce the potential environmental impact of those discharges.” This is where EALs come in.

EALs must be biodegradable, minimally toxic and non-bio-accumulative. Bioaccumulation refers to the potential for dangerous chemicals to build up inside the systems of water-dwelling organisms. It is difficult, both for oil companies and for the EPA, to estimate what percentage of the global vessel fleet travels to the U.S. each year, as this depends on trade patterns that are not always easy to predict. But as a spokesperson at Shell put it, the prominence of the U.S. in the international shipping market makes it prudent for vessels to comply with the VGP, whether or not they plan on traveling to the U.S.

A vessel must comply with the VGP unless it is “technically infeasible” to do so, a situation that may arise if the applications needing attention are below the waterline, in which case they could only be reached at dry dock (boats only go to dry dock every 2.5 to five years). According to Shell, most of the systems and applications affected by the VGP are below the waterline.

“It will take some time for operators to convert their entire fleet,” a Shell spokesperson said. “Nearly all new-build vessels are being filled with EALs,” he added.

There are additional instances of technical infeasibility that occur. Perhaps an application comes pre lubricated and has no available EAL alternative. Sometimes an EAL is not available in any port where the vessel regularly calls, or the original equipment manufacturers (OEMs), whose applications need the EALs, may not have approved the use of the EALs. According to Shell, this is the most prevalent reason why vessels claim technical infeasibility.

“The largest demand for EALs will be for application in Stern Tubes, and most of the major OEMs involved have already issued approvals for EALs. However, the OEM approval situation is not as strong for some of the other key applications covered by the 2013 VGP,” the Shell spokesperson said.

Some of these key applications include gear fluids and hydraulic fluids, so there is a lower demand for EALs for those applications.

ExxonMobil Marine released a line of environmentally acceptable hydraulic fluids, Mobil SHC Aware H, when the 2013 VGP went into effect. Iain White, ExxonMobil’s marine fuels and lubricants field marketing manager, emphasized the importance of being both VGP compliant and OEM approved.

He also shared that after the ExxonMobil EALs were released to the market, he noticed that “the industry had to go through a learning curve” in terms of which vessels actually had to comply with the VGP and which claimed that it was technically infeasible to comply.

Gianluca Marucci, marine technical services director at Castrol, noticed this learning curve as well. He said that technical infeasibility was especially prevalent when the 2013 VGP was only a few months old, but it has become less of an issue and that demand has been growing steadily, at least among Castrol’s customers. Although the numbers for this demand growth are commercially sensitive, Marucci said, “in the last 16 months, probably, we have switched a lot of customers from the traditional products” to the EAL products, called the Castrol BioRange products.

Marucci added, “Even OEMs understand that technical infeasibility is something that can be played in the short term but not the long term.” Marucci also said that vessels caught violating the VGP would get fined, but more importantly for many operators, it is a reputation issue. The reputation of being environmentally friendly is important to operators, Marucci said, and another motivation for vessels to switch to EALs.

The EPA reported that the 2013 changeover has gone well. According to the agency, more than 50,000 electronic Notices of Intent have been filed. At the time of this writing, the EPA did not report an exact figure of how many vessels have claimed technical infeasibility. According to the agency, however, the Annual Reports for calendar year 2014 are due on 28 Feb. 2015. After analysing this data, it will have a better sense for how many vessels are complying.

From White’s perspective, the changeover between the 2008 and 2013 versions of the VGP was not the easiest. According to White, the EPA did not release the specifications for biodegradability, toxicity and bioaccumulation until March 2013, which was only eight months before the effective date of implementation. Until then, no one knew the testing levels for each specification.

The current VGP will expire in December 2018 because the Clean Water Act mandates that NPDES permits can only be issued for up to five years. Between now and then, it remains to be seen exactly how the VGP will affect the lubricants market. However, due to the prevalence of the U.S. in international trade and the many regulations in the VGP for EALs, market demand for EALs will likely continue to grow.