Explanatory Memorandum to COM(2000)142-4 - Accelerated phasing-in of double hull or equivalent design requirements for single hull oil tankers

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This page contains a limited version of this dossier in the EU Monitor.

GENERAL INTRODUCTION

1. Actual situation and problems:

The major consequences of accidental oil spills caused by oil tankers, as recently demonstrated with the structural failure of the ERIKA off the French coast, remain an issue of major concern for the European Commission.

In a follow-up to the pollution accidents with the oil tankers 'Aegean Sea' off la Coruña in December 1992 and the 'Braer' off the Shetland Islands in January 1993, the Commission issued its Communication 'a common policy on safe seas' i. This communication took stock of the existing situation with regard to maritime safety and the prevention of pollution of the marine environment. It underlined in particular the request of the extraordinary Council on Environment and Transport of 25 January 1993 to support the action in the International Maritime Organisation (IMO) on the reduction of the safety gap between new and existing ships by upgrading and/or phasing-out existing ships, built to earlier standards, after a reasonable period of operation. This request stressed the need of paying particular attention to oil tankers not meeting the international standards on segregated ballast tanks and their protective location as laid down in the International Convention for the Prevention of Pollution from Ships, 1973 and the Protocol of 1978 related thereto (MARPOL 73/78).

A first, regional decision concerning the phasing-out of single hull oil tankers was taken in 1990 by the United States, when they promulgated the Oil Pollution Act (OPA 90) in which double hull requirements both for new and existing tank vessels have been established. The application of the OPA 90 double hull requirement to existing tank vessels is dependent on the age, the size in gross tons and hull configuration of the vessel. Basically two main categories can be distinguished.

The first category of tankers will not be allowed under OPA 90 to operate in US waters after 1 January 2010 unless they comply with the double hull requirements. This category includes all existing single hull oil tankers above 5000 GT without double bottom or double sides. In the period from 2005 to 2010, such single hull oil tankers will not be longer allowed to operate in US waters when they reach an age of 25 years, or 23 years for tankers above 30000 GT, unless they comply with the double hull requirements.

The second category of tankers will not be allowed under OPA 90 to operate in US waters after 1 January 2015 unless they comply with the double hull requirements. This category includes existing single hull oil tankers above 5000 GT fitted with double bottom or double sides, and all existing single hull oil tankers below 5000 GT. In the 10 years preceding the deadline of 2015, tankers above 5000 GT are phased out when they reach the age of 30 years, and 28 years for tankers above 30000 GT. For tankers below 5000 GT, no phasing-out age limits are specified.

Faced with the unilateral decision by the USA, the IMO had to take action to also reduce at international level the safety gap between new and existing oil tankers, resulting in July 1993 in the entry into force of important amendments to the MARPOL 73/78 Convention. More rigorous measures concerning the design and construction standards for new and existing oil tankers were included in these amendments. These design and construction standards aimed at providing a better protection against oil pollution in the event of collision or stranding. They require that oil tankers delivered on or after 6 July 1996 comply with the double hull or equivalent design requirements laid down in Regulation 13F of Annex I of the MARPOL 73/78 Convention.

In addition, the amendments to the MARPOL 73/78 Convention included also a phasing-in scheme for single hull oil tankers above 20000 tons deadweight, delivered before 6 July 1996. According to Regulation 13G, such tankers have to comply with the double hull or equivalent design standards of Regulation 13F of Annex I of the MARPOL 73/78 Convention not later than 25 years, or in some cases 30 years, after their date of delivery. As a consequence, existing single hull oil tankers that do not meet the requirements concerning segregated ballast tanks and their protective location will, at international level, no longer be allowed to operate beyond 2007, or in some cases 2012, unless they comply with the double hull or equivalent design requirements of Regulation 13F of Annex I of the MARPOL 73/78 Convention. For existing single hull oil tankers complying with these requirements on segregated ballast tanks and their protective location this deadline will be reached at the latest in 2026.

