*Environmental regulations
Presently Shipping operates under a complex set of international and national regulations. Traditionally, the leaps in regulations have been event driven, and in some cases even driven through events outside the sector. A wellknown example is the Exxon Valdez oil spill, which resulted in the US Oil Pollution Act (OPA) and mandatory double hull design. While environmental regulations in the maritime industry have historically lagged behind those of other industries, this condition is now changing. An increased focus on both worldwide and local environmental issues in general, combined with the growing realisation of the actual pollution burden imposed by shipping, has led to an upsurge in both international and national regulations. Some are ready for implementation and will enter into force in the near future, while others are still being developed and will have an impact only in the intermediate term. The Key issues having a significant regulatory impact this decade are the following. From a “beyond 2020” perspective, there are a number of emerging issues that appear likely to result in regulatory initiatives: key among these are black carbon, hull bio-fouling and underwater noise.
Sulphur oxides, nitrous oxides and particulate matter
SOx, NOx and PM are all emissions to air that result from the combustion of marine fuels. These emissions have potentially severe ecosystem impacts and negative health effects on exposed populations. These impacts have, in some parts of the world, led to strict regulation of emissions from land-based sources. In recognition of shipping becoming a dominant emission source, potentially exceeding landbased sources, emissions have been internationally regulated by the IMO. MARPOL Annex VI states a combination of general maximum worldwide emission levels and more stringent levels applying to designated sea areas usually known as Emission Control Areas (ECAs). The regulations permit emissions to be mitigated by either changing the fuel specification/type or by exhaust gas cleaning. By 2015, operators will have to choose between installing exhaust gas cleaning systems known as scrubbers or switching to low sulphur fuel for all ships operating in an ECA. In 2020 or 2025, pending an IMO decision in 2018, the 0.5 percent sulphur worldwide cap will enter into force. A complicating factor in these decisions is the fact that there are local and regional regulatory initiatives in addition to the international IMO requirements. One key example is the EU, where the most likely outcome of an ongoing revision of legislation is the implementation of a 0.5 percent sulphur limit in all EU waters, beginning in 2020. These developments may significantly affect operator considerations. Uncertainties notwithstanding, international regulatory deadlines are clear and key strategic decisions need to be made.
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Ballast water
Another key issue probable to have a significant regulatory impact this decade is the implementation of the new IMO Ballast Water Convention. There have been many cases of alien species being introduced into new environments, with ballast water being a major transfer mechanism globally today. Organisms carried with ballast water can establish themselves in new environments, causing dramatic shifts in food webs, chemical cycling, disease outbreaks and indigenous species extinction rates. The cost of these invasions has been estimated to be in excess of $8 billion annually in the US alone. In response to this, the IMO adopted the Ballast Water Management Convention, a set of regulations which severely limits the amount of organisms carried in ships’ ballast water. A key provision of the convention makes ballast water treatment mandatory for all ships in accordance with a defined schedule. The convention is unique in that it has a fixed timeline, mandating that most ships in international trade have to have ballast water treatment systems installed by the end of this decade.