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IN THIS ISSUE
1. Indecision rules in the Red Sea
2. Technical minefield
3. Anchoring perils
4. Cargo integrity
5. Fire prevention
6. Ammonia on ships
7. Ballast water checks
8. Indian waterways
9. Cyber security
10. Hong Kong arbitration
11. Alternative fuels
12. Optimal speed routing
13. Safety figures
14. Fuel projects at risk
15. Green transition
16. Intercargo agenda
17. Disaster risk management
Notices & Miscellany
Readers’ responses to our articles are very welcome and, where suitable, will be reproduced. Write to: contactus@themaritimeadvocate.com
1. Indecision rules in the Red Sea
By Michael Grey
How long is the shipping industry going to put up with the part closure of the Red Sea and Gulf of Aden, because of the ongoing Houthi attacks on its vessels? And not just the industry, because the diversions occasioned by the actions of this criminal gang are costing the whole world a great deal of money. Another two ships were set on fire by their missiles and drones last weekend, so it would seem that their aim is improving with practice.
Is there any sort of policy emerging among the more capable governments to contain or even defeat these pirates? Or is there any more than a vague hope that they will run out of ammunition, lose interest, or return to their normal criminal activities of smuggling and extortion on land? There is something rather depressing about the fact that other than the US and UK, none of the nations which have warships in the area seem prepared to do anything other than defend against Houthi attacks. The car carrier Galaxy Leader still lies off the coast, her poor crew hostages for more than six months. Only good fortune has kept the deaths and injuries aboard attacked ships down to single figures. The responsible owners of the world are settling in to the two additional weeks steaming between Europe and the Far East, with no prospect of anything different. Others take their chances.
For Houthi “high command” (if that is what those posing and posturing in their video presentations can be termed), their campaign must be considered a tremendous success. They can continue their attacks, in just sufficient numbers to dissuade the responsible lines from resuming Red Sea passages, and frightening those whose vessels run the gauntlet into paying large sums in insurance and war bonuses. And while they began their campaign with more selective threats against vessels with Israeli connections, it now appears that their intelligence is less particular, or perhaps more slapdash, in its choice of targets. It would seem to be immaterial.
Is there any reaction in the governments of the civilised world against this miserable stasis? It might be observed that with seemingly half of them engaged in elections, the chances of any more robust action would appear remote. Meanwhile, the Houthis’ paymasters in Iran, who have read and digested manuals of how, through hybrid warfare, weaker states can prevail against materially superior enemies, will be maintaining their supply lines. It is also worth pointing out that the lessons of the Houthi’s success and the ability of a small rebel enclave in a failed state to cause such material harm for such a modest expenditure will not be lost in other grim places, where potential enemies await their chances.
The costs of all these diverted long-haul passages are already being seen around the world. It might be good business for those operating ships, but freight rates have now reached post-pandemic levels and will not be descending any time soon. Those who use ships, which is indirectly most of us, will be already feeling the pain. And think of the economy of Egypt, with the canal working part-time and those ambitious plans for industry along its banks prejudiced by the ongoing conflict.
Why is there such reluctance for more robust action and why are all those who might be prepared to defend their ships against incoming missiles, so afraid of striking back? Fear of the conflict spreading? But what about the seafarers (and their relatives) when they are told that they are bound through the Red Sea? Are they not deserving of consideration? Do the hesitant never think about the example that this is setting to all those malevolent players? To any earlier generation, such a failure to tolerate such a nest of pirates along an important sea lane would have been impossible to contemplate.
Michael Grey is former editor of Lloyd’s List
2. Technical minefield
In its latest edition of London calling Brian Perrott and Patrick Knox of HFW say notice provisions should not become a “technical minefield to be navigated”
Contracts often include provisions barring claims unless notice is given within a specified time limit, thereby providing a contractual limitation period. But they can sometimes also require the notice to state “the nature of the claim”, and to require that this be done “in reasonable detail”.
Whether a notice is sufficient to satisfy the requirements of any given clause will depend primarily on the language of the clause, commercial parties being free to impose whatever requirements they wish.