The differences in age limits and end-dates between the OPA 90 phasing-out scheme and the one established at international level through the amendments to the MARPOL 73/78 Convention will, from 2005 onwards, have as a consequence that single hull oil tankers not longer allowed to operate in US waters because of their age, may shift their trading patterns to other regions in the world, including the European Union, and continue operating until they have to comply with the double hull requirements in accordance with the age limits provided for in the MARPOL 73/78 Convention. This changing trading patterns will result into a situation where the oldest single hull oil tankers which under the MARPOL 73/78 Convention are allowed to continue operating, will become more dominantly present in the oil trades to and from and within the European Union.

A study on the environmental impact of single hull oil tankers carried out in 1999 for the Commission services addressed the effects of OPA 90 on the tanker fleet operating outside the USA. The study's estimations show that during the period 2000 to 2025 on average 15% of the crude oil tankers will be banned from US waters but still allowed to operate under the MARPOL 73/78 Convention. It also noted that there will be in 2010 a distinct maximum in the number of crude oil tankers of less than 20000 tons DWT banned from the USA, due to the end date limit of 2010 in OPA 90. For crude oil tankers in excess of this size the maximum increase in numbers diverted to Europe will be reached in 2015. The study estimates further that OPA 90 will have less pronounced effects for oil product tankers. For oil products tankers in the 5000 to 30000 tons deadweight category, the maximum of diverted ships will be reached in 2015, whilst for the larger size category this maximum will be reached in 2005.

2. Proposed action at Community level:

The Commission is of the opinion that the situation described above should give rise to concern, since accident statistics reveal increasing accident rates for older ships. An appropriate Community response to this situation is considered necessary, in particular in view of the nearing of the year 2005, the first important cut-off date under OPA 90 at which certain single hull oil tankers will be banned from US waters. In order to avoid that such tankers start or continue trading to European ports, an accelerated application in the Community of the phasing-in scheme of the double hull or equivalent design requirements of Regulation 13 F of Annex I of MARPOL 73/78 is proposed. This accelerated phasing-in scheme has to be aligned with the age limits and end-date limits provided for in OPA 90, to avoid that oil tankers banned from the US under the OPA 90 regime, could shift their trading patterns to Europe.

As regards to size and hull configuration criteria, the proposal maintains the distinction made in the MARPOL 73/78 Convention between three main categories. Category 1: so-called 'pre-MARPOL' single hull oil tankers, being crude oil tankers of 20000 tons deadweight and above and oil product carriers of 30000 tons deadweight and above having no segregated ballast tanks in protective locations (SBT/PL). Category 2 is including 'MARPOL' single hull tankers, being of the same size as category 1, but which are equipped with SBT/PL. Category 3 contains single hull oil tankers below the size limits of categories 1 and 2, delivered before 6 July 1996, and therefore not subject to the phasing-in scheme for the double hull requirements laid down in Regulation 13G of Annex I of MARPOL 73/78.

The Commission proposes the following approach for each of these categories.

For category 1 the proposal envisages to lower the age limits of 25 or 30 years provided for in the MARPOL 73/78 Convention to one single age limit of 23 years. Since these single hull oil tankers were delivered before the date the SBT/PL requirements of MARPOL 73/78 started to apply (1982), a final deadline in 2005 is specified to prevent that they would continue operating beyond the proposed age limit of 23 years. In addition, the waiver possibility provided for in Regulation I/13G i of Annex I of MARPOL 73/78 to accept other structural or operational arrangements, such as hydrostatic balanced loading, as an alternative to the double hull requirements, should not be allowed. This limitation is necessary to avoid that tankers that have reached their age limit can continue operating beyond this age limit by using other arrangements than the double hull or equivalent design configuration.

For category 2 the proposal specifies compliance with the double hull or equivalent design requirements not later than when they reach the age of 28 years or on 1 January 2010, whichever of these dates comes first.

Finally for category 3, the Commission proposes to introduce an age limit of 25 years when the tankers are not equipped with SBT/PL and 30 years when they are, combined with an end date limit of 1 January 2015 beyond which no single hull oil tanker of that category will be allowed to trade to European ports.

Since this proposal for an accelerated phasing-in scheme at Community level is aligned with the age and end-date limits in OPA 90, single hull oil tankers banned from US waters will not be able to shift their trading patterns to Europe.

By applying the same end-date limits as in OPA 90, the EU system will result into a considerable shorter phasing-in period, having an important, but at this stage not quantified in detail, impact on the rate at which single hull oil tankers will have to be replaced by double hull tonnage. First estimates, based on available statistics on the composition of the world tanker fleet today, indicate that the impact for categories 2 and 3 will be considerable.

