Future shipowner costs hinge on VIDA

VIDA has been generally supported by the maritime industry. Credit: Dietmar Hasenpusch
VIDA has been generally supported by the maritime industry. Credit: Dietmar Hasenpusch

Trading in the United States could get more complicated – and more costly – if legislation aimed at simplifying ballast-water compliance for shipowners also eliminates current vessel exemptions while adding new requirements and higher standards.

The Vessel Incidental Discharge Act (VIDA), which would give authority to federal agencies over ballast-water discharges in the United States, passed the US Senate on 13 November as part of the US Coast Guard (USCG) authorisation bill. As of 21 November, the USCG’s authorisation was awaiting reconciliation with the US House of Representatives and could be taken up for a vote as early as 27 November, according to sources on Capitol Hill.

VIDA, which gives the US Environmental Protection Agency (EPA) primary responsibility for setting ballast-water discharge standards –and the USCG responsibility for enforcing those standards –has so far generally beeen supported by the maritime industry because it shifts more power to the federal government for setting standards rather than allowing for a patchwork of standards by individual states under the current regime.

The Chamber of Shipping of America (CSA), which represents US-based vessel companies operating in the United States and international trades, expressed guarded support for the legislation.

“The regulation is not as good as could be, because EPA still has a lot of control over marine devices and other things,” CSA president Kathy Metcalf recently told IHS Markit. “The rubber will hit the road when the agencies start to actually implement the legislation.”

If the legislation passes without the House amending the language, the EPA would not be obligated to maintain vessel exemptions currently under the USCG’s regulatory authority. Those exemptions include crude-oil tankers engaged in US coastwise trades, seagoing vessels of less than or equal to 1,600 gt that operate in more than one US Captain of the Port Zone, and non-seagoing vessels, which includes many of the towing and tug boats that operate on America’s inland river system.

“VIDA, in its current form, doesn’t provide for those exemptions,” Sean Brady, chief of the USCG’s Office of Operating and Environmental Standards, confirmed to IHS Markit.“In addition, the latest version of the bill made public also limits the amount of input the Coast Guard is able to provide, in that the EPA in not required to receive Coast Guard concurrence before moving forward with a proposed standard.”

The EPA would also be given broad discretion in setting new standards for other discharges such as graywater and vessel run-off, based on either “best available technology economically achievable” or “best management practice”, according to the legislation. The EPA, whose expertise is centred on land-based facilities, could impose standards for discharges that could require expensive and/or impractical pollution control equipment that the USCG would be unable to reject.

Brady contends that the Coast Guard is better positioned than the EPA to evaluate the effect of new standards on shipowners given its authority over and familiarity with oceangoing vessels.“The US Coast Guard is intertwined with the maritime industry and as a partner with the Department of Homeland Security in facilitating safe commerce,”he said. “We have a vested interest in the industry, as it supports our national economy.”

The “best available technology” standard could also lead to a subtle ratcheting-up of discharge standards based on the technology that is available at any given time, leading to further potential costs for shipowners.In cases in which shipowners currently are required to upgrade equipment based on new safety or environmental standards, “the Coast Guard typically allows for a grandfathering clause that’s applied to vessels when they’re built or when they go through a major conversion, but that could change under VIDA” in its most recent form, Brady said, adding that a grandfathering clause is “going to be up to the EPA.”

The EPA will have two years after the Coast Guard bill is signed into law to establish discharge standards, after which the USCG will have up to two years beyond that to develop compliance and enforcement regulations for the standards.