Dry bulk owners voice concern as ballast water rule date looms

Vega Mars has been accused of dumping ballast water illegally in the US and faces a fine of up to USD38
Vega Mars has been accused of dumping ballast water illegally in the US and faces a fine of up to USD38

Shipowners are eyeing the 8 September 2018 imposition of the Ballast Water Management Convention with growing concern as they try to retrofit vessels in compliance with the International Maritime Organization (IMO) regulation.

Dry bulk shipping association INTERCARGO said at its Hong Kong meeting this week that it was concerned about the practical problems faced by its members trying to retrofit their fleets with the ballast water management systems (BWMS) and would be raising the issues at the forthcoming IMO Marine Environment Protection Committee (MEPC) 71 in July.

“While it welcomes the purpose and the focus of the convention, INTERCARGO believes that the regulatory bodies should consider the challenges faced by the existing bulk carriers, the largest segment of world shipping by deadweight tonnage,” the association said after the meeting.

The United States has not accepted the convention and has instead adopted its own ballast-water regulations in 2012, which has created significant difficulties for the maritime industry. A major issue for the dry bulk shipowners has been the availability of systems approved by the US Coast Guard (USCG). Of the three USCG type approved BWMS available to date, the association said only one system was realistically suitable to bulk carriers for retrofitting.

“In relation to the USCG requirements and extended compliance dates granted by USCG, the industry would welcome a flexible and pragmatic transition to the post-USCG-approved ballast water management systems era since December 2016 until more systems are approved and more technologies represented,” the association stated.

Peter Hinchliffe, secretary general of the International Chamber of Shipping, said this disconnect in requirements has left many shipowners wondering if their vessels will be able to operate in US waters when the IMO convention comes into force.

“The uncertainty in this area has been compounded by the fact that only three equipment makers – Optimarin, Alfa Laval, and Ocean Saver – have systems that are approved and considered fully compliant with both the convention and US Ballast Water Regulations. A fourth system is currently being considered by the USCG for full approval,” he said.

Ships entering US waters will need to meet the standards laid down in US regulations and enforced by the USCG. Since type-approving the three ballast water treatment systems in December, vessel operators can no longer cite an absence of available systems as a reason for requesting a compliance exemption from the USCG.

However, Vijay Gupta, managing director of dry bulk carrier Anglo-Eastern, said there would be several more approved systems towards the end of 2017. “It costs equipment makers USD4–5 million to get their systems through the US approval process, but we expect more will be available by the end of the year,” he said.

There are estimates that the global maritime industry will spend upwards of USD75 billion on equipping their vessels with ballast water treatment systems. Depending on the size of the vessel, its ballast water capacity, and the type of treatment, estimates show that the cost of implementation of the treatment systems can range from USD500,000 to USD5 million per vessel with 40,000 ships to be equipped. This is in addition to other maintenance and operational costs.

Hinchliffe said given these costs, it might be more feasible economically to scrap a substantial number of older ships rather than modify them to meet the convention’s standards.

Other areas that dry bulk shipowners felt needed further study were the revised G8 guidelines that aligned the IMO BWMS testing regime with that of USCG, power and space requirements for the systems, ballasting capacity, and the incompatibility of the highly energy-efficient gravity discharge used by a large percentage of the dry cargo fleet.

While there has been some pushback from some sectors of the maritime industry, in the ship management business regulatory compliance was regarded in a more positive light.

“Compliance helps ship managers,” said Anglo-Eastern Univan executive chairman Peter Cremers. “We have the resources to comply, and the more difficult it gets to manage a ship and comply with the regulations, the more scale works in our favour.

“We already have three full-scale systems in our training institutes. These are things that only companies with size can do. Compliance is not an issue for us because we have people in India preparing our seafarers for the coming changes. We are ahead of the game.”

Bjorn Hojgaard, CEO of Anglo-Eastern Univan Group, said that from the shipping side, of the 610 vessels managed by the group, 25% have the right ballast water treatment systems installed and he did not expect any disruption when the convention was enforced from 8 September.

“It has been difficult for shipowners to find out how the rules will be enforced, and it hasn’t helped that the US has had a different approach to the rules,” he said. “But the regulations challenge our industry and move the bar up. The more difficult it becomes to manage ships, the more it requires a proper organisation and scale to do it.”