IMO Archives - Page 19 of 25 - SHIP IP LTD

High sulfur fuel oil, once the cheap staple diet of the shipping industry, has been usurped by an abundance of low-cost, premium quality bunker fuel. That’s led to seafarers freezing orders for equipment to remove the sulfur from HSFO and maximizing compliant fuels.

But don’t write off shipping’s dirtiest fuel as shippers play a waiting game over the oil price recovery.

The COVID-19 driven collapse in oil demand has led to the spread between HSFO and very low sulfur fuel narrowing to less than $40/mt in mid-April based on the Northwest Europe differential for delivered bunker fuels at the Rotterdam hub.

That compares to close to $300/mt when the International Maritime Organization rules came into effect on January 1, requiring ships to sail with 0.5% sulfur fuel oil or have the sulfur removed using an exhaust gas cleaning system, or “scrubber”.

It’s no surprise to see a number of shippers delaying orders for scrubbers. International Seaways has postponed three planned scrubber installations to coincide with scheduled dry docking in 2021. Scorpio Tankers is delaying the installation of 19 scrubber retrofits until at least 2021, while Scorpio Bulkers has 13 scrubber installations on hold. Stolt-Nielsen was also among those to announce cancellations.

Scrubbers come with risks so the payoff has to make sense. Several ports across China, Europe the US and Singapore have banned the use of open-loop scrubbers, requiring ships to switch to compliant fuels when they are within port limits. And HSFO availability outside of the major ports has also been an issue.

Sources say that a price gap between the two marine fuels below $50/mt brings the payback logic of scrubbers into question. Wartsila recently announced a decline in new marine orders, largely due to a lack of scrubber investments.

That’s especially the case for retrofitting scrubbers, when it could take more than four years to pay back the outlay. But the repayment period is between 1.5-2 years if the exhaust gas cleaning systems are installed on a newbuild due to lower fitting costs and no offhire time, analysts estimate. Moreover, the ship has a longer life to make the returns worthwhile.

The number of scrubbers in operation at the start of the year was 2,200, according to Platts Analytics, and analysts’ estimates suggest that the total may struggle to get much above 3,000 by the end of the year after previous estimates of around 3,500.

Revival

“With oil prices going up and a slowdown in scrubber installations the Hi5 spread [low sulphur fuel oil vs high sulphur fuel oil], may widen again — although may be not to the $300-$400 levels seen before — and coupled with the expectations for decreasing freight (particularly in tankers) having a scrubber may become key,” said Anton Shamray, senior research analyst at Integr8 Fuels.

“So we could see more scrubber interest potentially towards the end of the year,” he added.

That also may explain the tactic to postpone rather than scrap scrubber orders as VLSFO starts becoming pricier again versus HSFO.

“Expectation of higher prices in years to come is perhaps one of the reasons why delays to scrubber installations and not outright cancellations are currently the preferred strategy of tanker owners,” said Gibson Shipbrokers in a research note.

Dated Brent – the physical benchmark used to price two-thirds of the world’s oil – has more than doubled in value since hitting a 21-year low in April. The measure of North Sea crudes has been trading in the mid-to-high-$30s range in the past week, and some market participants see the trend heading higher with OPEC+ production cuts and shut-ins elsewhere as the oil demand fall may have passed its nadir. Platts Analytics sees prices finding resistance at $45/b.

Go deeper: S&P Global Platts Oil Markets podcast – catch up on all the latest episodes

Euronav CEO Hugo de Stoop put it like this in a recent interview with Platts: “There is a big difference between retrofitting the fleet and buying tonnage with scrubbers already installed. And we have recently bought four vessels that will be delivered to us later this year or early next which are scrubber-fitted.”

Euronav has been opting for compliant fuels but still sees the merits of having scrubbers as part of its tanker portfolio.

Torm executive director Jacob Meldgaard told Platts in a separate interview a “balanced approach is working well for us,” with the tanker company having half its fleet fitted with scrubbers and with further installations due in the coming quarters.

But it’s not just within shipping that HSFO has found a home. Fuel oil is being used in both power generation and as a refinery feedstock, notably in the US.

With shipping now turning to the lofty goals of a carbon-neutral future, one could again see a limited lifespan for HSFO. However, given the lack of clean alternatives at this juncture and the life of vessels being around 25 years, this too remains to be seen.

Shipping may no longer have the same use for fuel oil but it will still play an important support role for many years to come.

