Traditionally the worldwide shipping industry features two business models: the first one is based on purchasing second-hand tonnage, i.e. old ships using obsolete technologies with higher fuel consumption and thus higher emission levels, whereas the second model invests in new vessels using state-of-the-art technologies associated with a dramatic reduction in fuel consumption and emission levels.
Obviously the latter model will gain the upper hand in the next few years.
All Belgian shipowners are global leaders in this regard. Their sights are completely set on the future. Our annual report of this year reflects the evolution of shipping, in a few decades we shifted from communication with morse, and mapping out the route with compass and sextant to fully autonomous vessels. By publishing this report digitally this year, the Royal Belgian Shipowners Association supports the evolution toward new technologies.
CMB invests in research exploring the development of hydrogen as the fuel for the future, Exmar’s newly-built ships will be powered by LPG, DEME goes for dual fuel engines and the fuel consumption of Euronav’s recent tankers is 30% less than in reference year 2008. The new vessels under construction for Fast Lines and Durot Shipping also reflect the trend to adopt new technologies. Several Boluda port tugs have been fitted with catalysers reducing their emissions to an absolute minimum.
Europe launched its Green Deal in 2019, the main pillars of which are green technologies and green finance.
The Belgian shipowners are supportive of this initiative.
Shipping is a global business offering perfect solutions in terms of supply and demand. Therefore, it is extremely important that Europe’s Green Deal should be seen in this worldwide context, in order to guarantee the competitiveness of European shipowners. Indeed, we have a 40 percent share of the world fleet and we do intend to preserve our global market position.
Hence the extreme importance of having all mission-related decisions taken at IMO level to ensure the preservation of a worldwide level playing field.
In 2019 as well, piracy remained a threat for shipping. We thank the Belgian Navy for their professional cooperation in protecting our crews.
We also wish to express our appreciation for the constructive cooperation received from both the Belgian authorities and the trade unions.
Worldwide some 162 cases of piracy and armed attacks were recorded in 2019, against 201 in 2018. There were 130 incidents of pirates boarding vessels, 11 vessels came under fire, there were 17 attempted attacks and 4 vessels were hijacked.
Although we do welcome the reduction in such incidents, the shipowners are enormously concerned by a number of trends in several parts of the world. Indeed, in 2019 pirates did abduct 134 crew from their vessel during 19 incidents.
The Gulf of Guinea accounts for over 90% of worldwide crew abductions, i.e. an annual doubling of figures, 121 crew having been abducted in 2019, whereas that number still stood at 78 in 2018.
About 250 pirates operating in about 10 groups are thought to be active in the region. Usually the people involved are former members of the armed forces, generally under the influence of drugs. Backed by a well-operated network, they are based in mangroves, where they are hard to trace.
Pirates do not distinguish between types of vessels, though they tend to target those with the weakest security. Therefore, any vessel is a potential target, even at a great distance from the shore. Some recorded incidents even took place more than 100 NM offshore. Additionally, they target EU citizens and they are very much aware of the insured amounts.
Vessels passing through the Gulf of Guinea are undoubtedly exposed to a clear and present danger. In such circumstances crew safety and security cannot be guaranteed. The violence displayed therefore calls for a robust response.
Consequently, RBSA calls on authorities at all levels to take concrete action, as the conditions in which crews have to work in the region are terrible. Maritime security needs to be high on the agenda of partnerships, trade agreements and of any sort of cooperation with regional African partners.
From 7 to 15 December 2019, the Belgian Navy took part, for the fifth time, with the Godetia, in the UN Maritime Capacity Building mission. This initiative seeks to enable African coastguards to take action against seaborne threats. During the mission, the Godetia also provided support to BEMTAR (Belgian Maritime Threat Awareness & Reporting).
BEMTAR is Belgium’s answer to regional insecurity off West Africa and to the lack of international and European initiatives to provide adequate protection to vessels passing through those waters. In the meantime, BEMTAR has succeeded, over the last six years, in boosting the security of vessels under the Belgian flag in the region and worldwide, through the provision of relevant information and as a point of contact. RBSA encourages the European Union to follow the Belgian example, to take it to a higher level and to increase the efforts in the region. Enabling vessels and crews to operate safely is a necessary precondition for maintaining trade flows.
Acts of piracy also increased in the Singapore Straits, especially in the last quarter of 2019. Twelve incidents were recorded, ten of which involved successfully boarding vessels. Pirates in the region engage in low-level armed attacks at dusk. Notwithstanding this trend, seven crew were abducted there as well. Some hope can be found, however, in the fact that the Singapore law enforcement agencies promptly respond to such incidents.
Lastly, 10 low-level incidents were reported from Peru. In Indonesia the number of cases continued to decrease, from 36 in 2018 to 25 in 2019.
No incident was reported last year from Somalia. In view of the drop in the number of incidents, the IMO Maritime Safety Committee decided to reduce the High-Risk Area as of 1 May 2019. Nevertheless, Somali pirates still have capabilities to attack shipping in the Indian Ocean. Continued vigilance is therefore a must and adherence to Best Management Practices remains necessary when passing through these waters. Currently 80% of the vessels entering the High-Risk Area register their presence there. Monitoring shipping in the region is still essential to keep the piracy problem under control and the same applies to the presence of military assets.
The European Union has shown leadership in launching EUNAVFOR’s Operation Atalanta in East Africa, resulting in a dramatic reduction in the number of attacks in the region. As the extension of the mandate is due in 2020, RBSA emphatically insists on the need to maintain the EU’s commitment to the operation. In May 2019, RBSA was part of the ECSA Security Working Group visiting the new site for the headquarters of EUNAVFOR’s Operation Atalanta in Rota (Spain). This visit emphasized once more the strong links between the navy and the industry.
The following 5 locations contributed to 57% of the total attacks reported in the period january-december 2019
IMB PIRACY REPORT - JANUARY TO DECEMBER 2019
Administrative simplification to be achieved through the ’European Maritime Single Window Environment’
Shipping operators still face excessive red tape. Whenever a vessel calls on a port, the ship’s operator has to supply a series of data to a number of entities and government agencies prior to the vessel’s arrival. The ‘Reporting Formalities Directive’ notwithstanding, such procedures have not as yet been harmonised in most EU ports. Moreover, the parties involved do not efficiently share the information received among themselves.
