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Shipping-Gate Timeline: How The Global Ship Fuel Controversy Came About

This article is more than 3 years old.

A set of global ship fuel issues are emerging, based on events that occurred in the Mauritius oil spill in August.

This controversy allowed a highly toxic set of chemicals to be pushed through as a new type of ship fuel, and in doing so, has disrupted the safety of global shipping around the world. It was such a mix of hazardous chemicals that the oil has been referred to as a super-pollutant ‘Frankenstein Fuel’ by leading environmental NGOs.

Estimates from shipping analysis have revealed that one in twenty ships are at risk of suffering catastrophic engine failure each voyage they take.

How did the world get here? This is the story of Very Low Sulfur Fuel Oil or ‘VLSFO,’ the controversial fuel that lies at the heart of the ‘Frankenstein Fuel’ Shipping-Gate scandal.

The 2015 Paris Climate Agreement

In December 2015, over 150 world leaders gathered in Paris to negotiate a historic agreement to reduce global carbon emissions. This was the single largest gathering of world leaders for such a UN meeting. The agreement set the course for how the global economy would transition to a low carbon growth pathway to avoid runaway climate change. 

It was signed by 175 world leaders. Within 12 months, the Paris Climate Agreement was ratified by enough countries to be accepted as international law, making it one of the fastest periods for an international treaty to become law in history. It was agreed that enforcement for the Paris Agreement would begin in the year 2020.

The global shipping industry was particularly exposed to the low carbon plan of the Paris Climate Agreement. Global shipping is the world’s sixth highest emitter of carbon dioxide. Indeed, if it was a country, global shipping’s emissions would be greater than France and Germany combined. Shipping also burned one of the most polluting forms of fuel, the thick, residual substance left at the end of the refining process. This oil had the consistency of a black peanut butter and was referred to in the industry as Heavy Fuel Oil (or HFO). Over the previous decade, the industry had not invested enough to explore alternative, cleaner ways to power their ships.

So the shipping industry took a controversial decision in 2015. Rather than seeking to comply with the Paris Climate Agreement, the global shipping industry simply decided not to abide by the international agreement at all. This caused shock and anger among environmental groups and world leaders.

By 2016, the shipping industry was facing large, angry protests outside the offices of its regulator, London-based International Maritime Organization. The $80 million a year organization funded by taxpayers, had invested in expensive marketing campaigns claiming shipping should be exempt from reducing its carbon footprint as it was ‘indispensable to the world’ (World Maritime Day 2016). However, sensing the pressure mounting to show how the shipping industry was trying to reduce its environmental footprint, the IMO developed a strategy to deflect attention from the lack of progress on carbon, and onto another air pollutant from ship fuel, Sulfur Dioxide Emissions.

‘The Bait and Switch’ Strategy 

The focus on Sulfur Dioxide was seen as a way to pacify environmentalists and confuse the public, by claiming that global shipping was reducing air pollution. 

Let’s be clear, Sulfur Dioxide is a big problem. But it causes a different sort of problem than carbon dioxide. In particular, Sulfur Dioxide from ships are responsible for 20% of acid rain and an estimated 400,000 people a year dying prematurely with Sulfur Dioxide-related poisoning that causes lung cancer, breathing and heart complications. The health costs alone were estimated at over $50 billion each year. Acid rain was known as a major problem in the 1970s and 1980s in Europe, stripping forests bare. It led to major changes in Europe and the U.S., including important amendments to the U.S. Clean Air Act in 1990 to regulate Sulfur Dioxide Emissions from cars. Shipping had been left relatively untouched.

As serious as Sulfur Dioxide is, it should never have been an option to choose between one or the other. Carbon Dioxide is causing irreversible damage to the atmosphere and the ocean, making the planet heat up, icecaps and glaciers to melt, sea levels to rise, and storms more violent. It affects the entire 8 billion population who live on the planet. Too much carbon dioxide in the atmosphere is changing global weather patterns. Again, the most marginal in society are the ones who are bearing the worst brunt of these effects.

The actual solution for global shipping would have been to remove fossil fuels altogether from how ships are powered, and invest in alternative power systems and ways to improve the efficiency of existing ships (clean new fuels, solar and wind).

Instead, in October 2016, the UN Shipping Regulator, the International Maritime Organization, announced it would reduce sulfur dioxide emissions by 85% by lowering the amount of sulfur permitted in ship fuel oil from 3.5% to 0.5%. 

Sulfur had already largely been removed from car exhausts decades ago, for the risks it posed to congested city centers. Shipping had dragged its feet on this issue, known to cause deaths and illness around the world. 

This was an important announcement, as it involved an important re-think of how ships are fueled, and gave the impression that the IMO was willing to take bold actions. However, it still kept the thinking restricted to those within the oil industry looking for new ways to use the existing multi-billion dollar oil infrastructure built around the world.

The then recently-elected Secretary General of the IMO, South Korean Kitack Lim, announced that the IMO would seek to do this in three years, by 1 January 2020. This was an impossibly short timeline. The intention was to signal to the world that when the Paris Agreement came into force in 2020, the global shipping industry was already playing its part by reducing air pollution. When in fact, sulfur dioxide would have been removed anyway if global shipping had started moving away from fossil fuels in the first place, in line with the Paris Climate Agreement.

As far as greenwashing strategies went, it was genius. However, there was one problem – there was no plan for how the industry was going to meet this 0.5% target.

There were four possible options for how this would be met. This led to the famous two year ‘Mexican-stand off’ where vested interests refused to budge on their positions.

The Four-Way Mexican Stand Off

The move to 85% lower Sulfur Dioxide Emissions (the 0.5% target) would entail an estimated $50 billion of additional transition costs over three years. This was felt to be a smaller price to pay than the much higher transition cost to a low carbon fuel that would entail the wholescale redesign of the global shipping industry.

The central question was who would pay for this transition cost. It turned into a four-way Mexican stand-off between the main industry clusters.  

1. New Ships. Alternative fuels such as Liquified Natural Gas (LNG) offered one pathway. However, LNG-powered ships meant building entirely new vessels.  The shipyards would be the big winners with this option, and shipowners (and their financial backers who had loaned billions to build an older ship design) would be left with billions of dollars of older ships they would be unable to re-use. LNG-ships would also require a completely new ship fueling infrastructure around the world (in the same way that Tesla had to build a supercharger network across the U.S. for its electric cars), and slightly smaller cargo bays, reducing profits for ship operators, owners and their financial backers.