Source: https://blogs.platts.com/

On June 2nd, 2020, Rodolphe Saadé was a key speaker at the UN Global Compact. Other speakers participated including Deputy UN Secretary-General Amina Mohammed, Prime Minister of Norway Erna Solberg, UN Secretary-General’s Special Envoy for the Ocean Peter Thomson, the Secretary General of the International Maritime Organization Kitack Lim, and Director General of WWF International Marco Lambertini.

As the entire world fights against the Covid-19 Pandemic, Rodolphe Saadé recalled the CMA CGM Group commitment for a more balanced globalization, which contributes to Economic and Social development, whilst respecting humanity and protecting the planet.

He made two major announcements:

• Our energy supplies will include 10% alternative fuels by 2023
• Our 2050 objective is to be Carbon Neutral

This is a new step for our Group, which is on track to reduce by 40% its CO2 emissions per tonne transported per km by 2030, a target set by the International Maritime Organization (IMO).

Rodolphe Saadé also precised:

“In 2019, we reduced our total CO2 emissions by 6%. These significant reductions were made possible thanks to our mobilization, the technological innovations implemented and an improved management of vessels operations.”

“We must move forward: it’s time to act !”

The year 2020 will also see the launching of the new 23,000 TEU LNG-powered vessels, confirming CMA CGM’s ambition for the energy transition of the shipping industry:

• This is a worldwide premiere, resulting in the reduction of greenhouse gas emissions around 20%, and the suppression of almost all Sulphur and fine particle emissions.
• This is a major event. It symbolizes the path that we are taking in terms of energy transition using the most advanced ecofriendly technology available today.

The CMA CGM Group, as a world leader in shipping and logistics committed to energy transition, has a major role to play in order to achieve a more resilient future.

Source: https://www.cma-cgm.com/

Compliance with the sulphur cap with be challenging enough in itself, but a further concern involves the competitive advantage gained from illegal non-compliance

When the new rules for marine fuel oil take effect from 1 January 2020, only fuels with a sulphur content below 0.50% will be compliant.

The rules are embedded in Marpol Annex VI as Regulation 14 and apply to fuel oil used outside Emission Control Areas (ECA). Within ECAs, a limit of 0.10% has been in force since 2015.

According to Statista, the world fleet constituted roughly 52,000 ships above 500 gt in 2017; for a large number of these ships the upcoming SOx rules are not of relevance, as they operate on distillate fuels. According to MAN ES, few ships below 2,000 gt with less than 3,000 kW installed power are configured to operate on HFO.

Compliance in North Europe

The sulphur rules have in principle been enforced since their introduction in 2005. It was only after the 2015 ECA rules took effect, however, that deliberate non-compliance was considered a genuine concern. With a current price gap between compliant and non-compliant fuel of some USD225, bunkering 1,000 tonnes of non-compliant fuel could release a “cheating bonus” of USD225,000.

As the present ECAs are situated in North Europe and North America, areas with long established Port State Control regimes, they do not offer a realistic guide as to how other ECAs might operate around the world, notably because fuel oil inspections have never really been an issue outside the ECAs. It is thus with some apprehension that the shipping community at large will greet 2020.

Enforcement in general

There are essentially two ways in which a vessel can demonstrate compliance with the rules:

1. Show the sulphur content in the fuel – BDN and fuel sampling; or
2. Take a measurement of SOx content in the exhaust gas.

The measurement of the SOx content in the exhaust gas is done by establishing the relationship between the number of CO₂ molecules in the fume and the surrounding air and the number of SO₂ molecules. This relationship can, via a relatively simple formula, be translated to the Fuel Sulphur Content (FSC): 𝐹𝑆𝐶 = 𝑆𝑂2𝑚𝑒𝑎𝑠𝑢𝑟𝑒𝑑 [𝑝𝑝𝑚] / (𝐶𝑂2𝑚𝑒𝑎𝑠𝑢𝑟𝑒𝑑 −𝐶𝑂2𝑏𝑎𝑐𝑘𝑔𝑟𝑜𝑢𝑛𝑑) [𝑝𝑝𝑚] ∙10⁵ ∙0.02308

According to the European Maritime Safety Agency (EMSA) the overall compliance rate in the North European ECA is around 95%, based on PSC inspections. Still, the use of non-compliant fuel constitutes a reasonably large minority (21%).

External emissions monitoring

The main problem regarding enforcement is that at present, it is literally impossible to monitor which fuel oil is being used and the consequent emissions on the open sea.

Although the United Nations’ Convention on the Law Of the Sea (UNCLOS) does grant littoral states some rights to intervene on ships in international waters, few coastguards would actually consider boarding a ship in open sea to check for compliance with Marpol Annex VI. The jurisdiction of the ships lies basically with the flag state, most of which have no capacity, or interest in, performing such checks.