However, shipowners are very much pleased by the great strides made in the course of 2019. Regulation (EU) 2019/1239 of the European Parliament and of the Council of 20 June 2019, as published in the EU Official Journal of 25 July, established a European Maritime Single Window environment. Said regulation meets a large number of priorities put forward by ECSA, including the need for clarity with respect to data and web page harmonisation (Graphical User Iinterface), reuse of information, respect for investments made and the need for increased cooperation among stakeholders.
The Regulation entered into force on 15 August 2019 and its provisions will become applicable six years later, i.e. on 15 August 2025.
Administrative simplification is to be achieved through the following:
- A harmonised data set: Member States will have six months to list the data they deem necessary. Additionally, they will need to specify on what legal grounds they require all the information to be collected. This process will introduce some rationalisation into their information requirements;
- A harmonised system-to-system reporting interface, to be incorporated into all NSW’s (National Single Window), especially for the entry of large data volumes;
- A Graphical user Interface (web page) per Member State, however featuring common functionalities, providing users with identical experiences on all web pages. Additionally, the system will be capable of handling fully harmonised spreadsheets. This Graphical User Interface has especially been designed with the manual entry of small data volumes;
- Reusing information: common databases will enable reporting parties to reuse information. Moreover, the Regulation provides for a common addressing service with redirection to the correct address.
- System management: Member States shall appoint a national coordinator and develop a long-term plan.
The full EMSWe (European Maritime Single Window environment) shall be ready within 6 years, in line with the modifications to the customs systems. A number of intermediate deadlines have been set however:
- Defining a common data set within the next two years;
- Within two years, determination of the technical specifications for the system-to-system interface;
- Within 3 years, development of the Graphical User Interface module;
- Within 5 years, development of the additional support services, including the common addressing service and the common databases;
- Finally, a year’s testing of all systems.
As process administrator, the European Commission has created workflows ensuring proper execution, among others through delegated and implementation actions. Jointly with other industry representatives, ECSA will be closely associated with the entire execution process. Thus reality-checked, the implementation of the Regulation will be more efficient.
The first concrete step in the process has already been made, the Member States have submitted, to the European Commission, a list of all their reporting requirements, including legal grounds, applicable to vessels calling on their ports, moored there or sailing from them. RBSA attended the meetings organised by the DG Shipping to explain the Regulation and to discuss the plan of action with all parties concerned. As a result, the Belgian reporting list was submitted on time to the European Commission. Additionally, the development of the project also features in the budget talks held by the relevant federal authorities.
Based on Member State inputs, the European Commission has now initiated the creation of the EMSWe data sets, to be approved by mid-2021 for delegated actions.
New Belgian Shipping Code
The new Shipping Code, numbering a total of 1200 articles, was approved on 4 April 2019 and published on 1 August 2019 in Belgium’s Official Journal. Said Act of Parliament will become effective as of 1 September 2020.
To mark this event and to thank the Minister for the North Sea, Philippe De Backer, as well as the members of the Maritime Law Committee for their endeavours of the past twelve years, RBSA organised a celebratory lunch on 9 May 2019.
Since 2007, the Maritime Law Committee has been working on modernising Belgium’s shipping law, as this legislation was still part of the 19th century Commercial Code. The globalisation of shipping and many initiatives from the European Union required the updating of the legal framework concerned.
The texts of the private-law provisions were discussed, article per article, in close consultation with all interested parties from the industry, including RBSA. The existing public-law provisions were reorganised into a coherent whole.
Unified interpretation of the test for breaking the shipowner’s right to limit liability under the IMO conventions
Following the decision of Spain’s Supreme Court in the Prestige case, as well as similar decisions in previous cases (including the Nissos Amorgos and Pacific Adventurer), the shipping industry became very concerned about the systematic breaking of the shipowner’s right to limit liability.
Over time, the IMO has developed a comprehensive framework of liability and compensation conventions for pollution damage caused by ships and other maritime claims: the Civil Liability Convention and the IOPC fund convention, on which later conventions have been based; the Bunker Convention; the Wreck Removal Convention and the HNS protocol.
Balance is one of the fundamental principles underlying said IMO conventions. This means that there is a need to reach a compromise between the interests of the claimants and those of the party likely to be liable, i.e. usually the shipowner. In exchange for accepting strict liability, the shipowner has a virtual, unbreakable right to limit his liability with respect to claims under the convention.
The 1976 Limitation of Liability for Maritime Claims Convention (LLMC) and its related protocols feature a similar balance. As the LLMC does not deal with liability as such, the balance achieved involved a considerable raising of the liability limit per tonnage applicable pursuant to the earlier 1957 limitation convention, whereas the shipowner was granted a quasi-unbreakable right to limit his liability with respect to claims under the convention. Although several protocols linked to the 1976 LLMC have considerably raised the liability limit, they have left the test for breaking the right to limit unchanged, which clearly shows that states accept such principles on a large scale.
The test for breaking the right to limit is provided for by article 4 of the 1976 LLMC: " A person liable shall not be entitled to limit his liability if it is proved that the loss resulted from his personal act or omission, committed with the intent to cause such loss, or recklessly and with knowledge that such loss would probably result."
Both ICS and the International Group raised their concern at the repeated breaking of the shipowner’s liability, first with the IOPC fund and then with the IMO Legal Committee (LEG). They proposed to develop a unified Interpretation of the test for breaking the shipowner’s right to limit liability under the IMO conventions. The Submission received overwhelming support from governments at the IMO Legal Committee number 106 (March 2019), including Belgium.