Category 2 contains today about 2000 single hull ships (worldwide). In addition, 1000 double hulled tankers are available in this size category. In the proposed EU system, about 70% of these 2000 ships will have to be phased out on age limit (28 years) before 2010, and about 30% of them (+/- 600 ships) on deadline in 2010.

Category 3 totals today about 3000 single hull tankers. In this size category only 300 double hull tankers are available today, due to the lack of any age or deadline limit in the MARPOL 73/78 Convention for replacing the existing single hulls by double hulls. The proposed EU system, combining age limits (25 or 30 years) with the deadline of 2015, will have the following impact: 70% (+/- 2000 ships) will have to be phased out before 2015 on age limit, whilst the remainder 30% (+/- 1000 ships) will have to be phased out on deadline in 2015. In view of the large number of ships that will have to be phased out on deadline in 2010 and 2015, the continuity of oil supply and distribution in Europe could be temporary disturbed if there were no sufficient double hull tonnage. However it is recognised between the major shipbuilding associations (AWES in Europe, SAJ in Japan and KSA in South Korea) that for the foreseeable future supply of merchant vessels will exceed demand. Today this excess capacity is estimated to be ca. 3-4 Mio cgt, which if it were used for the construction of double hull tankers, would represent ca. 10,42-13,89 million tons deadweight and be able to cope with the increased demand arising from this proposal.

The attached proposal provides that compliance with the accelerated phasing-in of the double hull or equivalent design standards for single hull oil tankers should be imposed to oil tankers of 600 tons deadweight and above, flying the flag of a Member State and as a condition for access to EU ports, irrespective of the flag the ships fly.

3. Accompanying measures:

As an accompanying measure to the phasing-in of the double hull or equivalent design standards for single hull oil tankers, a system of financial incentives and disincentives is proposed to encourage the trade of double hull oil tankers to and from and between ports in the Community, and to discourage the trade of single hull oil tankers. This system should be based upon the principles established in Council Regulation (EC) No 2978/94 of 21 November 1994 on the implementation of IMO Resolution A.747(18) on the application of tonnage measurement of ballast spaces in segregated ballast oil tankers i (SBT Regulation). These principles foresee the application of reduced port and pilotage dues for the most environmentally friendly oil tankers as opposed to those offering less protection against oil pollution.

However, the SBT Regulation does not take into account the higher level of protection against accidental oil pollution that double hull oil tankers offer as compared to single hull oil tankers, and does not differentiate between double hull oil tankers and single hull oil tankers with regard to the reduction of port and pilotage dues. Moreover, in view of the proposed deadline of 2005 for single hull oil tankers not complying with the requirements of MARPOL 73/78 on segregated ballast tanks and their protective location, there are no justified reasons to maintain any longer the differential financial treatment system the SBT Regulation provides between such oil tankers and tankers that do comply with the SBT/PL requirements of MARPOL 73/78.

The attached proposal therefore foresees revoking the SBT Regulation and to incorporate a new financial incentive system that during the period of the accelerated phasing-in scheme encourages the operation of oil tankers complying with the double hull or equivalent design requirements and to discourage the operation of oil tankers not complying yet with these requirements. This new system should be a combined system providing a reduction on port and pilotage dues for oil tankers complying with the double hull or equivalent design standards and applying a surcharge on the port and pilotage dues for oil tankers not yet complying with these standards.

In establishing this combined incentive/disincentive system, a fair balance should be aimed at to avoid loss of revenues for the providers of port and pilotage services and to avoid that such losses would be at the detriment of the quality of these services or need to be compensated by raising port and pilotage dues for ships unconnected with the transport of oil and oil products. In view of the progressive increase of the number of double hull or equivalent design oil tankers and the decrease of the number of single hull oil tankers over the period of the envisaged accelerated phasing-in scheme, the balance in revenues for port and pilotage service providers has to be achieved by making the reduction on port and pilotage dues for double hull or equivalent design oil tankers regressive with their age and the surcharge on port and pilotage dues for single hull oil tankers progressive with the ship's age.

