Vessels operating within 24 nautical miles of the California’s coastline (“Regulated California Waters”) have been required to use distillate fuel with a sulfur content of 0.1% (1,000 ppm) since July 2009.  California’s regulations governing air emissions from ocean-going vessels, which are developed and enforced by the California Air Resources Board (“CARB”), provide that those rules: “shall cease to apply if the United States adopts and enforces requirements that will achieve emissions reductions within Regulated California Waters that are equivalent to those achieved by this section.  Equivalent requirements may be from [International Maritime Organizations (“IMO”)] regulations that are adopted and enforced by the United States or may be contained in regulations that are initiated by the U.S. Environmental Protection Agency.  [CARB’s low-sulfur fuel requirements] shall remain in effect under this subsection until the Executive Officer issues written findings that federal requirements are in place that will achieve equivalent emissions reductions within the Regulated California Waters and are being enforced within the Regulated California Waters.”  This language has generally been referred to as the “Sunset Provision.”

As of January 1, 2015, Annex VI to the IMO’s International Convention for the Prevention of Pollution from Ships (“MARPOL”) has required vessels to use fuel with a sulfur content of 0.1% when operating in the North American Emission Control Area (“ECA”).  The ECA encompasses Regulated California Waters as it extends 200 nautical miles off the West Coast of the United States, as well as the Gulf of Alaska, the Gulf of Mexico, and the East Coast of the United States.    Since January 2015, the maritime community has awaited CARB’s determination on whether MARPOL Annex VI’s requirements “achieved equivalent emissions reductions within the Regulated California Waters and are being enforced within the Regulated California Waters,” and thus, whether or not it would trigger the Sunset Provision.

Today, April 7, 2016, CARB announced that its low sulfur fuel regulations would remain in effect for at least 2 more years.  In Marine Notice 2016-1 CARB stated that it considered several factors in assessing whether or not to execute the Sunset Provision including: (1) differences in overwater boundaries of the ECA and Regulated California Waters, (2) the impacts of compliance options and exemptions available only under MARPOL Annex VI, and (3) differences in the respective enforcement programs of CARB and the federal government.  CARB concluded that if it repealed its low sulfur fuel regulations, leaving MARPOL Annex VI as the only law governing vessel sulfur emissions, it “would not likely achieve equivalent emission reductions within Regulated California Waters.”  CARB plans to reevaluate whether to execute the Sunset Provision in two years, when the Regulation 3 exemption permits expire.  CARB also claims that a two year period will allow the federal government to develop its program to enforce MARPOL Annex VI and allow CARB time to evaluate the impacts from vessels complying with MARPOL Annex VI through the use of low sulfur heavy fuel oils (CARB currently only permits the use of marine gas/distillate fuel with a 0.1% sulfur content) and alternative technologies such as exhaust gas scrubbers.

In short, for the next two years, vessels operating in Regulated California Waters will continue to be subject to two separate sets of vessel air emission laws, regulations and enforcement regimes.  Owners and operators of such vessels should review their current policies, procedures, and practices to ensure that they comply with both state and federal laws.

We will be discussing the impact of CARB’s decision to delay the triggering of the Sunset Provision in greater detail at our upcoming Environmental Casualty & Pollution Seminar being hosted at our Long Beach, California office between May 13 to 15, 2016.

CARB’s April 7, 2016 Marine Notice 2016-1 is available here

Keesal, Young & Logan Maritime Law Group

This information has been prepared by Keesal, Young & Logan for informational purposes only and is not legal advice. Transmission of the information is not intended to create, and receipt does not constitute, an attorney-client relationship between you and Keesal, Young & Logan. You should not act upon this information without seeking professional counsel.