It was decided that the work of the informal correspondence group, coordinated by the International Group and ICS, would be conducted during the next two sessions of the IMO Legal Committee with recommendations for a draft unified interpretation of Article 4, based on the principles identified. RBSA strongly supports this submission as well as the proposal of the IMO Secretariat to adopt a decision within the framework of a Conference of State Parties, held in conjunction with a session of the IMO Legal Committee, in order to gain more legal weight. It is encouraging that Belgium shares this view.
UNCITRAL Judicial Sale of Ships
In May and November 2019, a UNCITRAL Working Group met to consider a draft convention prepared by the Comité Maritime International (CMI) on the recognition of foreign judicial sales of ships, known as “the Beijing Draft”.
Together with Peter Laurijssen, Head Legal of CMB and technical expert in this matter, RBSA participated in the two meetings of the UNCITRAL Working Group on behalf of ICS and BIMCO. Our attendance is important given that shipowners are central to the proposed instrument, whether as the owner of the ship being sold or as an interested purchaser, or as creditor/claimant in the distribution of the sale proceeds of another owner’s ship. But RBSA is also very supportive, convinced that this instrument will create legal certainty.
The state parties attending the above-mentioned meetings of the UNCITRAL Working Group recognized that the maritime industry and ship finance require that the judicial sale of ships remains an effective way of securing and enforcing maritime claims and judgments against shipowners. Any uncertainty for the prospective purchaser regarding the international recognition of the judicial sale of a ship, including the deletion, transfer or registry thereof, may exert downward pressure upon the sales price, very much to the detriment of claimants. Therefore, it is necessary to provide sufficient protection to purchasers of ships at judicial sales. This can be achieved by limiting the remedies available to interested parties intent on challenging the validity of the judicial sale and the subsequent transfer of vessel ownership. Once a ship has been sold by way of a judicial sale, the ship should in principle no longer be subject to arrest for any claim having arisen prior to its judicial sale.
The Working Group agreed that the Beijing Draft provides a useful basis for its deliberations on the topic. In line with the CMI draft, the scope of the instrument remains narrow, i.e. mainly confined to the process following a judicial sale. This means uniform rules are being adopted with regard to the notice to be given of the judicial sale, the legal effects of that sale and the deregistration or registration of the ship. Topics such as private international law, distribution of sale proceeds, claims, liens & mortgages, etc. are to remain outside the scope of the Draft.
For the time being, the EU member states, including Belgium, remain free to speak for themselves during the deliberations, as the EU competence remains undecided. Depending on the scope of ‘judicial sale’ eventually agreed, the European Commission might claim competence at a later stage. We appreciate the support of Belgium for this project and the excellent cooperation with RBSA in this endeavour. Their efforts have led to the election of Belgium to UNCITRAL for the period 2019-2024. They will thus be able to play an active role in the development of this international instrument.
The number of Contracting States to the International Convention on Liability and Compensation for damage in Connection with the carriage of Hazardous and Noxious Substances by Sea (hereafter HNS Convention) currently stands at five. With Norway, Canada, Turkey, Denmark and South Africa the gross tonnage requirement for entry into force of the Convention has been met. However, in addition to meeting the threshold of 40 million tonnes of contributing cargo, ratification by seven more states is needed.
In that perspective it is very encouraging that Belgium has reached an agreement with the Netherlands, Germany and France to ratify simultaneously in order to avoid unfair competition between their ports. As it takes one year to implement and collect data, ratification cannot be expected to happen before two years at the earliest.
Being the cornerstone of the maritime liability conventions, the HNS Convention is a powerful tool for ensuring maritime safety and security. With this in mind, RBSA closely cooperates with ICS and ECSA to pave the way for the convention’s speedy entry into force.
In the 19th Century, international shipping transitioned from sail to steam propulsion and in the 20th Century from coal to oil. In order to meet the final goal of zero emission waterborne transport later this century, the industry is at the start of another ‘Propulsion Revolution’ to zero emission shipping, using energy from renewable energy sources.
According to a study, published by the Swedish Environmental Research Institute in 2019, shipping still is the most environmentally sound transport mode today to carry tonnes of goods and commodities over far distances (in terms of CO2 tonne/shipment).
To maintain this lead position and to adequately address the challenges ahead the maritime industry must step up its efforts, as climate change is becoming an increasingly urgent problem. The fossil fuels that have dominated our industry for more than a hundred years will need to be replaced in the upcoming years by new alternative and more sustainable fuels.
RBSA remains committed to tackling the challenges and is undertaking actions to increase the sustainability of the Belgian fleet. These are not only related to limit the impact of air emissions, but they focus as well on reducing shipping emissions to water.
Today, more than ever before, the shipping industry clearly comes under pressure to take full responsibility and to accelerate the transition to zero-emission waterborne transport. At the same time, it is clear that shipowners cannot do this alone, as the issue needs to be addressed together with all stakeholders within the maritime cluster: shipowners, ship repair yards, fuel producers and suppliers and ports who need to have appropriate infrastructure in place. Only with a holistic approach at the international level can we ensure the creation and preservation of a global level playing field while making sure no-one is left behind.
In this light RBSA welcomes the European Green Deal, published by the European Commission at the end of 2019. It is an opportunity to improve the health and well-being of people, to restore the health of our natural environment, to protect our wildlife and to create new economic opportunities as well. Together with our partners in the maritime cluster, we all have an important role to play in this seismic transformation to sustainable shipping.
THE European GREEN DEAL
Climate change and environmental degradation present an existential threat to Europe and the world. To overcome this challenge, the European Commission developed a new growth strategy in 2019 seeking to transform the Union into a modern, resource-efficient and competitive economy, eliminating net emissions of greenhouse gases by 2050, decoupling economic growth from resource use and leaving behind no one and no place.
While the European Union already has a strong track record in reducing its emissions of greenhouse gases while maintaining economic growth, more needs to be done. The EU wants to be leading the way in creating a green and inclusive economy. Hereto, the European Commission presented in 2019 The European Green Deal, a roadmap for making the EU's economy sustainable by turning climate and environmental challenges into opportunities across all policy areas and making the transition just and inclusive for all.
