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Long-term environmental costs riding on MEPC 71

07 July 2017 IHS Markit Maritime & Trade Expert

This story originally published on

Shipowners concerned about the costs of environmental regulations on vessel operations have a lot at stake in London next week.

The 71st session of IMO Marine Environment Protection Committee (MEPC 71), to be held at IMO headquarters on 3-7 July, is set to consider new proposals within the Ballast Water Management Convention as well as the agency's carbon reduction "roadmap" - two issues that will affect owner decisions on long-term compliance strategies.

One of the weightiest of the proposals before the committee is whether to delay implementation of the Ballast Water convention, which enters into force on 8 September and affects some 40,000 cargo vessels, to give shipowners until 8 September 2019 to install ballast water treatment systems on their ships. A compromise proposal, submitted by five flag states earlier this year, would require newbuildings to hold to the 2017 enforcement date.

Combined with a stipulation in an amendment that allows installation to be further delayed until after the vessel's first International Oil Pollution Prevention certificate renewal (typically every five years) after the convention enters into force, the delay would push out the date on which all ships must have a ballast water system installed to 2024.

"If this pragmatic proposal is agreed, this would allow shipping companies to identify and invest in far more robust technology to the benefit of the marine environment," said International Chamber of Shipping (ICS) Secretary General Peter Hinchliffe.

Ballast water equipment manufacturers, on the other hand, many of which are relying on forward orders from shipowners to remain financially viable, are frustrated by the calls for delay.

"They've had over a decade [since the convention was adopted in 2004] to figure out how to adapt to these rules, and now they want to further delay," one manufacturer, who asked not to be identified, told Fairplay.

Dry bulk owners are concerned that the technology in ballast water systems currently available are not able to address topside ballast water tank requirements specific to most bulkers. INTERCARGO, which represents bulker owners, wants IMO to consider allowing these vessels "extended ballast water exchange" solely for these types of tanks.

"The regulation in place should respect the highly capital intensive nature of the industry and avoid distorting the market's level playing field by marginalising thousands of viable and quality bulk carriers," the group said in a statement on 29 June.

Shipowners have placed some of the blame for the lack of available systems with the US Coast Guard. Ballast water manufacturer Optimarin became the first supplier to receive US certification last September, after years of testing. The universe of US-backed systems quickly expanded to three when two more systems were approved in December. As of 29 June there were four systems certified for vessels that want to trade in the United States.

With US-approved systems, however, came a much stricter regime from the coast guard, beginning in February, for extending compliance dates for individual vessels. The new guidance meant that owners and operators may have to pay USD300,000-500,000 for drydocking services separate from the purchase and installation of the ballast water equipment, which have been estimated to cost from USD500,000 up to USD5 million.

In addition to proposals from industry, the committee will be considering draft amendments to the ballast water convention that would make mandatory the IMO's G8 equipment testing guidelines, which were adopted at MEPC 70 last October.

That last meeting also approved a "road map" for reducing carbon emissions in shipping - another major item on the MEPC 71 agenda - which was praised by shipowners for adding details to an overall climate change policy for the industry. The IMO aims to establish an initial strategy in 2018 and finalised in 2023 or earlier after real-time data on carbon emissions from global shipping have been collected and analysed.

Since MEPC 70 shipowners, as well as the IMO itself, have been trying to dissuade the European Parliament from tying the maritime industry into the European Union's emissions trading system, which the industry sees as onerous and disruptive to the IMO's own climate change strategy.

Shipowners believe that ongoing threat can be reduced by furthering the IMO's carbon reduction scheme at MEPC 71. ICS, with shipowner groups BIMCO, INTERCARGO, and INTERTANKO, submitted a proposal for discussion at next week's meeting that would keep total global carbon emissions from ships below 2008 levels, then progressively cutting annual total emissions from the sector by 2050.

According to the IMO, following the completion of the review of the status of technological developments relevant to implementing phase 2 of the Energy Efficiency Design Index (EEDI) requirements from 2020, MEPC will consider a proposal to review the requirements for ro-ro cargo and ro-ro passenger ships. The committee will also consider the development of a possible methodology to review the EEDI requirements beyond phase 2, the IMO noted.

Draft guidelines on flag state administration data verification procedures, and on the development and management of the IMO Ship Fuel Oil Consumption Database, will be on the agenda at MEPC 71 as well.

The World Shipping Council (WSC), which represents container ship operators, is leading a charge to promote research and development, funded through a new research board, to find alternatives to cutting carbon emissions, such as improving marine propulsion systems and ship designs. Their proposal for MEPC 71 consideration was submitted in May.

Bryan Wood-Thomas, WSC's vice-president for environmental policy, told Fairplay, "Our view is that whatever we spend to reduce carbon emissions needs to be in our assets, our vessels, so that we do something about the problem and get something out of our investment."



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