Monitoring exhaust gasses from planes, drones, satellites, under-bridge and at port entrances have been trialed for some years. The sniffer project under the Great Belt Bridge in Denmark started as early as 2013. Later, the port of Gothenburg tested a combination of sniffers and laser beams at the port entrance and recently a successful sniffer project was run at the entrance to Bergen in Norway.

“The maritime authorities within the ECA areas have responded positively to the concerns expressed”

Several EU states within the ECA have performed fly-overs with airplanes to examine ships’ fumes, which eventually led the EU Commission to issue the guidance: Best Practices Airborne Marpol Annex VI Monitoring, under the Compliance Monitoring (CompMon) Project.

The Finnish Meteorological Institute even tried monitoring emissions via satellite, with limited success. It has been possible to measure the average SOx content in the air over a large area, but not to identify the level of SOx emissions from a specific source.

The Danish company Explicit ApS has carried out ship emissions monitoring on behalf of the Danish EPA since June 2017, using helicopters and drones. Upon evaluation 96.5 % of all measurements were classified as high-quality; 92-97% of the vessels checked were compliant, depending on geographic location.

This method of monitoring might be considered more efficient than the use of permanent sniffers, simply because most ship crew will be aware of where permanent sniffers are located, whereas they could never know when a plane or a drone would appear. In fact, the results show a generally higher SOx content far from shore than under the Great Belt Bridge, implying that some ships change to compliant fuel before passing under the bridge.

It is important to note that the results obtained by these methods are only indicative and are not likely to be used as evidence in court. For prosecution purposes, a lab-test of the fuel would be required. The intention is that Port State Control will use the sniffer results to identify ships for in-port inspections.

Internal emissions monitoring

Scrubbers installed in accordance with IMO’s Scheme B require constant monitoring and recording. In the early days of scrubbers, the Continuous Emission Monitoring System (CEMS) was an Achilles’ heel of the system, but reliability is now improving. Sensor manufacturer SICK’s strategic industry manager Hinrich Brumm said: “The CEMS technology came from onshore and was not always suitable in the harsh marine environment. However, as a manufacturer, this led us to develop a new CEMS especially for marine use and for undergoing type approvals (class requirements IACS E10, vibration, power fluctuation, etc, and Marpol compliance)”.

The mandatory installation of CEMS was actually proposed by IMO, but to no avail. And while some owners have mooted the notion of voluntary CEMS installation and reporting to their customers, interest from the  shippers community in general has been minimal. They simply expect the carrier to be compliant.

There is no doubt that emissions monitoring can is an important tool in the enforcement of the sulphur rules, there remains some considerable resistance among many flag states and shipowner associations to the mandatory use of CEMS. It will likely require a high level of global non-compliance before the shipping community at large is convinced of the merits of the mandatory installation of CEMS.

“Some owners have mooted the notion of voluntary CEMS installation and reporting to their customers, [but] interest from the shippers community in general has been minimal”

Trident Alliance

In early 2014, as concern over intentional non-compliance with the emissions rules grew, a group of owners met in the Maersk Maritime Technology office in Copenhagen to discuss how to avoid such a situation, via the implementation of a very robust enforcement regime. The meeting resulted in the formation of the Trident Alliance, an association which today comprises 46 shipowner members.

Whether a result of the Trident Alliance or otherwise, it must be acknowledged that the maritime authorities within the ECA areas have responded positively to the concerns expressed. The EU Commission established the European Sustainable Shipping Forum (ESSF) in 2014, one subgroup of which was tasked with addressing enforcement of the SOx rules within EU waters.

Discussing the actions taken in this area, chairman of the Trident Alliance Roger Strevens said: “The range and quality of enforcement tools have improved since the implementation of the 0.1%S ECA zones, but the global sulphur cap will require more. Among the enforcement tools that are being further developed are remote sensing technologies. The Trident Alliance welcomes this focus and supports the adoption of reliable new compliance detection techniques and technologies. Effective enforcement tools, used in conjunction with the (heavy fuel oil) carriage ban, will have an important deterrence effect, in addition to contributing to the detection and eventual prosecution of gross violators.”

How do owners perceive exhaust gas monitoring?

Scrubbers have something of a mixed reputation, but among their advocates, DFDS director of environment & sustainability Poul Woodall has only praise: “At DFDS we installed the first scrubber on Ficaria Seaways in 2009. Today we have 18 scrubber-fitted vessels in service, nine newbuildings contracted and a decision to retrofit a further 12 vessels with scrubbers. By and large our scrubbers have worked well.”