The European Green Deal provides a roadmap with actions to boost the efficient use of resources by moving to a clean, circular economy, to stop climate change, revert biodiversity loss and cut pollution. It outlines investments needed and financing tools available, and explains how to ensure a just and inclusive transition. The Roadmap covers all sectors of the economy, notably transport, energy and industries such as steel, cement and chemicals.
To meet the political ambition of being the world's first climate neutral continent by 2050 will require significant investment. Achieving the current 2030 climate and energy targets is estimated to require €260 billion of additional annual investment, representing about 1.5% of 2018 GDP. This investment will need the mobilisation of the public and private sectors. For the private sector to contribute to financing the green transition, the Commission will present a Green Financing Strategy in 2020.
Limiting our sulphur emissions to air and water
Since 1 January 2020, new international measures regarding the sulphur content of bunker fuels have entered into force. RBSA has always been advocating these strict regulations and low sulphur fuels and therefore we have welcomed its final entry into force. Reducing the sulphur content of fuels to 0.5% outside SECA’s (and 0.1% inside the SECA’s) will deliver significant environmental benefits, not least to the health of coastal populations.
To assist the industry with the transition and to ensure a continuous, safe and competitive trade, IMO agreed to and published guidelines in 2019 for a consistent implementation of the O.50% sulphur limit, including a procedure to report the possible non-availability of compliant fuel oils (FONAR).
While the oil refining industry will need to take important decisions to ensure that sufficient quantities of compliant fuel will indeed be produced, RBSA has also been emphasising the need for Governments and Port States to ensure the quality and compatibility of these new low sulphur fuels. Under the lead of our Dutch counterparts, RBSA has been, together with our colleagues in Germany and the ports located in the ARA region (Antwerp -Rotterdam – Amsterdam and Hamburg), advocating the introduction of a bunkering licensing scheme. A proposal will be submitted to the upcoming MEPC 75 in 2020. A bunkering licensing scheme would allow the competent authorities to monitor bunker deliveries and to better ensure their quality and compatibility, by increasing the transparency throughout the whole bunker delivery chain.
Exhaust gas cleaning systems
For several years, IMO has authorised the use of exhaust gas cleaning systems as a means for shipowners to comply with the sulphur emission limits. In the early days, the installation of these systems was even encouraged by the European Union. Some frontrunner shipping companies installed these systems in good faith at that time (to avoid emitting more and more sulphur into the air). RBSA has never been very supportive of the concept, but our association has always acknowledged that companies who have installed these systems in good faith should not be punished.
However, through increasing awareness and research and given the availability of safe and compliant new low-sulphur fuels, RBSA believes that the time has come to reconsider the concept of open loop scrubber systems and to examine a possible restriction on the installation and/or use of any new EGCS. As such, in 2019, RBSA supported the submission of the European Commission and the European Member States to IMO’s MEPC regarding the evaluation and harmonization of rules and guidance on the discharge of liquid effluents from EGCS into waters, including conditions and areas. This new output was created in 2019 for the 2020-2021 biennial agenda of the PPR Subcommittee and the provisional agenda for PPR 7, with 2021 as the target completion year.
The EU Member States and the EU Commission submitted a proposal to IMO in 2019 supporting the earlier call by Canada and other countries to introduce a new output work item on noise emission reduction. To anticipate on the future roll-out of this topic, RBSA engaged in a project together with the Belgian Federal Public Service of Health, Food Chain Safety and Environment and the Belgian Federal Public Service of Mobility and Transport. The study will monitor, amongst others, the noise emissions, interestingly linked with CO2 reduction measures taken on board of Belgian ships. The study will run and be finalised in the course of 2020. The outcome will be submitted to IMO for information and dissemination purposes in 2021. RBSA hopes to be able to deliver good and reliable data which can help steer the debate when needed.
Less CO2 and Greenhouse Gasses towards zero emission shipping
On 13 April 2018, IMO adopted a strategy to reduce GHG emissions from shipping. By 2023, IMO Member States will have to decide how shipping will improve its energy efficiency (expressed in g.CO2/ton.km) by 40% compared to 2008 levels, with the final aim of a 50% reduction in GHG emissions by 2050 compared to 2008 levels, with a strong emphasis on zero emissions by the end of the century. This will ultimately align emissions from shipping with the Paris Agreement. RBSA is moving ahead on this target.
In the course of 2020, IMO Member States will need to decide on short-term measures enabling industry to achieve a 40% reduction, if such measures are to become effective by 2023. Several measures were put forward during the past year, and after an additional intersessional working group on Greenhouse gasses at IMO in 2019, the group agreed to focus on the joint development of two mandatory goal-based measures for existing ships, a technical measure, the EEXI, and an operational measure. A new fourth IMO GHG study has been commissioned in the meantime, to assist IMO in dealing with the challenges ahead.
RBSA supports the Belgian competent authorities where possible in order to find the best possible solution at IMO. The sooner adequate short-term measures are in place, the sooner the focus can switch to the next immense challenge, i.e. developing effective long-term measures to meet the 2050 aim and to phase out all GHG emissions by the end of this century, and if possible, even sooner.
In March 2019, ICS made an important submission to IMO in order to highlight the fact that, when account is taken of projections for future trade growth, the industry cannot achieve the 2050 GHG reduction target using fossil fuels alone. This may require an efficiency improvement of around 90% compared to 2008, unattainable with current propulsion systems. If the 2050 reduction target is to be met, commercially viable low-emission ships need to start appearing on the market by the 2030s.
For RBSA and its members, the momentum has arrived to start exploring long-term measures enabling the industry to effectively enter into the age of net zero emissions. IMO urgently needs to develop policies to incentivise the uptake of sustainable alternative low-carbon and zero-carbon fuels and the transition to zero-emission ships.
Work has begun in particular on the development of lifecycle GHG/carbon intensity guidelines for (alternative) fuels, e.g. ammonia, bio-fuels and e-methanol. The last intersessional working group on greenhouse gasses gave priority to the development of "tank-to-propeller" emission factors for alternative fuels, noting that it was important to be cognizant of upstream emissions ("well-to-tank"). Well-to-tank emissions are very relevant to assess the sustainability of alternative fuels and to identify the GHG emissions savings that low-carbon and zero-carbon fuels can bring about in the international shipping sector.