The percentages of these reductions and surcharges laid down in the proposal should be adaptable through Comitology procedure to take account of the rate at which single hull oil tankers are replaced by double hull tonnage may change over the period of the accelerated phasing in. Finally the proposal provides that the differential charging will cease to be applied when the accelerated-phasing in scheme for the double hull or equivalent design standards has been fully accomplished.

A second accompanying measure provided for in the proposal is to notify to the IMO the Community legislation on the accelerated phasing-in of the double hull or equivalent design standards for single hull oil tankers, once it is adopted. Such a notification would comply with the provisions of Article 211 of UNCLOS. Paragraph 3 of UNCLOS article 211 provides the right to coastal states for imposing particular requirements as a condition for the entry of foreign vessels into their ports or internal waters or for a call at their off-shore terminals. It stipulates further that due publicity to such requirements shall be given and that they shall be communicated to the competent international organisation and that this communication should mention the States which are applying the same requirements in the context of a co-operative arrangements.

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JUSTIFICATION FOR A REGULATION


4. a) What are the objectives of the envisaged action in relation to the obligations of the Community and what is the Community dimension of the problem (for instance how many Member States are involved and what is the present solution)-

The Treaty provides for the establishment of a common transport policy and the measures envisaged to implement such a policy include measures to improve safety in maritime transport as foreseen in Article 80 i.

To this end, the main objective of the envisaged action is to implement in the Community, in a harmonised way, an accelerated phasing-in of the double hull or equivalent design standards of the MARPOL 73/78 Convention for single hull oil tankers. A harmonised and advanced implementation at Community level of these standards is considered necessary to ensure that oil tankers trading to and from and between ports of the Member States comply as quickly as possible with the double hull or equivalent design standards in order to reduce the risks of accidental oil pollution and its consequences in European waters.

Although not all Member States are concerned with the conditions of access for oil tankers due to their lack of coastline and ports, the Regulation will affect all Member States to a certain extent, since all Member States may have oil tankers flying their flag.

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5. b) Is the envisaged action solely the responsibility of the Community or is the responsibility shared with the Member States-


It is a responsibility shared between the Community and the Member States.

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6. c) What is the most efficient solution taking into account the resources of the Community and the Member States-


In view of the internal market dimension of maritime transport, an action at Community level is the only possible way to ensure that the same level of safety and marine pollution prevention is guaranteed by oil tankers trading to and from and between European ports, while reducing the risks of distortion of competition between ports due to the application of divergent principles for charging port and pilotage dues.

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7. d) What is the concrete added value of the action envisaged by the Community and what would be the cost of inaction-


The Community has a major interest in ensuring that the transport by sea of oil and oil products necessary for its economy is carried out in the safest and most environmentally friendly way, to avoid the detrimental consequences of oil pollution. A harmonised action is necessary to avoid distortion of competition between oil tankers already complying with the latest international requirements concerning accidental oil pollution prevention and those tankers, which do not do so yet. These standards have been internationally agreed but the relevant international Convention in which they are embedded does not ensure for their harmonised and simultaneous application. Their implementation in the Community can only be assured through the establishment of an enforceable and harmonised Community framework.

The cost of inaction would be that the rate of pollution accidents and the seriousness of their consequences caused by the structural failure or damage of single hull oil tankers would remain unacceptably high. Furthermore, if no harmonised and accelerated phasing-in of the double hull or equivalent design standards for these oil tankers is established within the Community, the risk of substandard and over-aged oil tanker tonnage shifting its trade patterns from areas such as the United States, where stricter safety policies are applied, to Europe cannot be deterred.

Also, inaction could entail a risk of distortion of competition between ports through the application of diverging criteria for charging port and pilotage dues to oil tankers, without giving due consideration to the enhanced protection against accidental oil pollution double hull or equivalent designs are offering as opposed to single hull oil tankers.

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8. e) What forms of actions are available to the Community- (recommendation, financial assistance, regulation, mutual recognition)


Since the internationally agreed requirements for single hull oil tankers to comply with the double hull or equivalent design standards are providing to a large extent freedom of interpretation and application to the flag State administration and also exclude a considerable number of existing oil tankers from their scope of application, they are not enforceable in a unified and harmonised way ensuring a fast replacement of all single hull oil tankers by double hull oil tankers. In addition, the possibilities for waivers leading to a lack of or a divergence in implementing these international standards could result in a distortion of competition. Hence it is necessary to ensure a harmonised and accelerated application of these internationally agreed standards, in the form of a Regulation.