He continues: “During the past couple of years, DFDS has participated in the testing of drones and plane/helicopters for emissions monitoring of SOx. Basically, test flights have been conducted over a number of DFDS vessels – primarily scrubber fitted – and the results from the airborne readings have been compared with sensor readings from our ships. The work has been done by an external company, but we understand that the results reach an acceptable level that proves the accuracy of such airborne measurements.”

Looking to the future

We will likely be well into 2020, or even 2021, before we know whether non-compliance with the 2020 sulphur regulations poses a real problem.

It must be noted that the objective of the regulation is to protect the population from the unhealthy fumes caused by burning HFO. Recent measurements in Denmark show that sulphur content in the air has reduced by 50% since 2015, clear evidence that the rules are working in this region.

From a shipowner perspective, the main concern is if competitors gain an unfair advantage by deliberately violating the rules. Some non-compliance might be initiated and executed by the ship’s crew without the consent of the owner and that will not disturb the competition. If, however, a vessel is caught burning non-compliant fuel and it proves to be company policy instigated from top management, the hope is that all involved would use the most rigorous response available to them to crack down on such practices.

DFDS A/S director environment & sustainability Poul Woodall

Poul Woodall has over 40 years of experience within the maritime and transport industry. He has a degree from Copenhagen Business School supplemented with management education at Insead and Stanford Universities. Mr Woodall is also involved with the Trident Alliance, Green Ship of the Future, Interferry and various ESSF working groups in Brussels. In July 2018, Mr Woodall joined the new CEF Transport Advisory Group of INEA.

Wallenius Wilhelmsen vice president of global sustainability Roger Strevens

Mr Strevens works with a wide array of corporate activities, ranging from regulatory affairs to innovation and new business development. He is also the founder and chairman of the Trident Alliance. Mr Strevens holds an engineering degree from the University of Dublin, Trinity College.

Source: https://www.rivieramm.com/opinion/emissions-monitoring-maintaining-a-level-playing-field-post-2020-23341

In an effort to meet the new challenges that the IMO 2020 will bring to the markets, Glander International has hired David Chiang as Bunker Risk Manager. This is an entirely new position in the Glander group which the company considers as ‘response to shifting customer needs’.

Glander’s decision shows that uncertainty in the bunker market is increasing ahead of IMO 2020 and so does the demand for risk management products and services.

In his comments, the CEO of Glander International Bunkering, Carsten Ladekjær, explained that the bunker markets get more complex and the company’s customers are becoming more demanding. With its new service, Glander will offer customers tailored-made forward products in order to enable them hedge their future fuel prices and manage market uncertainties.

From his side, Chiang referred also to the increasing market uncertainties and noted that “More clients consider hedging as a bunker requirement to mitigate risks from an expected volatile market. Risk management in forward pricing products is ideally suited for this objective.’

According to many industry stakeholders, as the 1^st January 2020 is approaching, the role of Chiang will become more and more important. An opinion which indicates that people are afraid that the bunker industry will not become more transparent and less volatile anytime soon.

Source: http://bunkertrust.com/glander-introduces-risk-management-position-ahead-of-imo-2020/

The Ballast Water Management Convention (BWMC) — an important international treaty which helps prevent the spread of potentially invasive aquatic species by ships — now covers more than 90 per cent of world merchant shipping tonnage.

The news comes after China extended the treaty to Hong Kong. On 13 May, China notified the International Maritime Organization (IMO) about the extension of the BWM Convention to the Hong Kong Special Administrative Region, with effect from 13 August 2020.

Ships flagged to Hong Kong, China — the fourth largest flag administration in the world by shipping tonnage — will now have to apply the requirements of the treaty.

The BWM Convention aims to protect marine ecosystems by requiring ships to manage their ballast water so that harmful aquatic organisms and pathogens are removed or rendered harmless before the ballast water is released into a new location. This helps prevent the spread of invasive species – as well as potentially harmful pathogens.

The international treaty entered into force in 2017 and now has 83 signatories, representing 90.98 per cent of the gross tonnage of the world’s merchant shipping, up from 81.83 per cent previously.

Last year, BWMC amendments also entered into force, formalising the implementation schedule for the transition from the D-1 to the D‑2 standard aimed at ensuring that viable organisms are not released into new sea areas.

Since the entry into force requirements for the treaty were met in September 2016, there have been some 30 ratifications, with the percentage of world merchant shipping tonnage covered increasing considerably, from 35.14 per cent to 90.98 per cent.

