See our updated newsflash on this topic here.
In around 2014, the South African Maritime Safety Authority (SAMSA) spearheaded the establishment of an offshore bunkering industry in Algoa Bay, South Africa, ostensibly to generate economic activity in the region in line with the prevailing government policy.
While initially conceived as an off-port limits operation, the weather conditions compelled operators to bring their services within the ports of Ngqura and Port Elizabeth, as authorised under permits issued by Transnet National Ports Authority (TNPA)
In September 2023, the industry was dealt a serious blow when all operators had vessels detained and (in some cases) seized by the South African Revenue Service (SARS), on allegations of contravention of the Customs and Excise Act. This action was, for the most part, a consequence of the fact that the establishment of the industry was never accompanied by a fit-for-purpose customs and excise regime.
For almost a decade, the tax treatment of fuel brought into South Africa and then exported by means of bunkering foreign-going vessels was uncertain. The position adopted by SARS to solve the problem was, first, to shut down all operators and, second, to introduce new regulations to allow operators to provide services in a legally compliant manner. More specifically, SARS adopted a ‘floating bonded warehouse regime’, by amending the Rules under sections 21, 60 and 120 of the Customs and Excise Act in November 2024.
Green shoots have since emerged with one of the former operators returning to Algoa Bay this year.
Against that backdrop, we have received notification that a different branch of government – the Ministry of Forestry, Fisheries and the Environment – published draft regulations on 21 February 2025 for the environmental management of offshore bunkering under the National Environmental Management: Integrated Coastal Management Act. Any comments on these draft regulations must be made to the Department within 30 days of publication.
A copy of the draft regulations is available from the South African Government’s website here.
They apply to, amongst others, bunker operators approved by SAMSA. Key provisions include requirements that: Â Â
- The number of bunkering operators who may operate within Algoa Bay be limited to a maximum of five, and each bunker operator may only operate one vessel within the Bay (draft Regulation 3(5));
- No bunkering is permitted between the hours of sunset and sunrise (draft Regulation 3(2));
- Bunkering may only be undertaken in suitable weather conditions, where the wind force is below 25 knots and the average wave height is below 0.5 meters (draft Regulation 6(2));
- Wildlife must be monitored in accordance with draft Regulation 5;
- Crew members must receive prescribed environmental awareness training before participating in bunkering operations and on a regular basis thereafter, in accordance with draft Regulation 8; and
- Bunker operators may not undertake bunkering without an environmental management plan that has been developed by an independent specialist and approved by the Minister in accordance with draft Regulation 11.
Given their scope of application, the harmonisation and integration of the draft regulations with a host of existing rules and regulations adopted by SARS, SAMSA and TNPA (see, for example, SAMSA’s website here) is of critical importance.
For example, the new SARS rules contemplate a model whereby fuel brought into South Africa for bunking vessels is stored in a vessel designated and licensed as a floating storage unit, and that such fuel may only be transferred to the recipient vessel, as bunkers, by a barge that is licensed as a remover of goods in bond. In other words, the model contemplated by SARS appears to be that the operator must, at the very least, make use of two vessels. This is in direct conflict with the requirement under the draft environmental management regulations that bunker operator may only operate one vessel within Algoa Bay.
On 4 July 2025, the Minister of Forestry, Fisheries and the Environment published revised draft regulations for the environmental management of offshore ship-to-ship transfers for public comment within 30 days. A copy of the revised draft regulations is available from the South African Government’s website here.