But a recent Court of Appeal decision* holds that where a clause uses broad and general terms such as “the nature of the claim” and “in reasonable detail”, those requirements should be interpreted in the light of the commercial purposes of the clause. And that it is important that the clause not become “a technical minefield to be navigated”, divorced from the underlying merits of the claim.
The decision further holds that courts should not interpret clauses as imposing requirements which serve no real commercial purpose unless compelled to do so by the language of the clause.
Which way a court may go will nevertheless always be fact-sensitive – so depend very much on the precise terms of the clause in question.
For any party faced with such a clause, they would be well advised to draft their claim notice with a very careful focus on the particular requirements of the clause.
* Drax Smart Generation Holdco Limited v Scottish Power Retail Holdings Limited [2024] EWCA Civ 477
3. Anchoring perils
The recent High Court decision of Afra Oak serves as a timely reminder of how risky it can be to anchor Outside Port Limits (OPL) Singapore. Owners should make sure to obtain the necessary permissions from local authorities when anchoring in these waters. Gard P&I Club has put pen to paper to discuss the issues.
See https://gard.no/articles/double-check-where-you-can-anchor-lessons-from-the-afra-oak-decision/
4. Cargo integrity
The industry bodies of the Cargo Integrity Group continue in their mission to improve safety in the global supply chain. The Group has identified a number of cargoes, commonly carried in containers, which under certain conditions can cause dangerous incidents. They urge everyone handling these goods to follow all applicable regulations, the CTU Code and industry best practices.
In addition to promoting sound packing and shipping practices, the Cargo Integrity Group aims to increase awareness about the types of goods, often less obvious, that can compromise safety in the container supply chain under certain conditions.
The Group has identified fifteen such ‘Cargoes of Concern’ that are commonly transported by sea and intermodally. While these are usually transported safely when regulations and guidelines are followed, the Group has created a list to highlight cargoes that can become hazardous if handled incorrectly. They emphasize that cargoes that are mis-declared or have incomplete or incorrect information about their identity are more likely to be involved in incidents.
This list is not exhaustive, but each item illustrates a common type of hazard, divided into three categories:
Reactive Hazards – These cargoes can catch fire and cause significant damage and casualties under certain conditions. They are generally subject to Dangerous Goods regulations. Examples are:
- Charcoal / carbon
- Calcium Hypochlorite
- Lithium-ion batteries
- Cotton and wool
- Fishmeal and krill
- Seed cake
Spill or Leak Risks – These commodities can present a risk if not packed properly or if they are damaged. Spills or leaks from these cargoes can harm the health of people cleaning up the spill as well as the environment. Examples are:
- Hides and skins
- Wine
- Bitumen
- Cocoa butter
- Waste – recycled engines and engine parts
- Vegetable and other oils, particularly when packed in flexitanks
Improper Packing Consequences – Cargoes that are poorly or incorrectly packed or secured in the container can lead to injuries to personnel or damage to nearby containers, property, or other cargo. Such incidents can cause severe accidents at sea or on land, such as truck rollovers and train derailments. Examples are:
- Logs and timber
- Steel coils
- Marble and granite
In the coming months the Cargo Integrity Group will publish additional guidance on the identification and safe handling of these cargoes.
Dedicated to improving the safety, security and environmental performance throughout the containerized supply chain, a primary goal of the Cargo Integrity Group is to increase awareness and wider use of the IMO/ILO/UNECE Code of Practice for Packing of Cargo Transport Units – the CTU Code.
As part of this effort the Group has developed a ‘Quick Guide’ to the CTU Code, together with a Checklist of actions and responsibilities for the guidance of those undertaking the packing of cargoes in freight containers. These are now available in all six official IMO languages as well as Italian and are available HERE
5. Fire prevention
Global Survival Technology solutions provider Survitec has highlighted the dangers of inadequate maintenance, testing, and inspection of ship fire safety systems in a new white paper, which points to an alarming increase in fire-safety-related deficiencies found during Port State Control Inspections and subsequent ship detentions.
In a white paper released at the Posidonia trade show , Survitec highlights that fire continues to be a leading cause of major shipping incidents, accounting for over 20% of total losses, and the most expensive cause of marine insurance claims. The highest level of fire safety deficiencies in a decade was recorded by the Paris MoU in 2022, and the Tokyo MoU also reported an increase in detentions, with a staggering 15,562 deficiencies reported in 2023.