Source: https://www.offshore-energy.biz/china-extends-imo-ballast-water-management-convention-to-hong-kong/

With the International Maritime Organization’s (IMO’s) new 0.5% mass by mass (m/m) global sulfur cap on fuel content (down from a current 3.5%) on track for a Jan. 1, 2020 enforcement date, electronics buyers around the world are wondering just how this new regulation will impact their supply chains.

The main type of “bunker” oil for ships is heavy fuel oil, derived as a residue from crude oil distillation. Crude oil contains sulfur which, following combustion in the engine, ends up in ship emissions. Sulphur oxides (SOx) are known to be harmful to human health, causing respiratory symptoms and lung disease, the IMO states.

In the atmosphere, SOx can lead to acid rain, which can harm crops, forests, and aquatic species, and contributes to the acidification of the oceans. “Limiting SOx emissions from ships will improve air quality and protects the environment,” the IMO says on its website.

Under the new sulfur limit, any “fuel on board” that is used in main and auxiliary engines and boilers must have a sulfur content of no more than 0.5%. According to the IMO, ships can meet the requirement by using low-sulfur compliant fuel oil; by using fuels like methanol or gas (when ignited, gas produces negligible sulfur oxide emissions); or by retrofitting ships with systems that “clean” the emissions before they are released into the atmosphere, so-called scrubbers.

According to the IMO, the new regulation will significantly reduce the amount of sulfur oxides emanating from ships and should have major health and environmental benefits for the world, particularly for populations living close to ports and coasts.

A High Level of Uncertainty

Right now, shipowners and operators around the world are figuring out the best way to comply with the new IMO 2020 regulations. According to Kuehne + Nagel, the new rules have created “a high level of uncertainty about availability of petroleum products and pricing.” It will impact vessel operators, refineries, and global oil markets. So far, ocean carriers have come up with the following options for complying with the new low-sulfur rules:

• Use scrubbers (emission cleaning technology) to remove pollutants from the ship’s exhaust, which allows them to continue using higher-sulphur fuels. However, the process of installing scrubbers is limited and expensive due to space and capacity constraints and will increase operating costs.
• Switch to non-petroleum-based fuels such as liquefied natural gas (LNG) for newer vessels with appropriate specifications. However, the infrastructure to support the use of LNG is currently limited in scope and availability. “Experts predict that by 2020 approximately 250 to 500 vessels, or a maximum of 10% of the global container fleet, will either be equipped with pollution cleaning technology or will be able to burn LNG,” Kuehne + Nagel reports.
• Switch to a Very Low Sulphur Fuel (VLSF) that complies with the new rules (most likely choice). However, the cost, widespread availability, and specifications of a new fuel for use in marine engines are still uncertain. “The petroleum industry needs to adapt refineries and supply chains and is likely to pass these costs on to the market,” the company says.

Getting Ready

Obviously, any or all of the above efforts will require significant investments in time and money, the latter of which may be passed along to shippers as we move closer to the January 2020 compliance deadline. According to Kuehne + Nagel’s calculations, the expected increase in costs will have a significant impact on the overall prices of container transportation and on freight rates.

“While the implementation date for IMO 2020 is Jan. 1, 2020, we anticipate freight rates to increase as early as the end of the third quarter of 2019,” it points out. “Therefore, long-term agreements for both full and part load containers will include a price adjustment method also known as Bunker Adjustment Factor (the ‘floating’ part of sea freight charges which represents additions due to oil prices).”

As the ocean shipping industry prepares for the new regulations, buyers should also be prepared for possible price volatility and service disruptions with their seagoing freight. “Compliance will cause both temporary and permanent effects that will force carriers to reduce their total capacity by 7 to 8%,” Flexport International warns. “Temporarily, capacity will be reduced by 4 to 5 as a result of the amount of time vessels will be out of commission while scrubbers are installed, and a subsequent increase in the number of blank sailings.”

Source: https://www.sourcetoday.com/supply-chain/article/21867377/how-will-imo-2020-impact-your-supply-chain

https://www.youtube.com/watch?v=X_x2_RTUiGM

A new IMO film shows how the IMO Polar Code supports safe and environmentally-friendly shipping in Arctic and Antarctic waters.

To make the new film, an IMO team visited the Ocean Diamond en voyage in the Antarctic, to find out at first-hand what the Code means for ships like this. As Ocean Diamond’s Captain Oleg Klaptenko confirmed, operating in Polar waters is the ultimate test of his ship and his skills as a professional seafarer.

“There are several sources of danger. Low temperature, bad visibility, very long polar night and polar day. Remoteness from our home and from human facility that can help you. It is also lack of good, accurate and complete hydrographic service,” says Klaptenko.

The Polar Code entered into force on January 1, 2017. It sets out mandatory standards that cover the full range of design, construction, equipment, operational, training and environmental protection matters for ships making polar voyages.