However, the technologies necessary to achieve the ambitious 2050 IMO goals do not currently exist at a scale or in a form commercially viable for widespread use by international shipping, especially for transoceanic voyages. RBSA therefore believes that support for massive research and development activity needs to be at the centre of the implementation of the IMO strategy by Member States.
Recognizing this, the industry submitted a proposal to IMO to establish an International Maritime Research Board that would manage an international Maritime Research Fund. This fund would be established through an international bunker levy system and paid for by the shipping industry (current proposal is USD 2/tonne of fuel).
RBSA is in favour of such a system, through which the global shipping industry internalises its external costs to human health and the environment. In order to keep the fleet competitive, any such system needs to be developed at the international level. As such, RBSA’s plea to the European regulators is for the EU to take the lead and push for the establishment of such a system at IMO level. Thereto, the EU and its Member States need to find an agreement with all other IMO Parties, taking into account the special needs and concerns of the Small Islands Developing States, rather than developing an EU regional system, such as an emission trading system.
Zero emission shipping
RBSA supports the research for cleaner fuels and is engaging in different fields to help set out the trajectory towards zero emission waterborne transport. Through cooperation with competent authorities and other frontrunner associations, RBSA hopes to accelerate the switch to zero-emission shipping.
- The Maritime Industry Decarbonisation Council, MIDC, as established by RBSA in 2016, continues to provide a forum for exchanging relevant information and studies regarding ongoing projects. The decarbonisation issue calls for urgent action: increased efficiency, research and innovation, access to sustainable finance and legal certainty are topics that can be tackled through this dedicated platform.
- During the second half of 2019, the EU Commission selected partners, including RBSA, to assist them in the European Sustainable Shipping Forum, ESSF, with tackling the challenges of developing Sustainable Alternative Power Systems for Shipping (SAPS). RBSA aims to provide input from the field, where needed, to the EU Commission services on feasible solutions to decarbonise the shipping industry.
- Together with the Waterborne Technology Platform, and other stakeholders from the maritime cluster such as the shipyards, ship builders and other Members of Sea Europe, RBSA accepted a Partnership in the STEERER project. This project, funded under Horizon 2020, will focus on the massive transition of both the existing fleet as well as the new-built fleet towards zero-emission performance in 2050, while respecting the need for sound business cases for shipowners and operators. STEERER will concentrate on a selection of the most promising solutions per segment of the waterborne transport sector and tackle barriers to their further development and the deployment of innovation.
EU MRV and EU ETS
EU Monitoring Reporting and Verification (MRV)
Shipping is a global industry requiring uniform global rules. In February 2019, after concluding a consultation round held in 2018, the European Commission issued recommendations on possible alignment with the IMO regime for the collection of data on ship CO2 emissions. ICS and the European Community Shipowners’ Associations (ECSA) submitted detailed comments on this document. However, as anticipated, the Commission did not propose any significant changes regarding its approach and only minor alignments were proposed to the IMO DCS.
Although RBSA is in favour of the increased level of transparency, the question remains how the additional data will be used to achieve an effective GHG reduction. RBSA reiterates that double reporting places an additional administrative burden on ships. Therefore, there needs to be some clarity as to how the data will lead to GHG reduction in line with the IMO Initial Strategy.
In addition, the EU parliament clearly indicated as early as 2019 their intent to go even further, for instance by including shipping in the EU ETS.
The main step towards decarbonisation is to monitor GHG emissions, as Belgian shipowners have been doing for many years. Thus energy-efficiency can be analysed and the impact of an investment in fuel consumption reduction technology can be ascertained. RBSA was the first shipowners’ association to analyse the energy-efficiency of its national (i.e. Belgian) fleet. The first study made in this regard was published in 2009, the second (with the University College of London) in 2015.
The European commission, through the EU MRV system, set requirements related to energy-efficiency for all vessels calling on EU ports. Although a global system is always the preferred solution, the philosophy behind the EU MRV systems makes sense and RBSA has always been supportive of the proposal. The MRV directive should therefore stick to it’s aim and not try to expand its scope by including shipping in an ETS.
Emission Trading System (ETS): a regional measure?
In 2019, the European Commission called for the inclusion of the shipping industry in the existing EU Emission Trading System (ETS). RBSA expressed its fear that regional measures, such as a European ETS will only impact a small part of the fleet calling on EU ports, while the majority of the world fleet will be left out. CO2 reduction gains might conceivably be negligible, in particular when taking into consideration the administrative burden, the efforts and costs to all Parties involved: the EU Member States, the ports and shipowners.
A major concern is the likely inability of such a system to adequately and efficiently facilitate innovation. If the shipping industry is to meet the 2050 emission reduction targets, it means that on average, considering the yearly growth of world trade, every ship will need to reduce its emissions by at least 85 %. In the knowledge that ships are built to last 20 – 30 years, realistically, the first very low (or zero) emission ships need to be put on the water by 2030. This means that funding for research and innovation is needed today. Complex EU financing mechanisms, when in place, would most likely come too late to trigger timely, needed innovation.
An additional concern is that regional systems tend to endanger any agreement that could be reached at the global level. As shown by graph xxxx, CO2 emissions accounted for under the EU MRV represent a fraction of CO2 emissions from global shipping.
Apart from these concerns, the main concern is that it is not clear how the ETS would work for shipping, nor what the impact would be on the different segments and types of trade, Rolling out an ETS for shipping unilaterally at this stage creates too much legal uncertainty for shipowners, operating in a competitive world-wide market.
Sustainable Finance: EU Taxonomy
As mentioned above, significant investment will be required to meet the political ambition of becoming the world's first climate-neutral continent by 2050. Finance being a critical enabler of transformative improvements, the European Commission established a high-level expert group (HLEG) on sustainable finance as early as 2016. The group was mandated to provide advice on how to redirect public and private capital towards sustainable investment and to identify measures protecting the stability of the financial system from environment-related risks. The Commission’s action plan on sustainable finance is based on HLEG recommendations.