2. Scrubbers (retrofitting existing ships). A new type of technology was being introduced into the market. It was called a ‘Scrubber.’ This piece of kit cost around $10 million per ship and would be fitted to the exhaust and engine of the vessel. Large ship engine suppliers like Mitsui E&S and Wartsila looked at these options as revenue opportunities. It meant that ships could continue using Heavy Fuel Oil, but the scrubbers would capture the excess Sulfur Dioxide before it left the exhaust chimney of a ship, and then dump this into the ocean (there was another type of scrubber that captured and stored the Sulfur Dioxide to be disposed on land called a closed loop scrubber, but this was less popular). Scrubbers were seen as saving the atmosphere but acidifying the ocean, being hard to monitor when a scrubber was being used, and would continue to allow ships to use heavy fuel oil. Ship owners would have had to bear the cost of this upgrade (often at over 20% of the ship’s value).

3. Fuel Suppliers (Oil Retail). The third option to meet the low-sulfur requirement was to mix Heavy Fuel Oil with other forms of ship oil and combustible chemicals (such as plastics). These new, blended fuels, would have resulted in a higher cost for the ship fuel retailers, and it was unclear whether all these costs could be passed onto the ship operators. These blended fuels would have reduced margins of retail ship fuel suppliers around the world (called bunker fuel suppliers, and often included many of the oil majors’ retail arms such as BP, Total, Shell, Exxon). There would be a lot more operational risk put on oil retail providers whereas before, they were simply brokers to get ship oil from where there was supply (refineries) to where there was demand (400 major ports around the world).

4. Oil Refineries (Oil Production). The fourth option was to change the very fuel itself that would go into ships. Around the world, large, expensive petro-chemical oil refineries had been built that had been producing the high-sulfur Heavy Fuel Oil for ships. To produce a low-sulfur version, the refineries would have had to remove the sulfur from the oil during the production process. This would be a huge chemistry challenge, and meant reinventing the entire ship fuel production process, rendering billions of dollars of refinery investments over the past decade useless. Then they would have to rapidly scale up production of a new giant chemistry set in record time to meet the January 2020 deadline and start producing around 5 million barrels a day for ships.

For two years, talks remained in a deadlock. No one party was willing to concede any ground.

The January 2020 deadline was fast approaching.

Making a bet that VLSFO oil was the way forward

In 2018, the Secretary General of the IMO made a bet that this new type of low-sulfur oil would be the way forward. It was an ill-thought through decision that failed to comprehend the design, development, quality assurance, monitoring and gradual testing phase needed to scale up a completely novel fuel into a global supply chain in such a short period of time. At the October 2018 meeting of the IMO’s Environment Committee in London, a decision was taken to ban any fuel on ships that did not meet the low sulfur requirements. The only exception would be ships with the $10 million ‘scrubber’ kit installed.

This IMO decision essentially picked who would bear the cost of the transition. It would be the oil refineries owned by the oil majors. The decision sent a signal that low-Sulfur ship oil needed to be available globally by January 1, 2020 in order to comply legally with IMO’s international ship pollution regulations (called MARPOL). 

This was how Very Low Sulfur Fuel Oil (VLSFO) was born. 

However, tt was a term for a fuel that did not exist. VLSFO was essentially a ‘fake fuel’ that would need to be invented.

But there was a problem with this approach – there was no plan for how the industry would meet this goal. This time, there was only 14 months to go until the 1 January 2020 deadline.

The race to invent VLSFO

Once the IMO had made the decision to focus on low-sulfur oil, it was immediately clear that there was no such thing as low-sulfur oil. It wasn’t a standardized oil that just came out the ground, or where impurities could easily be evaporated off. Low Sulfur Fuel Oil was a complex set of chemistries that needed to be mixed together, based on what oil and chemicals were available around the world, and what engines ships were using. It required some of the most complex chemical engineering the world had ever seen for an oil production process.

The oil majors were literally inventing a new fuel.  But it wasn’t just one fuel.

There were hundreds, if not thousands of different permutations for how the Low Sulfur Fuel Oil could be mixed. This is when the problems started occurring. 

Toxic VLSFO: a dangerous fuel

When the oil had been placed in engines, a range of issues had started to be identified. 

These ranged from ship engines just shutting down in the middle of the ocean leaving crews stranded for days on end, critical engine parts cracking and breaking apart, excess sludge clogging entire pipelines and requiring wholesale cleaning, metal sand appearing and rubbing the engines like sandpaper, and chemical reactions caused engine parts to rapidly start deteriorating.

A detailed analysis of the main flaws identified with VLSFO can be read in a separate article entitled, “Shipping-Gate: Why Toxic VLSFO Fuel Is Such A Danger For Global Shipping” that was also published in Forbes today, and can be accessed through the following link:

MORE FROM FORBESShipping-Gate: Why Toxic VLSFO Fuel Is Such A Danger For Global Shipping

It reveals just how serious the problems with VLSFO are, and just how much this was risking the lives of seafarers.

Industry fully aware of VLSFO flaws

The entire oil, shipping and insurance industry appeared to be deeply aware of these issues, with entire conferences dominated by such topics. 

Maritime authorities or industry regulators were never invited to any of these events, or ever had oversight of this new fuel being injected in ships around the world.

The wide variety of ways for how VLSFO could be engineered were raising major quality, supply, storage, legal and commercial questions. 

For example:

  • Quality issues: most concerning were top secret industry reports that the new VLSFO fuel batches were not performing in the same way as the previous Heavy Fuel Oils were. These new VLSFO oils were being discovered to be unstable, volatile, and highly variable. There were reports of serious engine failures, breakdown, excess waste, clogging of pipes, and then it was discovered that several blends were even exceeding the IMO’s own 0.5% Sulfur limits.  Chemists recommended that ships start to carry more lubricant oils, that contained new chemicals that would need be carried on board and matched to the oil and engine. If there was a leak into the ocean with these lubricants (which could be as high as 90 tons as was seen with the Wakashio in Mauritius), it would represent a major chemical hazard. So these reports raised serious ship safety and environmental concerns with this type of fuel.