These rules go above and beyond existing IMO requirements such as those governing prevention of pollution from ships (MARPOL) and safety of life at sea (SOLAS). All the extensive safety and environmental regulations included in these and other IMO conventions still apply to shipping in polar waters.

Source: https://www.maritime-executive.com/article/imo-launches-polar-code-video

The International Code for Ships Operating in Polar Waters (Polar Code),¹⁾ which entered into force on January 1, 2017, constitutes a regulatory milestone for shipping in the Arctic.²⁾ This article considers China’s actions within the International Maritime Organization (IMO) leading up to the Code’s entry into force in 2017, while also surveying how the Polar Code has been received in Chinese academic and industry circles. This inquiry takes place against the backdrop of, on the one hand, China’s emerging interests in the Arctic wherein shipping plays a central role; and on the other hand, the introduction of the Polar Code as an mandatory international law instrument in a region characterized by intersecting sets of regional, national, and international regulations.³⁾

As the world’s second-largest economy, with over 60 percent of its trade (in value) traveling by sea, China is obviously a major stakeholder in international shipping.⁴⁾ It is the world’s third-largest shipowner in terms of vessel tonnage and also the world’s largest shipbuilder.⁵⁾ Shipping also figures prominently in Beijing’s engagement with the Arctic. Most notably through the Polar Silk Road—the Arctic outgrowth of the Belt and Road Initiative (BRI)—which envisions the development of commercial shipping lanes across the Arctic Ocean. As an example, in 2013, the director of the Polar Research Institute of China (PRIC) made the optimistic prediction that between 5 and 15 percent of China’s international trade would use the Northern Sea Route (NSR) by 2020.⁶⁾ However, commercial traffic in the Arctic is likely to only see modest growth this decade, with destinational shipping of hydrocarbons originating in the Arctic being the largest growth driver.⁷⁾ Chinese shipbuilders also stand to benefit from Arctic shipping, notably the development of the NSR, as this would increase the demand for new, ice-capable vessels.⁸⁾ Finally, the prospects of re-routing portions of its maritime trade through the Arctic bears security implications for China, as large shares of its westbound trade today transits the South China Sea.⁹⁾ In the sections that follow, the notion of technopolitics, broadly defined as the “strategic practice of designing or using technology to enact political goals,”¹⁰⁾ offers a heuristic frame for examining the political underpinnings, as well as ramifications, of international standard-setting, especially as they pertain to global geopolitics. The development of international standards provides participating states with what some have argued to be an ‘anti-political’ venue for leveraging technical know-how in order to inscribe national interests into ostensibly technical issues.¹¹⁾

China’s Activities in the IMO

China participated in the initial correspondence group set up in 2009 by the IMO to develop the Polar Code.¹²⁾ The public database of the IMO reflects China first addressing the Polar Code in 2012 at the 56th session of the Sub-Committee on Ship Design and Equipment (DE). Here, China suggested that governmental ships and “public service ships” should be excluded from the competency of the Polar Code.¹³⁾ Prior to this session, however, China had expressed support for a proposal made by the United States to oppose a Russian proposal to include a savings clause in the Code’s preamble that would retain the primacy of national shipping regulations until the IMO could adopt a fully harmonized framework.¹⁴⁾ The Chinese delegation also called for a clarification of what the Code termed “category C” ships.¹⁵⁾ The comment by the Chinese delegation problematized that the definition included both ice-class and non-ice-class ships. It subsequently asked for these two types to be differentiated, either in the definition of the category itself, or in subsequent technical provisions.¹⁶⁾

China also commented on a draft chapter on environmental protection. It urged that a thorough differentiation be made between Antarctic and Arctic waters, emphasising that while the former is a designated special area under several of the International Convention for Prevention of Marine Pollution (MARPOL) annexes, the latter was not. The Chinese delegation went on to suggest that the “general control level for environmental issues” and the attendant technical requirements concerning Arctic waters should first be decided in a committee or sub-committee instead of “rushing into the development of specific requirements.”¹⁷⁾ Furthermore, China sided with Greece and various other flag states and shipping NGOs in arguing that there was, at the time, insufficient scientific evidence to justify the draft requirements.¹⁸⁾ In addition to these interventions, China produced four proposals of its own, all of which were submitted after the Polar Code had been adopted by the Maritime Security Committee (MSC) during its 94th session in 2014. The timing of these proposals is significant, as by 2014, much of the Code’s content had already been developed by the DE sub-committee, leaving little room for any meaningful change. Of China’s four proposals, two were co-sponsored together with South Korea. Of note was the proposal to ease the administrative burden on ships conducting single or occasional voyages in the Arctic during the summer navigational season by lessening the requirement for these vessels to hold Polar Certificates.¹⁹⁾ The second co-sponsored proposal was submitted to the Marine Environment Protection Committee (MEPC), proposing an amendment to a draft of the Polar Code containing a loophole in the description of outer shell and cargo tank protection requirements of oil tankers and other vessels carrying oil.²⁰⁾ The two remaining, independently-produced proposals were both submitted to the Human Element, Training and Watchkeeping Sub-Committee (HTW).²¹⁾