Sustainable finance is not a new concept though, as the UN Global Compact introduced the term ESG in 2004 and laid the foundations for environmental, social and governance investment. Support for ESG has grown consistently and rapidly since then, but, in the absence of a common definition, banks have been relying upon various international frameworks and standards to define ESG factors, and some of them even use their own definition.
One of the key actions proposed by the HLEG to reinforce the links between finance and sustainability involved the establishment of a clear and detailed EU classification system – or taxonomy – for sustainable activities. This would create a common language for all players in the financial system. A Technical Expert Group (TEG) on sustainable finance was set up in 2018 to provide assistance for the development of the EU classification system and other matters.
Starting from NACE codes, the TEG identified priorities within the potential range of economic activities. Based on the Eurostat 2016 emission inventory, the list of economic activities narrowed down to macroeconomic sectors, either high-emission industries, substantial emission contributors or enabling sectors:
- Agriculture & forestry
- Electricity, gas, steam and air conditioning supply
- Water, sewage, waste and remediation
- Information and communication technologies
The resulting list of economic activities helps investors understand whether an economic activity qualifies as environmentally sustainable. It sets performance thresholds or technical screening criteria for activities which:
- substantially contribute to environmental objectives – starting with climate change mitigation or adaptation;
- avoid significant harm to other environmental objectives, including those focused on pollution, waste and the circular economy, water and biodiversity.
The TEG has also looked into the sustainability of maritime shipping. Whilst zero direct emission fleets should obviously be eligible, there is a need to consider approaches to maritime shipping based on the efficiency of transport fleets. Discussions in this area were not concluded during the timeframe of the TEG and should be continued in further work on the Taxonomy.
RBSA has been cooperating closely with the other shipowner associations and ECSA to make sure that the versatility of the shipping industry is well understood and to create awareness of the numerous R&D initiatives in progress. The technical report and annex published in March provide insight into the methods applied by the TEG to assess other economic activities such as inland waterway transport. Although performance tresholds and technical screening criteria for evaluating deep sea and short sea shipping will require more sophisticated definitions, this work is very much necessary, especially since the EU shipping industry is mostly backed by bank loans. Financial institutions and investors will want to align their portfolio as much as possible with the taxonomy. All economic activities left out of the taxonomy might be seen as non-sustainable and their borrowing costs may conceivably incur surcharges. Additionally the latter’s investor base will be reduced.
Safe and environmentally sound ship recycling
Inventories of Hazardous Materials
RBSA advised its members on several occasions to develop IHMs for European Flagged Ships and ships that would trade in Europe, in anticipation of the requirements entering into force in late 2020. Moreover, Port State Control within Europe could be expected to take a stringent approach to enforcement from 1 January 2021, notwithstanding that full clarity is not available for PSC, and that ECSA will need to liaise with EMSA to raise its concerns and offer possible solutions.
The problem of asbestos identified on board still exists and RBSA has been in contact with the Belgian Maritime Inspectorate regarding the recommendation under MSC.1/Circ.1374. This states that illegally installed asbestos should be removed within 3 years of identification. It seems that this requirement varies from state to state and that some previously more stringent states were expected to take a more pragmatic approach to application.
The EU SRR
In 2019, RBSA was part of the ECSA delegation to India, Alang, and was able to witness the true state of play and positive changes on the ground at the ship recycling facilities. After the fact-finding visit, ECSA again called on EU institutions to recognise the tremendous improvements in some Indian ship recycling facilities and to finalise the application process of those facilities who applied to be included in the EU list almost 4 years ago.
Since 1 January 2019, EU-flagged vessels can only be recycled at facilities included on the EU list. Unfortunately, no facilities from South Asia have been included yet. In 2019, after the withdrawal of China from the ship recycling market, South Asia reached over 90% of the world’s recycling capacity, with Bangladesh taking over the lead from India.
For the EU Ship Recycling regulation to remain relevant, a geographically well-balanced list needs to be in place real soon now. If not, apart from the risk of not being used, the EU regulation could have the negative side effect that Indian recyclers, who have invested time and money to upgrade their facilities, may lose their market share to their competitors in Bangladesh, who might still apply the plain beaching method, without any precautions and accompanying measures taken to guarantee the safe and environmentally sound recycling of ships, as prescribed by the EU SRR and/or the IMO Hong Kong Convention. The EU SRR will, in that case, hamper the entry into force of a global regime, instead of facilitating it, as required by the legal text of the EU SRR itself.
The Basel Ban
Together with ICS, RBSA investigated the impact of the Basel ban, which became effective in 2019. This global entry into force means that the export of hazardous waste from a developed (OECD) State to a non-OECD State is prohibited.
On the other hand, the Basel Ban creates an opportunity the EU to enter into a bilateral arrangement with other Basel signatories (e.g. India) regarding the export and import of hazardous waste. If they want to, the EU Commission, being a Basel Member, could start the dialogue with India’s competent authorities to reach an agreement on the issue. Thus the Indian facilities meeting the requirements could be included in the EU list.
A better instrument: IMO HKC
ECSA urged the European Commission to facilitate ratification of the international Hong Kong Convention on ship recycling by executing transparent approval procedures for non-EU facilities that applied for inclusion on the EU list.
In 2019, the first condition for the IMO Hong Kong Convention’s entry into force had been met, i.e. ratification by fifteen States. The second and third conditions require that the fleets of the ratifying States constitute no less than 40% of the world’s fleet in GT terms, and that the combined capacity of their ship recycling industries shall correspond to at least 3% of the tonnage of their fleets. Currently, the second and third conditions are met for up to 75% and 87%. Furthermore, either a Chinese ratification in the immediate term; a Chinese and Hong Kong ratification in the short term; or a ratification by Bangladesh by its self-imposed deadline of 2023 and either an appropriate large Flag State or coordinated ratification by smaller Flag States, would each bring the Convention into effect.