  • Supply issues: with the precise formulas still being worked on and less than 14 months until the 1 January 2020 deadline, it was unclear whether there would be enough VLSFO fuel blends to meet industry demand of 5 million tons a day. The industry was full of questions for what would happen in the event of insufficient supply on January 1. If ships ran out of VLSFO in one port half way around the world, could they then switch back to Heavy Fuel Oil (HFO), and if so, who would bear the liabilities for exceeding high sulfur emissions? It was a ‘Catch Me if You Can’ strategy.

  • Storage issues: Once VLSFO was introduced into the market, it was noticed that it was becoming unstable in a matter of weeks. This meant it had a much shorter storage life than previous oils. It would be highly dependent on when the batch of oil had been made. In an article for industry publication, Bunkerspot, this June, a leading oil analyst reported their concerns about the fuel. “VLSFOs test as stable when bunkered but have quickly become unstable, some within only a few weeks indicating their storage lifespan is much shorter than more traditional marine fuels.” This would pose particular risks for vessels on long voyages (such as the Wakashio).

  • Legal issues: the variation and instability of the oil started to raise all sort of legal questions about who was responsible for major engine damage being caused by the unstable VLSFO fuel. If the fuel was mixed with new chemicals and released higher sulfur dioxide emissions than the IMO permitted, questions would be raised whether it would be the purchaser of the fuel (usually the ship operator), the ship owner, the fuel supplier, the chemical supplier, or the ship’s engineer following instructions from the operator, who would be liable.

  • Commercial issues: There were several commercial issues with VLSFO. One of the biggest was whether the price of VLSFO was going to be stable given the addition of so many chemicals. The low supply and high demand was likely to push VLSFO prices beyond what could be affordable. This made several companies evaluate whether for a $30 million vessel, installing a $10 million Scrubber made more financial sense, or spending an extra $5 million a year on additional fuel prices due to the premium being charged for VLSFO. This then had other operational implications. With such a wide variety of oils being used, ship operators and owners were being guided to start collecting samples almost immediately during the fueling operations on board ships to send off for analysis. This would reveal whether the ships were receiving what their operators had paid for. Reports about VLSFO also started to reveal a larger volume of lubricant oils that would need to accompany the new type of fuel oil, given the problems the VLSFO was causing to ship engines. These new chemicals created additional damage to ship engines and the marine environment, as Mauritius was to witness by the summer of 2020. They also brought significantly higher margins to the oil majors who were forced to create the more costly low-sulfur VLSFOs in the first place. It was essentially a pay-off for these oil majors being asked to foot the cost of transitioning to the low sulfur ship fuel, by earning more volume on a higher margin product line (lubricant oil).  Yet, the payoff meant greater risk to the environment.

That was the thinking at least at the end of 2019.

The agendas of industry conferences, technical papers and Board Meetings were dominated with these five risks. The flaws with VLSFO had become such an ill-kept secret that at an industry conference in 2018, a delegate ran a Monty Python-like spoof sketch which likened VLSFO production to the ‘Three Witches cauldron scene’ from Shakespeare’s Macbeth consisting of ‘leg of newt and frog’s toes.’

The IMO was introducing a major chemical risk to the ocean. There would be no way to regulate this oil – neither by the IMO, nor by national regulators. The industry would be self-regulating (and hiding) this risk themselves.

Indeed, for the vast majority of ships, Maritime Safety Authorities and National Coastguards would not even know what mix was being concocted on board, and burned in the ship’s engines. Even worse, they would be blind whether this new brew even complied with any national or international standards at all.

Giant chemistry experiments on the world’s oceans

While the oil and shipping industry battled over the minutiae of ship pollution insurance law, those whose lives were being put on the line were the engineers and seafarers that were expected to run ships for months on end with this unknown ‘witches brew’ in their tanks.

As the January 2020 deadline approached, more ships started experimenting with this fuel. The crews started to notice an increasing number of problems with this toxic chemical cocktail.

Crews would fuel up at major ports such as Singapore, Rotterdam, New Jersey or Tokyo. They had no idea what quality of fuel they would receive. As the vessel would get underway, samples would be flown out to a laboratory to get the chemical signature and see if it matched with what the vendor had promised. These assessments would reveal to chemists at the laboratories of major shipping companies what the particular risks were for each batch of oil. 

They would then communicate guidance to the Chief Engineers on board each ship about what controls to tweak, how much to alter the heating, what machinery parts were likely to break down, which engine parts would get regularly clogged, where the fire hazards were, what chemicals to add. And these were what the large ship operators would do – thousands of other ships were just leaving these decisions to low paid Chief Engineers in ships around the world, sailing close to many fragile coastlines.

Bad oil being dumped overboard

One byproduct of this oil was that it creating heavy sludge in engines as a waste product. Rather than being stored on board and taken to port to be safely disposed of, many ships’ crews starting attaching hoses to parts of the ships engines where the sludge was accumulating, and just pumped this overboard as the ship was sailing.

Carnival Cruise Line had been fined were fined $40 million in 2016 after its subsidiary, Princess Cruise Lines was found to have done the same and rigged ship sensors and official logs to avoid detection. This became part of the ‘Magic Pipe’ scandals, some of which were caught on camera.

6% of all VLSFO batches are faulty

Industry reports reveal that 6% of all VLSFO had serious problems. With 60,000 large ocean-bound vessels on the ocean at any moment, this means that 3600 vessels would be carrying faulty VLSFO fuel. Many in the industry have stated in public events that they believe this to be a gross underestimate. For example, sampling from Europe which was more robust, revealed faulty VLSFO with at 13.5% of vessels tested. If this was the global average, that would mean over 8000 ships would be sailing with faulty VLSFO at any moment in time.

Ship crews were being asked to run giant chemistry experiments on the ocean.

It is the equivalent of an aircraft pilot or a truck driver being asked to fill up, then soon after departure, would have to start playing around with different set of heating and chemical controls to try to get the engine to work effectively. One wrong dial, and the engine would experience a catastrophic failure. 4% of all voyages would be known to be carrying a faulty batch of fuel.

That is why the bunker fuel notes and the samples taken during ship fueling were so critical. They also became central to the cover up that was seen with the Mauritius Wakashio oil spill.

The looming January 2020 deadline

With weeks to go to the deadline, the industry continued to be full of nervous commentators who continued to highlight the supply and quality issues with the fuel. Several even wondered whether the IMO itself, under Kitack Lim, would stand by its self-imposed deadline.