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9. f) Is uniform legislation necessary or does a Directive setting the general objectives and leaving the execution to the Member States suffice-


Uniform legislation in the form of a regulation is necessary for the reasons set out above. In accordance with the principle of proportionality, the proposed Regulation will establish at Community level the age and dates at which single hull oil tankers have to comply with the internationally agreed double hull or equivalent design standards, as well as a uniform approach for a differential charging system for port and pilotage dues to be applied to single and double hull oil tankers visiting European ports.

The actual differential charging system for port and pilotage dues embedded in Council Regulation (EC) No 2978/94 of 21 November 1994 on the implementation of IMO Resolution A.747(18) on the application of tonnage measurement of ballast spaces in segregated ballast oil tankers i cannot longer be continued since it makes no distinction between single hull and double hull oil tankers having both segregated ballast tanks. The most appropriate approach is to revoke this Regulation and replace it by a new one, in which also the accelerated phasing-in scheme is incorporated and linked with a new differential charging system. Acting by way of a Directive would, in addition, require for an additional period for transposing its provisions in the national legislation of the Member States, resulting in a further delay for implementing the accelerated phasing-in scheme.

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CONTENT OF THE REGULATION


10. The proposed Regulation specifies the age limits and end-dates by which single hull oil tankers have to comply with the double hull or equivalent design requirements of Regulation 13F of Annex I of the MARPOL 73/78 Convention. The age limits proposed are either lower than the ones specified in Regulation 13G of Annex I of MARPOL 73/78 or apply to categories of tankers which because of their size are not covered by that Regulation. The end-date limits specified aim at avoiding that single hull oil tankers can continue or start trading to European ports after the end-date limits beyond which they are not longer allowed to operate in the waters falling under the jurisdiction of the United Sates. Compliance of these requirements will be imposed as a condition of access to ports of the Member States for all oil tankers of 600 tons deadweight and above, irrespective of the flag they fly. Further, all oil tankers of that size category, flying the flag of a Member State will have to comply with the accelerated phasing-in scheme of the double hull or equivalent design standards.

11. In addition, and as a complementary measure, the proposal foresees the replacement of the actual differential charging system for port and pilotage dues as laid down in Council Regulation (EC) No 2978/94. The existing system has to be abolished, since it does not provide for a differentiation in the charging of port and pilotage dues between single hull and double hull oil tankers both equipped with segregated ballast tanks. Moreover, the accelerated phasing-in system will lead to the disappearance of single hull oil tankers without segregated ballast tanks as soon as in 2005, and therefore there will be no reasons to prolong the actual system beyond that date. The new financial system for differential charging of port and pilotage dues proposed foresees a reduction of these dues for double hull oil tankers, but the reduction should be regressive with the ship's age. For single hull oil tankers a surcharge on the dues is applied, progressive with ship's age. The proposal specifies that this differential charging system should cease to be applied, once the phasing-in of the double hull or equivalent design standards for single hull oil tankers is fully accomplished.

12. Finally, the proposed Regulation provides for its notification to IMO, once it has been adopted. The purpose of this notification is to inform the international maritime community about the new rules of play in the Community for trading with oil tankers to and from and between ports of the Member States.

13. The proposal provides also for a mandate to the Commission, subject to Comitology, for amending the Regulation to take account of amendments to the relevant international instruments, as well as for adjusting the percentages of the reductions and surcharges in the differential charging system, to take account of possible fluctuations in the rate at which the replacement of single hull tonnage by double tonnage is taking place over the phasing-in period.

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SPECIAL CONSIDERATIONS


Article 1

The purpose of the Regulation: to raise the safety and pollution prevention standards for oil tankers operating to and from and between ports of the Member States to reduce the risks of accidental oil pollution due to collision or grounding.

The way to achieve this objective is through accelerating the timing by which single hull oil tankers have to comply with the double hull or equivalent design standards of Regulation 13F of Annex I of MARPOL 73/78. As an accompanying measure the Regulation also provides fore a differential charging system for port and pilotage dues between single hull and double hull or equivalent design tankers.

