In International Shipping News,Shipping: Emission Possible 28/06/2016
Source: DNV GL, Bulk Carrier Update, No1 2015
Over the past decade, shipping has seen a surge of environmental regulations. Political pressure and an increasing focus from society at large have driven the International Maritime Organization (IMO), various countries and regions such as the EU to develop steadily more stringent regulations. The consequence is a patchwork regulatory system, where numerous overlaps create challenges for operators. There are unfortunately no indications that this will change. It is important for operators to both understand the existing regulatory framework and be aware of forthcoming developments, both at IMO and elsewhere, in order to make the right business decisions.
Ballast water management
Ballast water management has been a hot topic for a number of years. At present, the Ballast Water Management (BWM) Convention is only 0.21 per cent short of the gross tonnage ratiication threshold. Several states have announced imminent ratiication, and DNV GL believes the threshold is likely to be crossed sometime this year. The convention will then enter into force one year later, requiring all ships to comply within the following ive years. The content and interpretation of the convention are still evolving. Presumably the IMO Marine Environment Protection Committee (MEPC) 70 will inalize the revision of the technical guidelines in October. There are presently 65 IMO-approved BWM systems on the market.
The national ballast water management regulations of the United States entered into force in 2013. New ships now have to comply upon delivery, while existing ships must comply by the irst scheduled dry docking after 1 January 2014 or 2016, depending on ballast water capacity. US type approval is required for the ballast water treatment systems of affected ships; so far no such approvals have been granted. To address the obviously paradoxical situation of having to install approved systems when none have obtained type approval, the US Coast Guard (USCG) has issued more than 50 so-called Alternate Management System (AMS) approvals for systems accepted by IMO. These approvals are limited to a ive-year validity period.
To ease the transition further the US is also liberal in granting time-limited exemptions to individual ships. We believe that once US-approved systems become available the extension policy will become signiicantly more stringent. For more information on different ballast water topics such as treatment systems and approval process please visit dnvgl.com/ bwm.
SOX regulations
Discussions at IMO are centred on the question of whether the global 0.5 per cent sulphur content requirement should enter into force in 2020 or 2025.
A fuel availability study is in progress to provide a discussion basis for an IMO decision which may be made at MEPC 70 in October 2016. A complicating factor in the discussions is the EU Sulphur Directive, which stipulates a maximum 0.5 per cent sulphur content for all EU waters by 2020, irrespective of the IMO decision. If different dates are decided by IMO and the EU, shipping will for a period face a three-tier sulphur content regime. From an operational perspective, this will be challenging It should also be noted that the Water Framework Directive is putting constraints on the discharge of scrubber water in certain EU countries.
Belgium and Germany have in essence prohibited the discharge of scrubber water in most areas, severely constraining the operation of open-loop scrubbers. Other EU countries are following suit to a lesser or greater degree, with no common EU practice likely to be agreed. China has recently published regulations for SECA-like fuel requirements in certain coastal areas (see box next page). More information and our updated Sulphur guideline are available at dnvgl.com/lowsulphur.
NOX regulations
NOX Tier III requirements have entered into force in the North American ECA for ships constructed on or after 1 January 2016.
In essence, anyone constructing a ship today needs to consider potential operation of the vessel in the North American ECA, whether upon delivery or at some time in the future. If such an operation pattern is conceivable, NOX control technology will be needed for that ship. In contrast to the North American ECA the ECAs in the North Sea and the Baltic do not yet include a NOX requirement. This has been on the table for a number of years and there are now robust signals that a joint North Sea/Baltic NECA application will be made to MEPC 70. Assuming agreement at IMO these Tier III requirements are expected to apply to ships constructed on or after 1 January 2021.
CO2 and energy efficiency
Climate change remains the driving political force behind CO2 and energy efficiency regulations. In the EU, regulations for Monitoring, Reporting and Verification (MRV) of CO2 emissions have entered into force, requiring all ships above 5,000 GT sailing to or from European ports to comply. Ships must also report cargo data and average energy efficiency. The EU will make the data publicly available on an annual basis. Monitoring plans are to be submitted to verifiers by 31 August 2017, with 2018 being the first year of reporting.
Data will be published by the EU in mid- 2019. There is extensive work in progress to develop the practical framework and the EU is expected to publish practical details towards the end of 2016. Part of the purpose behind the EU MRV regulations is to encourage IMO to work on a similar mechanism with global, not only regional, coverage. The EU has stated that if this happens it will mothball its regulation. It is therefore of great significance that MEPC 69 did agree on a global mechanism for mandatory monitoring, reporting and verification of fuel consumption data for all ships above 5,000 GT. The scheme is expected to be adopted at MEPC 70, in which case 2019 will likely be the first year of operation. However, the scheme differs from the EU MRV in several important aspects, including confidentiality of data, calculation of efficiency metrics and requirements regarding the verification of data.
While the European Commission sees the IMO work as an important step forward it seems unlikely to view the mechanism as robust enough to reverse its own course on the MRV scheme. DNV GL expects that the shipping sector will have to deal with two different but overlapping reporting regimes for at least some years. IMO is also seeing a reinvigorated discussion on long-term CO2 emission goals following the global climate change agreement reached in Paris last year. There is as yet no agreement within IMO regarding the need to move beyond establishing a fuel data collection system, and it remains to be seen whether consensus can be reached. DNV GL sees a very real risk that unless significant progress is quickly made at IMO, other bodies outside the shipping industry may attempt to issue regulations. This would not be of benefit to anyone, least of all the shipping sector itself.
Source: DNV GL, Bulk Carrier Update, No1 2015