In October 2019, Lim gave a statement that he intended the industry to comply with the January 2020 deadline. The industry started ramping up on the use of VLSFO on board ships.

January 1 2020 came, and then something unexpected happened. Absolutely nothing.

Over the three months from September 2019 to January 2020, VLSFO went from powering 2% of the global shipping fleet, to powering 70%. It was an unprecedented volume, within an unprecedented timeline. From less than 100,000 tons a day to 3.5 million tons a day, a 3500% leap in just four months. And all appeared to have gone seamlessly. Despite serious concerns being raised about the quality and supply of VLSFO just a few weeks earlier.

Over 3.5 million tons of VLSFO was now being produced and supplied each day to power mega-ships across the world’s oceans. VLSFO was soon found in every port, and across every ocean in the world. Nothing could go wrong for this apparently miraculous low-sulfur fuel. It provided a narrative that the global shipping industry could regulate itself and improve air quality at the same time.

Kitack Lim was re-elected for a new four-year term as IMO Secretary General.

As he basked in the snow-capped mountains of Davos at the end of January 2020 with other members of the world’s elite, trumpeting VLSFO as a global success for clean shipping, another storm was brewing from the East. 

This time it involved a mysterious new flu-like virus that was first reported in Wuhan and had now spread to a cruise ship in Japan.

Arctic protests against VLSFO: February 2020

Until this point, the chemical formulas being used for VLSFO were being treated as a commercial trade secret. This was to prevent the world from realizing just how volatile, unstable and variable the new fuel was.

In February 2020, protests were taking place outside the London Headquarters of the IMO.  This time regarding pollution to the Arctic caused by heavy ship fuel oil, and in particular, the new type of fuel known as VLSFO.

Climate change was opening up the Arctic, and researchers like Mia Bennett had revealed that on the current trajectory, the North Pole would soon become a maritime superhighway within decades, shaving one third off the journey time (and cost) of travelling via the Suez Canal between Asia and Europe.

Assistant Professor at the University of Hong Kong, Mia Bennett has looked at the impact of receding ice on future shipping routes. Her assessments, posted on Cryopolitics, imply that by mid-century, vessels may be travelling directly over the North Pole, taking the passage she describes as the Transpolar Passage.

However, there were growing concerns among environmentalists about the risk that that ship fuel (which was now primarily VLSFO) would pose to the pristine environment of the Arctic.

Just ahead of the protests, environmentalists from the Clean Arctic Alliance had gotten hold of a German and Finland Government funded Research Paper on VLSFO. In that paper, it revealed officially for the first time that VLSFO had serious flaws. It also revealed for the first time by independent analysis, that VLSFO contained higher carbon dioxide emissions than Heavy Fuel Oil. In addition, the researchers found there were higher concentrations of black soot being emitted from ships using VLSFO. While VLSFO was reducing the amount of Sulfur Dioxide in the atmosphere, it was causing many other serious pollution side effects. This was not a cleaner fuel on many of the other dimensions that needed to be considered for the environment.

The use of VLSFO now spelled a triple-death knell for the Arctic. These chemical blends with higher carbon dioxide emissions would accelerate the impact of climate change on a fast-melting Arctic. In addition, when this black soot landed on the pristine white snow, glaciers and ice of the Arctic, it would start to accelerate the melting of the snow and ice (due to the physical properties of darker soot that absorbs heat, compared to the white snow that would otherwise have reflected sunlight). For an isolated ship every few months, this did not matter. But the melting sea ice meant the Arctic passage was remaining open for longer than just a few weeks over the summer and soon turning from a trickle to hundreds of ships passing through each day. Third, a deadly VLSFO oil spill in the Arctic, would cause untold damage to the marine environment for decades.

The meeting closed on 21 February 2020 in London without a clear resolution, but environmentalists were first alerted to the dangers presented by VLSFO, which they started describing as a ‘Frankenstein Fuel.’

As the meeting closed, Italy had just registered its 20th case of the mysterious flu-like disease, a jump of 14 from the previous day. Two weeks earlier, this novel coronavirus had just been given a name: COVID-19.

What happened next, was something no-one could have predicted (well, except Bill Gates). 

The pandemic goes global

March 2020 would forever be imprinted in the history books. The regional illness turned into a full blown global pandemic. Countries slammed their borders shut, financial markets crashed, there was a wild scramble for ventilators and personal protective equipment, as the world grappled with what harm this new disease could cause.  In the midst of this, international economic activity collapsed, and global aviation ground to a halt.

The energy markets were also in turmoil, but for a different reason. Blindsided by the pandemic, Russia and Saudi Arabia had been facing off in an oil production war that brought the price of oil cratering by 65%. With demand for oil falling by one third due to the pandemic, the world became awash with cheap oil that no-one would buy. Massive supertankers were rented outside ports to store this oil. Soon, even these were full and oil companies were facing a storage crisis.

In an unexpected ‘Black Swan’ event, the price of oil actually turned negative for the first time in history. This meant that oil producers were paying buyers to take oil off their hands. This was because it is more expensive to start and stop an oil well than keep production flowing. Oil producers knew that with oil storage running out and tanker prices rocketing, it would be better to find anyone to take oil from them than the value and complexity of holding oil.

On the ocean, half a million seafarers were stuck on ships around the world. Not designated as essential workers, they were forced to continue working. They became responsible for ensuring goods continued to be shipped around the world.

The shipping and oil industry could have gotten away with the VLSFO affair, if it wasn’t for a global pandemic.

The pandemic played its own havoc with the ship fuel scandal in two important ways.

The Crew Change crisis

First, there was the ship Crew Change Crisis. This was described by the Pope and UN Secretary General as one of the greatest Humanitarian Crisis happening today.

Early in 2020, engineers were getting to grips with problems caused by the new VLSFO to ship engines. They had noticed a marked increase in engine and mechanical failures. Ships were breaking down around the world, and crews were scrambling to understand why and how to fix it.

Then the pandemic hit. The pandemic prevented crews from being replaced on ships (what was known as the great Crew Change Crisis).

It meant that sailors around the world were unable to be replaced on board ships. Many crew found themselves stuck on vessels well beyond the safe legal limits for them to do so (legally defined as 11 months by the International Labor Organization). Thousands were left stranded for over a year in the same, cramped, industrial cabins, with no certainty for when they would be allowed to go home and see loved ones.

