CLC/Fund regime and the Bunkers Convention.
28 Another conspicuously significant provision in the scheme of the HNS Convention is that the HNS Fund consists
of four separate accounts, one of which is specially identified as the LNG account.
29
It would have been ideal if the Conventions covered both LNG carried on board
as cargo and as bunker, but notably, the Convention covers only LNG carried as
cargo although the definition of “HNS” is broad.
30 As defined in the Convention,
“HNS” includes packaged goods, bulk solids, liquids and liquefied gases, and is
largely based on lists of substances that have been previously identified in a number
of IMO Conventions and Codes that were designed to ensure maritime safety and
marine environmental prevention.
31 The inclusion of LNG as an “HNS” is provided
in Article 1(5)(a)(v) of the Convention. According to Article 1(5)(a) and (b), the
application of the Convention is limited to HNS carried on board a ship as cargo, or
as residues from their previous carriage in bulk.
It is to be observed in this context that pursuant to Chapter 16 of the IGC Code,
LNG carried as cargo may be used as fuel, but arguably, whereas liability for damage
caused by LNG when it is cargo is covered by the HNS Convention, when it is
transferred to the ship’s bunkers to be used as fuel, the liability regime of that
convention will not apply. Equally relevant is the fact that there is no liability regime
under the Bunkers Convention for damage caused by LNG used as fuel.
32 As such,
there exists a legal lacuna as the current liability and compensation legal regimes in
the international domain does not govern LNG used as a fuel. It has been
recommended in a previous study that the most feasible option to filling the lacuna
would be to amend the HNS Convention to include LNG used as fuel in the
definition of “Hazardous and noxious substances”.
33 This would avoid the need
for amending the definition of “damage” in the Convention as it is broad enough to
include the possible damage that may be caused by spills of LNG carried on board a
ship as fuel.
4 Greenhouse Gas (GHG) Emissions and LNG Implications
Thus far, the discussion in this chapter has been predicated on the usefulness of LNG
as a marine fuel based on the fact that LNG produces virtually negligible quantities
of SOx. Be that as it may, concern over sulfur content expressed through the IMO
28 Xu (2013), p. 110.
29 See IOPC Fund (2019), p. 7, paragraph 44.
30 See Article I paragraph 5, subparagraph (a) items (i) to (vii), paragraph (b) referring to residues
from previous carriage in bulk; paragraph 5 bis providing definition of “bulk HNS”; and paragraph
5 ter providing definition of ‘packaged HNS’.
31 Xu (2013), p. 122.
32 See Xu et al. (2017), pp. 140–141.
33 Xu et al. (2017).
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28 Another conspicuously significant provision in the scheme of the HNS Convention is that the HNS Fund consists
of four separate accounts, one of which is specially identified as the LNG account.
29
It would have been ideal if the Conventions covered both LNG carried on board
as cargo and as bunker, but notably, the Convention covers only LNG carried as
cargo although the definition of “HNS” is broad.
30 As defined in the Convention,
“HNS” includes packaged goods, bulk solids, liquids and liquefied gases, and is
largely based on lists of substances that have been previously identified in a number
of IMO Conventions and Codes that were designed to ensure maritime safety and
marine environmental prevention.
31 The inclusion of LNG as an “HNS” is provided
in Article 1(5)(a)(v) of the Convention. According to Article 1(5)(a) and (b), the
application of the Convention is limited to HNS carried on board a ship as cargo, or
as residues from their previous carriage in bulk.
It is to be observed in this context that pursuant to Chapter 16 of the IGC Code,
LNG carried as cargo may be used as fuel, but arguably, whereas liability for damage
caused by LNG when it is cargo is covered by the HNS Convention, when it is
transferred to the ship’s bunkers to be used as fuel, the liability regime of that
convention will not apply. Equally relevant is the fact that there is no liability regime
under the Bunkers Convention for damage caused by LNG used as fuel.
32 As such,
there exists a legal lacuna as the current liability and compensation legal regimes in
the international domain does not govern LNG used as a fuel. It has been
recommended in a previous study that the most feasible option to filling the lacuna
would be to amend the HNS Convention to include LNG used as fuel in the
definition of “Hazardous and noxious substances”.
33 This would avoid the need
for amending the definition of “damage” in the Convention as it is broad enough to
include the possible damage that may be caused by spills of LNG carried on board a
ship as fuel.
4 Greenhouse Gas (GHG) Emissions and LNG Implications
Thus far, the discussion in this chapter has been predicated on the usefulness of LNG
as a marine fuel based on the fact that LNG produces virtually negligible quantities
of SOx. Be that as it may, concern over sulfur content expressed through the IMO
28 Xu (2013), p. 110.
29 See IOPC Fund (2019), p. 7, paragraph 44.
30 See Article I paragraph 5, subparagraph (a) items (i) to (vii), paragraph (b) referring to residues
from previous carriage in bulk; paragraph 5 bis providing definition of “bulk HNS”; and paragraph
5 ter providing definition of ‘packaged HNS’.
31 Xu (2013), p. 122.
32 See Xu et al. (2017), pp. 140–141.
33 Xu et al. (2017).
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