Update On Compliance Requirements—EPA's Vessel General Permit aAnd MARPOL Annex VI

New Developments

There are three recent developments noteworthy to shipowners, operators and other maritime industry stakeholders.

(1) On June 27, 2011, the U.S. Coast Guard and the Environmental Protection Agency ("EPA") entered into a Memo¬randum of Understanding ("MOU") setting forth the terms by which the Coast Guard and EPA will cooperate in connection with compliance and enforcement of MARPOL Annex VI, as implemented in the United States through the Act to Prevent Pollution from Ships ("APPS").

(2) The One Time Permit Report required by the EPA's Vessel General Permit for Discharges Incidental to the Normal Operation of Vessels ("VGP") is due.

(3) The International Maritime Organization's Marine Environment Protection Committee ("MEPC") approved the U.S. Caribbean Emission Control Area ("ECA") at its recently concluded session.

(1) U.S. Coast Guard and EPA Memorandum of Understanding

Background

MARPOL Annex VI sets forth the regulations for the prevention of air pollution from ships. In 2008, MEPC approved amendments to Annex VI, which will reduce emissions of sulfur oxides ("SOx"), nitrogen oxides ("NOx") and particulate matter. See our previous advisory for more information: MARPOL Annex VI Proposed Amendments Move Closer to Implementation. The United States enacted amendments to APPS to implement these changes to Annex VI. Annex VI provides for the designation of ECAs where more stringent emissions standards apply than elsewhere. In 2009, the U.S. and Canada jointly proposed to establish the North American ECA. See our previous advisory for more information: United States and Canada Propose 200 Nautical Mile "Emission Control Area" under MARPOL Annex VI. IMO approved the proposal in 2010 and the North American ECA becomes enforceable in August 2012. On December 22, 2009, EPA issued final regulations implementing the amendments to Annex VI and the North American ECA. See our previous advisory for more information: EPA Finalizes Emissions Standards for Category 3 Marine Diesel Engines and Implements North American ECA. In June, the Coast Guard and EPA formally agreed to cooperate in the implementation of Annex VI and to coordinate interagency compliance enforcement efforts.

The MOU

Under the MOU, the Coast Guard and EPA agreed to a number of provisions concerning compliance and enforcement actions aimed at installed marine engines, ships, and shoreside facilities that supply marine fuel and/or received ozone depleting substances ("ODS"), which are also regulated under Annex VI. The Coast Guard and EPA agreed to jointly develop protocols for ship examinations, facility inspections, and the conduct of investigations utilizing each agency's expertise.

EPA will develop protocols for installed engine inspections and review of documentation associated with fuel oil quality (Annex VI requires low sulfur fuel) and availability. The Coast Guard will then adapt the EPA protocols into its established ship and facility inspection programs. The two agencies agreed to share information about inspections, examinations and investigations and the EPA further agreed to notify the Coast Guard whenever an Engine International Air Pollution Prevention ("EIAPP") certificate is modified, revoked or otherwise becomes invalid. If...