They were unable to leave their vessels, and in many cases, their salaries had been frozen, forcing several to put out signs appealing for food, water and repatriation. This created one of the greatest humanitarian crises caused by a major industrial sector

With ship operators keen to continue greasing the wheels of the stuttering global economy, workers were pushed to keep going. The IMO was an ineffective institution in resolving this crisis, to such an extent that both the Pope and the UN Secretary General were forced to step in, calling the crew crisis a humanitarian disaster happening on the world’s oceans. UN Secretary General Antonio Gutteres had to do this not once, but four times over the summer.

So within a few months of 2020, tens of thousands of ships around the world were being run by over-extended, under-resourced and under-staffed crew, uncertain when they would be able to leave their vessel. And then on top, they had been given faulty vessels crippled by a new form of experimental fuel that was not working. It was clogging pipes, cracking machinery and risking even more serious engine fires. 

VLSFO was leading to added pressure and workload from the mechanical and engine malfunction issues, all of which pushed crews to the limit. And in the case of the Wakashio in Mauritius, beyond the limit.

The industry remained silent on this, forcing crew to stay on board vessels and swearing them to secrecy. This led to a spike in mental health cases among seafarers around the world.

The Jet Fuel Crisis

The second way that the global pandemic impacted VLSFO was in a way no-one could have predicted. It could almost have been lifted straight out of a chapter of Freakonomics

The shut down in global aviation and overproduction of oil meant there was a significant surplus of aviation fuel in the world.  There was so much jet fuel, that this oil was being stored in large oil supertankers offshore outside major aviation and maritime hubs.

Indeed, with the price of crude oil turning negative, companies were being paid to take up surplus jet fuel. It wasn’t just that the shipping industry was stepping in to save the aviation fuel industry, it was actually highly lucrative to do so.

With the shipping industry struggling with troublesome VLSFO, which was more expensive due to the additional chemicals needed in the refining process, this could solve both the VLSFO quality and price issue. Oil majors would be paid to purchase surplus aviation fuel, then mix it with VLSFO blends, to create even more unexpected unusual blends.

Effect of the jet fuel mix on the price of VLSFO

The question about aviation fuel being added to VLSFO is central to understanding the safety and stability of the fuel. Was it commercial factors that went into this decision? Ahead of the January 2020 IMO deadline, VLSFO was significantly more expensive than Heavy Fuel Oil (double in January 2020). This meant that it would have paid off to install a $10 million ‘Scrubber’ over two years than pay for a VLSFO product that was twice as expensive. Bulk carriers consume between 50 and 100 tons of VLSFO a day, which is $45,000 a day if prices remained that high ($10 million a year assuming 225 days operation at sea a year).

At the same time, there was a noticeable uptake in blended fuels. Blended fuels primarily consisted of aviation fuel. The problem with aviation fuel mixed with shipping fuel is that it creates more dangerous and unstable properties for the VLSFO that could destabilize a ship engine. One such property is the viscosity (or thickness) of the fuel.

At the same time as blended fuels were bringing down the price of VLSFO from almost $700 to less than $200, the average viscosity had significantly fallen toward dangerous levels. This would have placed greater risks on ship crews around the world and would imply companies putting profits before lives.

Was the shipping industry paid to take old, jet fuel?

Many oil companies, realizing there could be an opportunity to access cheaper aviation fuel (or even be paid to take it off supplier’s hands), rushed to obtain this, and started mixing this aviation fuel with the VLSFO. The intent had been to see if they could create a cheaper version of blended VLSFO, and bring the cost of VLSFO down.

This mix ended up producing a new batch of ‘Frankenstein fuels,’ which became yet another deadly chemical cocktail mix of VLSFO fuels that was used to power ships around the world, with all sorts of new chemicals that was originally intended for aircraft engines.

A deadly cocktail: aviation and ship fuel

This turned out to be a dangerous strategy. Industry reports revealed that the addition of aviation fuel into ship fuel was altering the chemical properties of VLSFO. In addition to viscosity, another critical parameters that was altered was the temperature at which the blended VLSFO-aviation fuel would burn in the engine.

Degrading jet fuel

The second danger, was that oil and ship fuel companies were using jet fuel that was rapidly degrading. Whenever plane fuel is not used within three months of being produced, microbes  starts to grow in it. This results in the oil becoming contaminated and rapidly degrading.  By June 2020, several months into the grounding of flights, the oil industry was about to lose billions of dollars by just storing jet fuel in offshore tankers. 

This meant that not only was VLSFO already a problematic fuel, the addition of rapidly degrading aviation fuel created an even more toxic mix. 

The world’s largest ship fueling hub, Singapore, which also hosts one of the world’s busiest airports, was particularly affected with initial reports of over 60 supertankers moored in its narrow waterways storing excess jet fuel.

It was against this backdrop that a ship grounding occurred that would risk bringing the entire VLSFO house of cards come tumbling down.

The fateful journey of the Wakashio: 14 July 2020

Forward to 14 July 2020. A large Japanese Bulk Carrier, the Wakashio, was just finishing two days of refueling in a quiet corner of the Port of Singapore.

The Wakashio was one of the largest ships in the sea. It was almost as tall as the Eiffel Tower. A Capesize Bulk Carrier, it was too large to fit through the Panama Canal or the Suez Canal. It was about to embark on one of the longest round trip voyages, from Asia to Brazil and back again. This 30,000 mile voyage would be longer than circumnavigating the planet (a 25,000 mile voyage). 

It took two days to top the main storage tanks of the Wakashio with almost 5000 tons of VLSFO. The VLSFO was a ticking time bomb. What quality was the VLSFO, and how long had it been sitting in Singapore before being used to fill up the Wakashio? What risks did the fuel present? What was it mixed with? Most importantly of all, who did the mixing?

Because of the use of VLSFO, over 200 tons of Diesel Fuel was added on board to help the VLSFO burn easier. Then 90 tons of lubricating fuel oil was added, reflecting how much of a chemical experiment was being conducted on board, with high risk VLSFO powering the engines.

These volumes of fuel are truly astounding. It is a reflection of how the International Maritime Organization has allowed global shipping to balloon in size. Ships have almost doubled in the last decade alone, and safety regulations had not kept up.

The dangers of the Wakashio

The Wakashio epitomized the danger presented by the global shipping industry, that has now been accentuated with VLSFO. 