The two co-sponsored proposals with South Korea reflect an alignment of interests between the two countries as major shipbuilding states and user states. Moreover, China’s comments and proposals, taken together, indicate the wish for a leaner, less restrictive Code. Yet the country’s activity during the development of the Polar Code is, perhaps, best characterized by its inactivity. This relative inactivity reflects, in part, the country’s general behavior in the IMO. The Chinese delegation to the IMO has been described as “quiet and not that active,” and China’s attitude towards international maritime governance has similarly been characterised as conservative and passive.²²⁾ Surveys of China’s submissions to the IMO show that the country has historically lagged behind most other major shipping states in terms of proposals.²³⁾ Moreover, China’s absence during the drafting process appears emblematic of the East Asian shipping states who all have expressed interest in Arctic shipping—but none of which made any substantial contributions to the Code’s development.²⁴⁾

Low-Key Geopolitics

China’s low level of engagement with the Polar Code becomes more conspicuous, however, when one considers Beijing’s somewhat hubristic desire to go from a “rule-follower” to a “rule-maker” in the Arctic.²⁵⁾ In its 2018 Arctic White Paper (WP), China states that it, in general, “has played a constructive role in the formulation of Arctic-related international rules and the development of its governance system.”²⁶⁾ The WP goes on to note that China “will participate in regulating and managing the affairs and activities relating to the Arctic on the basis of rules and mechanisms,” including “relevant rules of the [IMO].”²⁷⁾ The Polar Code is mentioned only once in a paragraph introducing Beijing’s Polar Silk Road. Here, it mentions the Code as it re-emphasizes China’s support for the IMO by stating that the country “abides by the [Polar Code], and supports the [IMO] in playing an active role in formulating navigational rules for the Arctic.”²⁸⁾

On this backdrop, China has arguably done very little to shape the future of Arctic shipping—despite it being a central component of its Arctic policy. The Code and the role of the IMO in governing regional shipping have, nevertheless, been well received as ordering forces that help smooth out the geographical hierarchy of Arctic and non-Arctic stakeholders. Moreover, observers have deemed the Code to be an important opportunity for China “to better understand and better grasp the rules of the game in Arctic affairs.”²⁹⁾ Most significantly, Chinese law scholars have summarized the entry into force of the Polar Code as a positive development in Arctic governance, exactly because it makes certain aspects of Arctic governance less regional—describing it as a “hardening of international law” in the region.³⁰⁾ Others have noted the “fragmented nature of Arctic governance” and the “geographical advantage of the Arctic states” as factors limiting China’s foray into the Arctic.³¹⁾ On the former point, the criticism has been that the majority of competent governance bodies and instruments in the Arctic are regional and non-binding. Although more adaptable, these are perceived to be less effective when compared with hard law instruments and are “prone to be biased against China and other law-abiding states.”³²⁾

To this end, the country’s shipbuilding experts have prescribed that China should work within the framework of international law to “strengthen [the Polar Code’s] uniformity and coherence, and prevent the regionalization of the behavior of individual Arctic states,” referring to Russia and Canada. They further argue that “already-certified ships [navigating the Arctic] should not be subject to the regulations of coastal states,” and that any obstruction of regular ship traffic would constitute “an interference with international law.”³³⁾ On this point, maritime law scholars have recommended that China “must use international law to ward against coastal states who might abuse their regulatory powers to disrupt Chinese maritime traffic.”³⁴⁾ Reflecting on this, the director of PRIC has called the Polar Code a “double-edged sword,” referring to the compromise between Arctic coastal states’ ability to regulate shipping in their exclusive economic zones and the sustainable regulation of polar shipping.³⁵⁾ Others have expressed hope that, following the entry into force of the Polar Code, “Russia’s administration of its NSR will gradually become more in line with international conventions.”³⁶⁾ These statements are marked by a concern over the potential interdiction by Arctic coastal states to the detriment of international maritime traffic in the region. From this perspective, then, the advent of the Polar Code supports Beijing’s vision of the Arctic as an international space by uniformly regulating shipping in the region and anchoring this authority in a specialized body under the UN.³⁷⁾ This would, at least in theory, give Beijing a bigger seat at the table to influence Arctic governance as amendments to the Code are negotiated by the IMO in the future.