Extension of the aid measures
On 29 March 2019, the Flemish government approved in principle the Decree amending articles 1 and 3 of the Decree of 13 November 2015 of the Flemish government instituting the exemption from some employer contributions for companies of the merchant navy and seagoing tug industries, as well as amending articles 1 and 3 of the Decree of 23 September 2016 of the Flemish government instituting the exemption from some employee contributions for companies of the merchant navy. This Decree provides for the reduction of the contributions to be paid for seafarers employed in the merchant navy and the dredging industry. Said exemptions are based on operations already existing and used in 2014.
Technology has been evolving considerably since then. The merchant navy has developed numerous activities regarding the construction of offshore windfarms. Building and maintaining such wind power facilities on the high seas requires specially-designed vessels capable of laying cables and pipes, dump stones on the sea floor and lift goods at sea.
Currently the above-mentioned operations are outside the scope of the existing reduction of the social security contributions payable by the merchant navy, notwithstanding the fact that such operations are closely linked to ocean-going shipping (e.g. in relation to knowhow as well as social legislation and safety regulations). These activities have become part and parcel of the maritime industry. Indeed, nowadays shipowners in Flanders operate several types of vessels specially-designed for a wide range of activities, from transport to installation and maintenance work.
Furthermore, these operations make a major contribution to both economic growth and employment levels. However, they are also exposed to increasing international competition from low-wage Flag States. Currently, European shipowners are still capable of competing internationally in this subsector, although global competition is manifestly growing. Hence the enormous importance of creating a level playing field. Various studies emphasize the importance of aid measures for these operations (i.e. installation works at sea). A number of EEA countries, including Malta, Denmark, Germany and the Netherlands have already authorized aid measures for these activities, which they justify on the grounds that they wish to preserve economic growth and employment.
If Flanders is to remain on the cutting edge of installation and maintenance works at sea, the aid measures will need to be expanded, even more so given the importance of these operations for the Flemish economy and employment. The maritime industry using cable laying vessels, pipe laying vessels, crane vessels, etc., generated € 1.884 million of (direct and indirect) added value in 2016 for the Flemish economy (not only hydraulic construction, but also turbines and power grid works). It is estimated that all projects combined may generate about 16,000 jobs in the offshore windfarm industry by 2030. The share of the subsector in this total is estimated at about 25% (i.e. about 4,000 jobs by 2030). Additionally, the proposed measure will have a major impact in boosting the sector’s technological development and the growth of the Belgian fleet.
Consequently, this expansion is fully in line with the 2004 European guidelines, setting conditions under which reductions and exemptions can be granted with respect to social security contributions. Flanders has notified Europe of the planned modifications. The European Commission is expected to approve the changes soon, which would allow the whole scheme to become effective before the end of 2020.
Study on Social Aspects within the maritime transport sector
In 2019, the European Commission took a careful look at the social aspects within the maritime transport sector. The EU especially wants to know how the social status of seafarers has evolved since 2011 (the previous study). The following themes are to be considered:
- Training and employment opportunities
- Decent work
- Access to the justice system
- Enforceability of social rights
- Policy mechanisms
The study is being carried out by 4 different consultants: Coffey, World Maritime University, TIS and Oxford Research. In this framework, very detailed workshops took place, with the participation of ECSA (including RBSA), ETF and several Member States, to examine to what extent reality matches theory. The European Commission will use this report to address regulatory shortcomings and improve seafarer protection.
At the time of writing this annual report, said report has not yet been published.
ECSA: Maritime Growth Plan
On 28 October, ECSA announced their maritime growth plan to the European Commission and the Members of the European Parliament. In this plan, shipowners emphasize the importance of a strong European maritime cluster to the entire European Union. It is hoped to create a strong maritime cluster by providing outstanding maritime education and making maritime jobs extremely attractive.
ECSA (and RBSA) are convinced that Europe’s shipping industry can gain additional strength and grow even more by:
- improving the image of shipping through a communication campaign;
- making the general public aware of career opportunities in the maritime sector;
- improving the skills and knowledge of European seafarers in order to improve their job prospects;
- raising awareness, among European seafarers, of their employment opportunities;
- making statistics available.
The European Commission very much welcomed this plan.
Maritime Competence and Career Centre
|TYPE||End of 2017||End of 2018||End of 2019|
|Merchant vessels||76||5.009.333||85||6 019 168||93||6.252.293|
|Tugs and offshore supply vessels||56||43.719||48||37.140||45||31.370|
|Total Gross Tonnage||176||5.236.493||176||6.271.473||177||6.453.026|
|Source: Federal Government Agency for Maritime Transport|
|OWNERSHIP OF WORLD FLEET ranked by dead-weight tonnage, 2019 (thousands of tons)|
|Country||National flag||%||Foreign flag||%||Total|
|7||Republic of Korea||12.419||16.19||64.283||83.81||76.702|
|SOURCE UNCTAD based on data from Clarksons Research|
A look back at 2019 by ICS
As I write this 2019 seems to have taken place in a different world where the focus of our efforts was on environmental, safety, security and employment issues. Now the focus of much of the maritime sector, like the rest of the world, is managing the implications of the COVID-19 pandemic.
Last year the delivery of the IMO Strategy on reducing Green House Gas Emissions focused our minds on moving to agree the short-term measures to reduce emissions. In parallel the industry was focused on the long-term implications for the industry in the drive to meet the exacting IMO 2050 CO2 reduction targets.
A significant achievement in 2019 was the development and submission of the industry proposals to form the world’s first collaborative shipping R&D programme to help eliminate CO2 emissions from international shipping. The proposal included core funding from shipping companies across the world of about USD 5 billion over a 10-year period.
The International Maritime Research and Development Board (IMRB) will be financed by shipping companies worldwide via a mandatory R&D contribution of USD 2 per tonne of marine fuel purchased for consumption by shipping companies worldwide, which will generate about USD 5 billion in core funding over a 10-year period. This USD 5 billion in core funding over a 10-year period generated from the contributions is critical to accelerate the R&D effort required to decarbonise the shipping sector and to catalyse the deployment of commercially viable zero-carbon ships by the early 2030s. We are working with the IMO to ensure that COVD-19 pandemic does not delay the introduction of this innovative proposal.