Bulk Carriers make up one in ten vessels on the ocean, consisting of over 6000 ships, 60% are which made in Japan, and Japan is the second largest owner of Bulk Carriers, behind Greece. These vessels present a major hazard to island and coastal communities. This was seen in various reports that analyzed the Malaysian Bulk Carrier, the MV Selendang Ayu, which split in two off the coast of Alaska in 2004, revealing several major structural design flaws with Bulk Carriers and their oil storage tanks.

In the 1980s and 1990s, over 200 bulk carriers had sunk, 99 lost between 1990 and 1997 alone, with the loss of 650 crew of this time period as well. The IMO was slow to collect the accident reports from these incidents, but private investigations revealed fundamental flaws with ship design and the way the cargo was loaded. 

These findings are particularly relevant now, given the heightened risk contaminated VLSFO may now present for global shipping. Here are some of the systemic risks that could already be seen with the Wakashio.

  • The Wakashio’s hull was not fully protected (single, not double-hulled). This meant that the toxic VLSFO were being held in tanks as flimsy as tin foil, holding oil equivalent to well over oil in the tanks of 50,000 family cars. If the ship’s hull was to be penetrated, there would be little once could do to prevent the oil from leaking out. Oil tankers were forced to become double-hulled after the Exxon Valdez oil spill in Alaska in 1989. However, the shipping industry had convinced the IMO that they should be permitted to sail using single-hulled Bulk Carriers. Today, tens of thousands of bulk carriers are travelling the world’s oceans with toxic VLSFO in paper-thin single-hull vessels.

  • The second risk was that the Wakashio was not carrying sufficient oil protection equipment. The average size of ships have doubled in the last decade, requiring significantly more fuel to be carried. Today’s largest cargo ships carry the same amount of oil as oil tankers of the 1950s. The perimeter of the Wakashio was over 700 meters. And yet the vessel did not carry enough oil protection booms to cover even one side of the vessel. This meant that had a ship run aground, the toxic chemical cocktail containing VLSFO would have spilled out across the coastline, without sufficient equipment to prevent a spill. Another major regulatory failure. Again, tens of thousands of vessels do not have the right safety equipment on board to prevent a major spill of VLSFO.

  • A faulty vessel. The Wakashio had a track record of being a particularly problematic vessel, with almost 100 faults identified in its short history. Like the other dirty secret in the shipping industry, this is due to the failure of the ship inspection regime, a system known as Ship Classification Societies, and the perverse incentives to perform a thorough inspection of a vessel. These had become rubber stamp inspection agencies, that ship owners used to hide behind. This is why pushing VLSFO into the world’s shipping fleet without a robust and independent ship inspection regime is going to create systematic global risk for years to come.

Wakashio’s fateful journey across the cold Indian Ocean begins

Loaded with deadly VLSFO, insufficient safety equipment, an overworked crew, a faulty vessel, the Wakashio set sail.

After spending the last six months in the relatively warmer journeys travelling between Australia, Japan and China, this was the first major cross-ocean journey it was embarking on. It was winter in the Southern Hemisphere. This would have made the Indian Ocean particularly cooler at this time of year. Given the risks with the cold pour point of VLSFO, could the crew have started to find that the oil was solidifying in the storage tanks and fuel lines? This would be something they would not have experienced before. Who did they have to turn to for advice on what to do?

Four days into the voyage, the Wakashio was already off course from the main shipping lanes of the Indian Ocean. Eight days later, it took a fateful 13 degree turn that took it straight on a collision course for Mauritius. A close analysis of the ship engines by satellite provider Geollect reveal a pattern of unexpected maneuvers and engine speed.  Over the course of 12 hours just prior to the13 degree turn on 20 July, the engine speed had decreased by 15%. In the preceding 30 mins, it had markedly slowed. Was there work taking place in the engine room to clear out any contaminated oil by the time the vessel turned?

Were the crew struggling with the instability and impurities of VLSFO? Was this the explanation why the vessel was drifting so far off course when it first entered the Indian Ocean? How many crew had needed to come down to the ship’s engine room to attempt to fix the giant ship engines that was struggling with the deadly cocktail frothing in the ship’s tanks? Could the Wakashio have experienced a runaway engine, that the crew were struggling to control at the time of the grounding on July 25?

The Wakashio’s engines had been built by Mitsui Engineering and Shipbuilding (Mitsui E&S). This is the same Japanese giant engineering linked to the shipping giant (Mitsui OSK Lines) that was operating the Wakashio and which had purchased the VLSFO fuel in Singapore. They should have known the impact and risks of VLSFO on the Mitsui E&S 2-stroke engines, one of the most common on ships, and used in tens of thousands of ships and power stations around the world.

Ship aground: 25 July 2020

At 7.25pm local time on Saturday July 25, just as the sun was setting, the Wakashio ran aground on one of Mauritius’ most important coral reefs in the South East of the island. It was on a heading directly for the 15,000 person historical former Dutch capital of Mauritius, Mahebourg. It grounded amid a network of internationally protected nature reserves, including coral atolls containing some of the world’s rarest species.

For 12 days, the giant Bulk Carrier sat on Mauritius’ reefs, while a nervous population grew restless. Islanders who had lived on that coast for generations knew the currents and how vulnerable the Wakashio was. It should have been the shipping industry’s responsibility to have had tug boats stationed around the world’s busiest ship lanes to tow off ships that are grounded. Planes, helicopters and swat teams should have been mobilized at that moment. The Waakashio was not leaving Mauritius’ reefs. If such global giants are demanding ‘free and open access’ to the world’s oceans, they should also be prepared to take responsibility of the pollution and wrecks they cause. It is not for small island nations to be subsidizing the true costs of operating such mega-ships that the shipping industry had pushed forward themselves.

So, for 12 days, those in the oil industry were nervous. They all knew that the Wakashio was carrying VLSFO. They all knew the risks of what the Wakashio could represent – not just to the coastline of Mauritius, but to the façade that was VLSFO fuel. 

Oil leak: 6 August 2020

On August 6, VLSFO oil started leaking. While the multinational oil, shipping and insurance companies started pointing fingers at each other, it was left to local fishermen to come to the rescue.

In the largest self-organized operation in the country, Mauritius galvanized thousands of volunteers within the country and among the diaspora to share resources knowledge, build oil protection boom and wade out into the oil to defend their country.