Turbulent Technopolitics

Experts have emphasised the technological challenge posed by the Polar Code. The new regulatory regime has precipitated a new barrier of entry to polar shipping in the form of mandatory technical requirements for the construction and operation of polar-going vessels.³⁸⁾ In this context, the Polar Code provides compulsory technical standards “that present great challenges to the Chinese polar shipping industry”³⁹⁾ by constituting a “technological threshold”—at once underscoring the still-nascent state of China’s polar seafaring, and its position as a major user and shipbuilding state.⁴⁰⁾ Representatives from China’s shipbuilding sector have repeatedly called for greater engagement by domestic stakeholders and “actively take part in drawing up the Polar Code and boost its research on polar ship design and relevant regulations.”⁴¹⁾ China’s Maritime Safety Administration have similarly urged the shipbuilding sector to pay closer attention to new developments and to “more actively promote national interests,”⁴²⁾ while others have called for the industry to “take a thorough inventory of its capabilities” in order to better argue its case in the drawing up of the Code.”⁴³⁾

Academic and industry experts have shown to be particularly cognisant of the technopolitics that played out within the IMO as the Polar Code was being drafted. Law scholars have argued that “due to the IMO being a specialized agency, countries with the most advanced technology speak with the strongest voice (huayuquan),” and will “use the IMO as a platform to spread their own standards.”⁴⁴⁾ Others have argued that since “all international cooperation is based on national strength”—and seeing as shipping stands particularly prominent in the Arctic—China should make concerted efforts to improve its polar shipbuilding capabilities.⁴⁵⁾ The country’s shipbuilders have stressed China’s geographical context as a non-polar state as well: “By being a non-polar state, Chinese ships have to traverse large distances of open water before reaching the ice-infested waters of the polar regions.” Therefore, these ships “should not need to be able to operate in polar areas independently to the same extent as those of polar states,” and as its polar shipbuilding capabilities mature, “China should emphasize these conditions in the drawing up of the Polar Code.”⁴⁶⁾ Shipbuilders have also expressed worries over an eventual ban on the use and carriage of Heavy Fuel Oil (HFO), echoing China’s position during deliberations in the IMO, arguing that the Code “must strike a balance between commercial shipping and environmental protection and not simply adopt an outright ban.”⁴⁷⁾ Perhaps the clearest articulation of these technopolitical dynamics is the prescription that China should adhere to a “principle of moderation” when participating in the future work of the Polar Code: its delegation to the IMO ought to remain within the “category of technology (jishu de fanchou)”⁴⁸⁾—seeing as the technical nature of the IMO negotiations provide China with room to further its interests without becoming embroiled in regional politics and issues of sovereignty. To this end, argue that China should use “technology” to circumvent “political principles (zhengzhi yuanze).” On matters not in China’s interest, it should adopt a “principle of procrastination (tuoyan de yuanze)” in order to buy more time.⁴⁹⁾

Conclusion

Albeit only a cursory review, this look at China’s reception of the Polar Code reveals that, while having taken a back seat during its development, the Code is nevertheless recognized as a development favourable to Beijing’s interests in the region by anchoring the regulation of Arctic shipping in the IMO. Its development has partially been framed as a technopolitical competition, wherein technological competency can be leveraged for political gains. This accords in many ways with the observation that China, as a geographical outsider, must resort to being a “norm entrepreneur” as it attempts to grow its position in the Arctic.⁵⁰⁾ Paralleling this observation, Chinese International Relations scholars have explored the concept of “creative involvement” and identified the Polar Code as a “technological route” through which Beijing can gain a greater voice in Arctic affairs.⁵¹⁾ Future studies should explore China’s activities in the IMO more in-depth than what this article has been able to do. They should also examine how industrial policy is being configured to meet the concerns outlined here. More generally, then, this article hopes to highlight how negotiations over technical issues can serve as fruitful venues for exploring broader, geopolitical contentions – articularly as they, in the case of Arctic shipping, gather both Arctic and non-Arctic states. The anti-political qualities of such processes can be productive for states and non-state actors who lack the geographical or political legitimacy to argue their cases in other forums. This sentiment was, perhaps, best captured by the title of an article in the trade publication China Ship News: when it comes to emerging maritime regulations, “asking questions beats answering them.”⁵²⁾

Source: https://www.thearcticinstitute.org/arctic-technopolitics-china-reception-polar-code/