Over the next few years both shipowners and ballast water treatment system makers will have to make some hard decisions. For the shipowners they are which system to opt for, whether to scrap older vessels with a limited life span or to explore one of the alternatives that may or may not be on offer.
Those alternatives include port-based treatment and exemptions under the same risk area rules. A port-based treatment makes a huge amount of sense for owners operating on regular routes but less so for ships trading in the spot market or in a sector such as offshore where cargoes are not the governing factor.
There is a powerful argument in favour of port-based systems which would mean that far fewer ships would need to install a system. However, unless there is a system in every port or at least in sufficient hub ports, it will be of limited use. A port-based system could even be of such a size and operated on an industrial scale to bring revenue to a port.
Rather than the expense of installing and maintaining a system on individual ships, owners would instead pay a rate per tonne for discharging dirty ballast and taking on treated clean water as required. There is one drawback and this is if a ship is obliged to take or discharge ballast for operational reasons outside of a port, it may find itself in an area where such discharges are not permitted.
Port-based systems are presently in their infancy and involve either a treatment system installed on a barge or a system housed in a container that can be moved from berth to berth as necessary. Container mounted systems are also a possible option for some vessels if they can be mounted on deck and used while sailing. These systems may be one way in which the expense of fitting a system to a vessel nearing the end of its life can be avoided as the system could be switched to another vessel once the decision to scrap has been made.
A little under two years ago when Finland ratified the ballast convention during the days of the 2016 SMM exhibition, most of the system makers were expecting that in 2017 their long wait for a return on investment would be coming to an end.
As things turned out this wasn’t quite the case. Faced with the prospect of the majority of owners taking advantage of the possibility of gaining a five-year delay by decoupling the IOPP certificate from the regular round of renewals, the IMO agreed to their own delay pushing the deadlines back by several more years for existing vessels.
Ironically it was just a few months after Finland’s ratification when the USCG issued its very first type-approval to Optimarin of Norway. Two more approvals (Alfa Laval PureBallast 3 and OceanSaver II) followed within weeks and in 2017 three further approvals Sunrui, EcoChlor and Erma First) were given. In June this year Techcross’ Electro-Cleen system was approved during Posidona and since then Samsung’s Purimar and Bio-UV’s Bio-Sea B have also been given the nod by the USCG.
That means there are now nine systems with US type-approval and another six expected to join the list within a few months. The six companies with approvals pending are De Nora, JFE engineering, Panasia, Wärtsilä, Headway and Hyundai.
Among the systems with US type approval are three UV-systems, one chemical injection and five electro-chemical types. As regards capacities, the range extends from 50m3/h up to 16,200m3/h, thus there are systems that would outwardly appear to suit most vessel types. As the number of approved systems grows, the US is gradually phasing out the alternatives of ballast water exchange and use of the AMS process.
The end of the AMS dispensation could spell trouble for some ships especially those with systems that were given AMS status, but which have not yet achieved US type approval. Now that there are several systems with US type approval, the AMS status of systems will begin to expire five years after the initial date. Since the first AMS systems were accepted in 2013, those could be ending this year. Vessels with a ballast capacity of 1,500 to 5,000m3 were required to be compliant under US rules from 1 January 2014 and will be the first ships to be affected. Vessels with ballast capacities larger or smaller will have an extra two years to become complaint. Vessels with a system that had AMS status but which has not been granted US type approval could be obliged to replace the system if still trading in US waters.
That means the window for other systems to be considered as suitable for vessels trading to the US is getting smaller. If some of the IMO approved systems do not achieve USCG type-approval within a fairly limited time scale, they could lose out on a large section of the ballast retrofit market. On the other hand, since only around 10-15% of all vessels in the world fleet are regular callers at US ports, perhaps some of the system makers are not looking for sales to those vessels.
Revised G8 rules provide another obstacle
Although the IMO and US rules are quite similar, for many years no system had achieved US approval while well over 60 had been granted approval under the IMO process. Criticism of the IMO rules have lead to a tightening up of the processes and a new G8 process is now in force for the IMO approval. Ships installing systems through to 28 October 2020 can opt for one approved to the old G8 rules but after that date only systems approved to the new rules will be acceptable.
At present only Alfa Laval has obtained approval under the revised rules so its PureBallast system is now the only system meeting the US and new IMO rules. Others are in the process of playing catch up and doubtless the list will soon begin to grow.
Exactly how many of those makers with currently approved IMO systems will stay in the market is anybody’s guess. The level of newbuilding is not sufficient to keep all of those with current systems afloat once the retrofit market disappears and going through the whole G8 process again is an expense that some makers may feel is just throwing good money after bad and decide to cut their losses and bow out. The fifteen systems with or close to US type-approval would appear to have gained an advantage in the survival stakes, some of the others may find that the ballast bandwagon is fast filling up and there may be no place for them. For their part, owners are not likely to want to install an older system unless it is offered at a very attractive price and can be fitted before the October 2020 date. There may be some bargains to be had there and they will be in a strong negotiating position but the time is rapidly running out to make a commitment.•