While the mainstream media saw the heroic actions of islanders wading out to defend their country from thick black sludge drifting toward it, the oil industry stared at their screens in horror.

In their worst nightmares, they could not have anticipated a situation where tens of thousands of coastal inhabitants would now been directly exposed to the deadly, cancer-causing chemicals of VLSFO.

Did the ‘international consultants’ sabotage and undermine Mauritius’ response to the oil spill?

The Prime Minister of Mauritius, who was in the midst of a bitter Court Review of a disputed election, tried to assure the population that the Wakashio’s insurers and owners were sending teams of ‘international specialists’ to help the country.

The islanders who had lived in that corner of the island for generations could not wait. They continued deploying whatever means they could to protect their island from the unknown chemicals of the VLSFO.

Over the next few days, with islanders waist deep in VLSFO, these specialists started arriving. They were from some of the supposedly most reputable oil spill response organizations. This included London-based ITOPF. The UN’s IMO sent a representative to ‘coordinate’ the international response. The shipowners and insurers, Nagashiki Shipping and Japan P&I Club were already on the ground.  The Japanese Government and ship operator Mitsui OSK Lines (MOL) sent almost 50 Japanese consultants between them.

The salvage operations were already ongoing with a Boskalis-owned subsidiary, SMIT Salvage, and Nippon Salvage.

When the oil started leaking, a standard procedure for any oil spill would have been to collect samples from across the coastline and quickly rush it off to a laboratory to understand what type of oil and risk was being dealt with.

This urgency should have been especially acute given the variability of VLSFO.

None of these things happened.

The cover up begins

It was the Southern Hemisphere’s winter, so the water temperatures around Mauritius was particularly cold. This meant that a lower proportion of oil would have evaporated. Combined with the toxic chemicals of the lubricants and other unknown substances in the oil, this added to the toxicity.

Toxicity tests were being urgently called for since the very earliest days before the vessel had even split in two.  These did not materialize. Why not?

If the oil spill had happened in the Arctic with VLSFO, it would have been even more horrendous. A t group of nations present on Antarctica had already banned VLSFO from vessels travelling close to its shores.

Then other unusual events started occurring.

The unexplained events

On August 15, the Wakashio split in two. 

The longer, 270-meter front section of the Wakashio was controversially sunk. This was despite the weather being relatively calm and the bow appearing buoyant. The bow contained the main fuel tanks of the Wakashio. It was where the bulk of the VLSFO was being stored in the various ship tanks in the wings of the bulk carrier.

Despite warnings not to sink the bow in a whale nursing area, a decision was taken to do just that. Mystery still surrounds this decision. In comments to the media, the IMO’s representative appeared to be intimately familiar with the details of where, when and how to sink the bow, and the media spokesperson from the IMO had studiously avoided answering the question whether the IMO was involved in any way in the decision to deliberately scuttle the Wakashio. Was the IMO fearful of what would be revealed if the oil was sent off for sampling?

Within 24 hours of the sinking, dead whales and dolphins started appearing. In total, 52 dead whales and dolphins were reported along Mauritius’ coasts. Interviews with heads of several environmental NGOs in Mauritius have revealed that at least double this number of melon-headed whales and dolphins are believed to have died. No official numbers beyond the 52 have been released as all trips from independent observers to was banned at the time, allowing many carcasses to drift offshore and or sink.

What happened to the VLSFO oil fingerprinting?

Then came one of the most bizarre aspects of the Wakashio saga. Until now, there has been no comprehensive fingerprinting of the VLSFO that was on the vessel.  Given the sensitivity of the VLSFO, there should have been samples sent off for analysis. There would have been bunker samples kept on board. The suppliers in Singapore should have had samples (when contacted, Singapore Port Authorities promised to come back with a response about samples they had kept but never did). 

There were no details of the oil released publicly from the dolphin and whale necropsies. There was no fresh oil from the ship’s engine room taken for sampling (which is still on Mauritius’ reefs as a salvage team comes to work on this in the new year). There were apparently no samples of oil taken from the tanks, fuel lines and pipes (which still contains VLSFO oil). 

A video had surfaced of the condition of the engine room during the journey. It is time coded from the time the vessel departed Singapore (it is important to understand the timecode before watching the video). However, some of the key components (such as the piston heads and fuel lines) have not been filmed.

So until now (four months later), there has been no detailed oil fingerprinting conducted aside from a ten day old sample that some of the world’s leading oil spill scientists at U.S.-based Woods Hole Oceanographic Institute had conducted.

So a ten day old sample oil was the only oil that was analyzed from a vessel that caused the biggest national catastrophe in Mauritius’ history?

With the presence of over 100 international specialists in oil spill response on the island for several months?

Could this really have been just an ‘oversight?’

The oil spill triggered a mass uprising

This was the biggest oil spill ever experienced in Mauritius. It happened in the midst of a disputed general election. It triggered the declaration of a State of National Environmental Emergency and caused a mass uprising of over 100,000 in the capital city of Port Louis on 29 August.

In case the international specialists missed it, a second march galvanized tens of thousands and occurred in clear sight of the stern of the Wakashio still sitting on Mauritius’ reefs just two weeks later.

For international organizations such as IMO, ITOPF, MOL, Japan P&I Club, and the shipowners, Nagashiki Shipping, not to have conducted this fingerprinting is beyond surprising. It is highly suspicious.

What did the IMO know, and conveniently chose not to know?

On August 19, the IMO admitted they did not know the impact of the oil in the ocean. Then on October 9, they fervently denied why they should be involved in any oil fingerprinting, saying, “There seems to be some confusion about providing technical advice on oil spill response and clean up - which is one thing – and the actual practical actions, such as taking oil samples, or analysis, which is done on the scene or at laboratories, by experts in those matters.”  The IMO had appointed themselves as experts under the agreement signed with Mauritius to handle the oil spill (what’s know as an OPRC90).

The IMO then went on to say on October 10, “The IMO does not carry out oil fingerprinting. IMO does not run any laboratories. Please explain what the issue is with the oil finger printing? What is the reason for your questions?”

That is an odd statement to make, when the introduction of VLSFO was spearheaded by the Secretary General of the IMO himself and there had been significant controversy about the chemical composition of the VLSFO. He had pushed this forward against all the warning signs the industry had been showing at the end of 2018.

The lack of rigorous testing of VLSFO or ensuring that this legislation was robust before introducing such a big change to the industry highlight that the this decision was either an institutional failure or a leadership failure. Possibly both.

