Plus ça change
I have looked back to my comment in last year’s edition: much has changed, but much has stayed the same.
First, the changes. The number of states that have ratified IMO’s Ballast Water Management Convention (BWMC) has risen from 54 to 69 – up 28%. But the proportion of the world’s tonnage those flags represent has gone up from 53.41% to 75.11%, a rise of 40% in tonnage terms, due to some big flags (including Bahamas, Greece and Malta) getting on board. It seems only yesterday that I was obsessing about every 0.01% of the fleet as the figure edged towards the elusive 35% to trigger the convention’s entry into force. Now we are at more than double that.
US Coast Guard type-approvals are mounting up, and installation extensions are becoming harder to get. But do not forget about the Environmental Protection Agency (EPA) and its new Vessel General Permit (VGP), due to come into force in December. In late 2016 we were promised a draft version in mid-2017, or late 2017 if the schedule slipped.
It has slipped quite a lot. As I started to write these words in late April, I received an email from the EPA telling me to expect a draft in early July at the earliest. “Those estimates of the draft permit being available in late 2017 did not come true,” my contact said. Can the next VGP really need so much revision that it is taking a whole year of unexpected additional work?
Another big change since last year is that shipboard tests are being carried out, and not just in the US. Saudi Arabia, which only ratified the convention in April last year, is leading this charge. Data it presented during IMO’s PPR 5 meeting in February, as its contribution to the BWMC’s experience-building phase, was generally welcomed. With so many tankers loading so much oil in the kingdom, I am not surprised it is being proactive about checking the vast amounts of ballast being offloaded in its ports, although some tell me that its real motivation for taking an interest in water quality is because it wants to revive its pre-oil fishing industry.
Alongside all this change and movement, there is the same sense of delay as in previous years. Last year it was International Oil Pollution Prevention certificates that were being mucked about with to delay installations. This time the deferred D-2 compliance regime agreed at MEPC 71 has taken on that role. By the time some ships have to install BWMSs, the convention will be marking its 20th anniversary.
Another detail that has stayed the same is my surprise at the number of BWMSs in the directory section at the back of this guide: 97 this year. When will the shakeout that I have long predicted actually begin? How many of these will apply for USCG type-approval, and how big will the market be for any systems that do not achieve that status?
I shall answer those questions. The shakeout will begin once the retrofit boom is in full swing, and market leaders naturally emerge. So that will be during 2022-24. Of those 97, some manufacturers have multiple systems, and many of those companies have strong parent groups. So at least half will apply for USCG type-approval. And the market for non-USCG type-approved systems? Bigger than many currently believe. There is a notion that owners will prefer USCG type-approved systems as an insurance against future trade opportunities and eventual resale, but there are enough regional operators and owners who buy on price to sustain a second tier of systems.
I realise that those forecasts – like those that predicted we would all be commuting in flying cars by now – put me at risk of future ridicule. We shall see. Compiling this guide each year provides a unique opportunity to consider these bigger questions and think about the long term if I have learned anything from them it is this: Plus ça change, plus c’est la même chose.