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Article 2


This Article defines the scope of application of the Regulation. It covers all oil tankers of 600 tons deadweight and above, irrespective of the flag they fly, when calling at Community ports and all oil tankers of that size flying the flag of a Member State.

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Article 3


This Article contains the definitions of the key concepts of the Regulation, which are mainly derived from the relevant definitions in the International Convention for the Prevention of Pollution from Ships (MARPOL 73/78).

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Article 4


Article 4 lays down the age limits and date limits by which single hull oil tankers have to comply with the double hull or equivalent design standards of the MARPOL 73/78 Convention. Depending on the size and configuration of the tankers, the age limits vary between 23 to 30 years and the end-date limits between 2005 and 2015. In addition, paragraph 2 of this article specifies that for the purpose of complying with this article, the waiver possibility provided for in Regulation 13G i of Annex I of MARPOL 73/78 to accept other structural or operational arrangements as alternatives for compliance with the double hull or equivalent design requirements of Regulation 13F of Annex I of MARPOL 73/78, shall not be accepted.

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Article 5


This article establishes the differential charging system for port and pilotage dues between single hull and double hull or equivalent design tankers, based upon the application of a reduction of these dues for double hull or equivalent design tankers, which is regressive with the age of the ship. For single hull oil tankers, not yet complying with the double hull or equivalent design standards, a surcharge on the port and pilotage dues has to be applied which is progressive with the ship's age. Where charging systems for port and pilotage dues are based upon another criterion than deadweight, they have to ensure that at least the same percentage for the reductions and surcharges is applied as in the system based upon deadweight. Finally, the article specifies that the differential charging system shall cease to be applied once the accelerated phasing-in of the double hull or equivalent design standards has been fully accomplished.

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Article 6


Article 6 provides for the notification to IMO of the adoption of this Regulation. This notification aims at providing the international maritime community with information on the new rules of play for trading with oil tankers to and from and between ports of the Community.

The United Nations Convention on the Law of the Sea (UNCLOS) provides in its Article 211, concerning pollution from vessels, the right to coastal states to impose particular requirements as a condition for the entry of foreign vessels into their ports or internal waters or for a call at their off-shore terminals. It stipulates further that due publicity to such requirements shall be given and that they shall be communicated to the competent international organisation and that this communication should mention the States which are applying the same requirements in the context of a co-operative arrangements. The notification to the IMO of the adoption of this Regulation aims at meeting this provision of UNCLOS.

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Article 7


Article 7 contains provisions on monitoring and reporting on the implementation of the Regulation. It provides that Member States regularly verify that port and pilotage authorities correctly apply the differential charging system for port and pilotage dues as provided for in Article 5. Member States are required to report annually to the Commission on the results of their verification, and this within 4 months after each year upon which is reported.

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Article 8


The establishment of a regulatory Committee is incorporated in this article, including also a reference to the procedures of article 5 of Council Decision 1999/468/EC i, in accordance with which it has to act. The article also fixes the period for the Council to act in accordance with the provisions of paragraph 6 of that article to 3 months.

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Article 9


This Article provides the right for the Commission to amend the Regulation and its Annex, in accordance with the procedure laid down in Article 8, to update the references to the relevant Regulations of MARPOL 73/78 in line with any subsequent amendments that may be adopted to these Regulations.

It also provides under the same procedure for the adjustment of the percentage of reductions and surcharges on port and pilotage dues to be applied, to take into account variations in the rate at which the replacement of single hull oil tankers by double hull or equivalent design tankers will take place during the phasing-in period.

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Article 10


In view of the new differential charging system for port and pilotage dues established in Article 5, the existing differential charging system laid down in Council Regulation (EC) No 2978/94 has to be abolished. The existing system provides for differential port and pilotage dues between oil tankers equipped with segregated ballast tanks in protective locations (SBT/PL) and those without. However, by using only the SBT/PL criterion, it does not provide for any differentiation between single hull and double hull or equivalent design tankers.

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Articles 11 and 12


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Annex

The annex to the regulation specifies the percentages of the reductions and surcharges on port and pilotage dues to be applied in function of the ship's age.