To this date, the IMO has avoided placing a senior representative on the record to answer these serious questions about their activity in Mauritius, and what the IMO knew about the oil spill and VLSFO risk.

The source of the VLSFO came from Singapore. And yet, Singapore Authorities would also not be drawn on the oil sampling.

Countries who offered their assistance with the oil, such as France, Australia, U.K., Canada and U.S.A. were left with fractions or poor samples. They have been left nonplussed with how the oil spill has been handled by the international organizations on the ground in Mauritius.

String of suspicious shipping disasters this summer: was contaminated VLSFO to blame?

Over the summer, there were a string of suspicious shipping incidents that also occurred around the time of the Wakashio oil spill. 

  • Off the coast of Japan, the Gulf Livestock 1 experienced engine failure in the midst of a typhoon in September and disappeared with only two survivors of a crew of 43.
  • Off the coast of Sri Lanka a day later, the MT New Diamond oil supertanker experienced a mysterious engine explosion, that required 12 ships, half a dozen aircraft and cooperation with 3 nations to put out the fire and avoid an even larger oil spill catastrophe in the Indian Ocean.

VLSFO is the hidden danger now plaguing the global shipping industry.

The lack of transparency and regulatory oversight in the industry highlights why shipping now presents a giant global menace. 

It is the reflection of how the actions of an entire industry led to the grounding of the Wakashio on Mauritius’ coast, a peaceful tourist island, and with the complicity of the oil responders on the island, proceeded to destabilize the country by operating in such a secretive and closed manner.

So to recap the VSLFO journey until now:

Epilogue: Complicity by omission

While ordinary Mauritians were battling against the impact of the oil spill, and a secretive operation was taking place to try eradicate the evidence, world leaders were loudly boasting of their achievements at the Summits about Global Biodiversity Protection at the UN Headquarters in New York (28 September) and Climate Change (12 December).

Yet they allow the shipping industry to remain a global hazard to innocent island nations, the marine environment and hundreds of thousands of seafarers.

The world’s most powerful nations at the G20, have remained silent on the issue of VLSFO and how global shipping will take its responsibilities seriously for the climate crisis.

The G20 has allowed shipping to continue unregulated, and to introduce a toxic chemical into the global supply chain, in ports in every country in the world, and all without any national public body being able to conduct robust testing of this chemical.

Global shipping breaks the Paris Climate Agreement

The original intention for introducing VLSFO by 1 January 2020 in such a rushed way, was an elaborate ploy to avoid taking action on climate change.

True to form, in November 2020, the world’s nations came together to agree how shipping was going to decarbonize over the next decade. Whereas many industrialized nations were making plans to decarbonize and invest in alternative, cleaner and non-fossil fuels, global shipping continued to operate without using any science to justify the policy decisions it was taking.

The Secretary General of the IMO, Kitack Lim, even tried to undermine some of these countries efforts on climate action, such as the EU’s important Emissions Trading Scheme, by directly challenging the European Commission to lower their own climate ambitions and scrap the EU’s scheme. This is the leadership and moral compass of the instirution under whom the world entrusted self-regulation of VLSFO to be introduced and managed.

On November 18, the IMO voted to allow global shipping to increase emissions by 15% over the next decade, rather than reduce emissions by half. Even then, the IMO refused to make any commitment for how these carbon emissions were going to be enforced. The tale of VLSFO should be sufficient warning for little trust the IMO has earned to be an effective supervisor and regulator of global shipping.

Shipping is now a lawless industry that has been allowed to opt out of international treaties, pollute the seas, endanger populations and transport 90% of our goods that most readers probably have in their homes around them.

Good voices for change and reform have been drowned out.

The tragedy of shipping has been the lack of courage for any national or international leader to be able to take on this industry. It was barely a decade ago when the phrase ‘too big to fail’ was uttered to save banks around the world.

Global shipping may be large, but their conduct and the cover up with the VLSFO affair shows the industry needs to be reigned in, for the good of the next generation, the environment, and for the hundreds of thousands who work hard and with the right intentions on ships around the world. 

It is the toxic relationship between Ship Owners, Ship Registration, Ship Insurance and the Oil Industry that needs to be broken up, this toxic Shipping-Industrial Complex.

A final word: islanders, the marine environment and a new President

VLSFO continues to power vessels around the world. There is a new President entering the White House, who promised internationally enforceable actions against international shipping as part of his electoral pledge.

This will be an important test for the new administration, who is promising bold action on climate. Will a thorough investigation be conducted into both the use of VLSFO around the world and in U.S. waters, as well as the conduct of the organizations involved in covering up the evidence in Mauritius?

Mauritians came together to stitch home-made booms due to the shipping industry not being sufficiently prepared. Last weekend, Japan’s Foreign Minister, Toshimitsu Motegi could not even find the time in the two days in Mauritius to meet the thousands of volunteers who had built these booms, or visit the island where dozens of the world’s rarest species were put at risk by the oil spill.

Hundreds of thousands of sailors and seafarers continue to be stuck on ships around the world, with increasingly risky fuels and engines. Are they being given the support they need to conduct their jobs safely?

By prioritizing the large businesses driving the industry than those most affected by the ocean, these leaders have lost any moral authority to set the rules governing the ocean. It is time for a new set of values and leaders.

A revolution in values to govern the ocean

After the horrors of World War 2 and the Holocaust, the world came together to make Genocide an international crime. Half a century later, after the Genocide in Rwanda, the world said, “Never Again.”

A quarter of a century after this, the world’s values are moving toward environmental issues. In 2020, the world has witnessed a major environmental crime take place in Mauritius and an entire industry ignore the decision of 175 world leaders regarding climate change, and seek to cover up the Frankenstein Fuel they have introduced into the Mauritian ecosystem. This current cohort of world leaders (in Government, business and civil society), have appeared to have lost their voice and their courage to take the global shipping industry on. Most of these leaders are perhaps too old and disconnected from their younger, more environmentally-minded citizens, who care deeply what impact large corporations and regulators are having on the environment.

In 1944, the world made Genocide a crime against humanity. Now must be the time to make Ecocide one too.  If the current cohort of leaders continue fail to act, it will be the next generation who will be passing judgement and evaluating their place in history.

VLSFO and the Wakashio should be the final legacy of this Ancien Régime.