In addition to developing this proposal the industry was preparing for the introduction of the worldwide Sulphur Cap on 01 January 2020 and the fundamental implications this would have for shipowners. Little did I think as 2019 came to an end that before the month of January was out, we would have issued guidance to shipowners in the face of the Coronavirus. The concerns before the turn of the decade were all about how the implementation phase would go. The industry had been working hard to ensure that we were ready for 1st January, but we still had concerns over safety and the availability of compliant fuels in every port worldwide. As we all know the shipping industry is adaptable and we have adapted to this new normal.
We will also adapt to the new normal that the COVID-19 pandemic will present to the world. Our priority since the outbreak in Wuhan and the initial impact in China and then as the pandemic encompassed the globe has been our seafarers. Our seafarers are the lifeblood of our industry. We are a unique sector full of amazingly talented people who we rely upon to keep the world supplied with the food, fuel and goods that everyone relies upon.
2019 was an amazing year for the shipping industry 2020 will be an even more eventful year but together I know we will succeed. This is the strength of the International Chamber of Shipping network of National Associations. At a time of transition, we are stronger together.
ECSA - Challenging times for shipping continued in 2019
The European shipping industry faced another challenging year in 2019. At global level the trade war between China, the USA and Europe created unrest, negatively influencing world trade and world economic growth. Attacks on shipping in the Gulf of Guinea, the Gulf of Oman and the Strait of Hormuz added to the concerns on the continuity of global trade flows.
At European level Brexit dominated a large part the agenda of the European Commission, the Council and the European Parliament. A no deal Brexit was prevented for the time being, as a result of the agreement between the UK and the EU. However, uncertainty remains as an agreement on the future relationship between the UK and the EU has to be reached in 2020, otherwise a hard Brexit will still be the case.
The new European Parliament held its constituent session on the 2nd of July. Generally speaking for many political groups, the fight against climate change has become a top priority, with strong consequences for the position of the EP on maritime environmental files. The new European Commission, after a lengthy approval process, which saw three candidates rejected by the European Parliament and the United Kingdom refuse to name a candidate, von der Leyen’s Commission composing of 27 members took office on the 1st of December 2019.
In line with the new cycle of the EU institutions, ECSA published its new strategic priorities for 2019-2024. Entitled "Sailing ahead - European shipping sets ambitious goals for its next chapter", the publication outlines ten priority areas which the European shipping industry will be focussing on. Climate is the top priority. The brochure states that the industry is keen to work with its European and global partners to reach the goal set by the IMO to cut CO2 emissions by at least 50% by 2050. This means we need to start working now to ensure the necessary alternative fuels, bunker infrastructure and technologies are developed in time to be taken up on a global scale.
Following this are the issues of trade and competitiveness. Faced with the disruptions caused by the US-China trade war, the breakdown of the global multilateral trading system as well as the state-funded unfair competition posed by other global shipping centres, the European shipping industry needs to recalibrate its competitive advantages in order to remain on top of its game.
Closely related to these priorities is the area of human resources. Europe has a long maritime tradition that spans over at least three millennia. Our industry is strong due to our unique knowhow and talent pool, resulting from this history. Attracting and retaining talent is intrinsic to the survival of our industry. This can only be achieved by investing in training and education, and respecting diversity and social values. We also need to align this with our ambitious climate goals and the use of the latest maritime technologies, to make our companies more competitive and attractive to investors and customers.
The other priority areas covered in the new strategy publication are: internal market, digitalisation and innovation, safety, legal affairs, taxation and better regulation.
On the 11th December, President Ms Ursula Von der Leyen presented the European Green Deal at the European Parliament. As announced by the Commission President, the European Green Deal aims to create a cleaner, greener, healthier environment as well as a sustainable, resilient, growing economy. As an energy-efficient mode of transport, with CO2 emissions per ton-kilometre substantially lower than other modes, the shipping industry is making good steady progress towards decarbonisation. Despite the phenomenal increase in trade volume, global shipping lowered its CO2 emissions between 2008 and 2018. Yet much more still needs to be done. The statement in the Green Deal to include shipping in the European Emission Trading System (ETS) will be discussed in the course of 2020, once a concrete and detailed proposal will be on the table.
The pledge in the Green Deal to ramp up the production and deployment of such fuels and the necessary infrastructure is very much welcomed by the industry.
The industry also noted the recognition by the European Commission, that shipping is a low-carbon mode of transport, as the proposal promotes a model shift in Europe from road to waterborne transport, including short sea shipping.
Under the responsibility of the previous Commission for Transport, Violeta Bulc, important agreements were reached on the European Maritime Single Window environment, a regulation that will streamline and harmonise the administrative procedures for ships calling at EU ports. Re-use of data in and between EU ports will be made possible. The administrative burden on the crew on board vessels will be reduced substantially. Foreseen year of entry into force is 20205.
Finally, in April 2019 the agreement on the revision of the Port Reception Directive was welcomed by the shipping industry. The revised directive harmonises the EU regulatory framework with the IMO regulations. In addition, ECSA supports the polluter pays principle in return for the safe and environmentally sound management of the ship generated waste. Ships will be allowed to deliver all garbage when paying a fixed waste fee, without port-specific limitations towards the volumes delivered. This will guarantee that ports keep investing in efficient port reception facilities, which are to be supported by transparent cost recovery systems.
The rbsa team
BOARD OF DIRECTORS
LUDWIG CRIEL, Chairman
WILFRIED LEMMENS, Managing Director
STEVE VAN HULLE
RONALD DE PAUW
PATRICK VAN DROM
BOECKMANS SHIP MANAGEMENT
BVBA Van Meterenkaai 1
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CMB (BOCIMAR INTERNATIONAL) N.V.
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EXCELERATE TECHNICAL MANAGEMENT BV
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FAST LINES BELGIUM N.V.
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JAN DE NUL N.V.
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