“Analysts report a 17% year-on-year rise in shipboard fires, which correlates with an increasing number of reports and testimonies from our network of certified service technicians and engineers that document serious faults requiring immediate corrective measures,” says Metkel Yohannes, Director of Service & Rental Solutions, Survitec.
Survitec has found that the economic downturn and the emphasis on cost reduction post-COVID have negatively impacted fire safety, with some shipowners and operators maintaining and inspecting safety equipment themselves in an attempt to save costs.
As Yohannes explains, “We’re finding basic errors and oversights that do not become apparent until either the ship fails an inspection and is detained – or there is a fire.”
He quotes an example. Survitec was called out to a vessel after an engine room fire. The crew had managed to extinguish the fire but suspected there was a fault with their high expansion foam firefighting system. The cause of the fault was a blockage in the system. The crew had installed a new foam pump and forgotten to remove one of the protective caps from the inlet.
Survitec also finds wrong parts being used or poorly fitted, or low-quality parts that deteriorate rapidly and fail. For example, in CO2 firefighting systems, hydraulic hoses are often mistaken for high-pressure hoses but they are not designed for CO2 applications and may burst under pressure.
“We see evidence of a slip in standards regarding basic safety practices but also a wide disparity in service quality between service providers. Approval stamps are being applied to fire systems and appliances that would or should not pass inspection. Some issues are self-evident; for example, rust on a valve or fire extinguisher is clear to see, but other issues are less obvious and can have catastrophic consequences,” says Yohannes.
The white paper highlights an incident involving a bulk carrier. The vessel had completed a fire safety inspection and received full certification from a local service provider. Shortly after leaving port, a fire broke out in the engine room. Over half of the cylinders failed to activate despite the CO2 system having been inspected and approved. While the fire was eventually extinguished, it caused significant damage to the vessel, resulting in off-hire and repair costs estimated between $2-3 million USD.
Yohannes states, “The development and introduction of alternative fuels, including the use and transportation of lithium-ion batteries, brings new fire risks and safety challenges that can’t be ignored. Fire systems and equipment must be maintained and tested as mandated by SOLAS, the IMO and the FSS code.
“Shipowners and operators need accredited service partners they can trust. They must have confidence in the system of approvals. It is clear there are substandard inspections taking place, which is worrying. Although service providers may boost many approvals, they may not be suitably equipped or resourced to perform all the required tests.”
Yohannes concluded, “As an industry, current practice should be reviewed to determine if more oversight and governance, and more quality control procedures are required to protect crew and vessel safety.”
The white paper can be downloaded in full here: https://survitecgroup.com/contact/unveiling-the-true-cost-of-inadequate-fire-safety-inspections/
6. Ammonia on ships
KR has announced a Memorandum of Understanding (MoU) with Hanwha Ocean, Amogy, and Hanwha Aerospace. The MoU, signed at Posidonia 2024, focuses on the technical collaboration and certification for the application of ammonia reformers and ammonia fuel cell systems to ships. The ammonia reformers, used to produce gas with hydrogen as the main component and supply it to fuel cell stacks, are essential equipment for the adoption of fuel cell systems.
Amid the increasing global decarbonisation regulations, ammonia is emerging as a highly efficient alternative fuel. This agreement aims to apply reformers and fuel cell systems to ships, enhancing energy efficiency and reducing carbon emissions, thereby lessening the environmental burden.
The MoU encompasses collaboration across various technological areas related to the application of reformers and fuel cell systems in ships. This includes design, development, testing, and certification of ammonia reformers and fuel cell systems. Ultimately, the safety and suitability of these systems will be verified based on KR’s rules, international conventions and standards, with KR planning to issue a New Technical Qualification (NTQ) certificate.
Kim Hyoungseog, Executive Vice President and CTO at Hanwha Ocean, stated: “This agreement will strengthen Hanwha Ocean’s competitiveness in the eco-friendly ship market. We will continue to take a leading role in developing crucial new technologies for carbon neutrality in the shipping industry.”
Amogy’s CEO, Woo Seonghoon, added: “This agreement brings us one step closer to the commercialisation of eco-friendly ships using Amogy’s ammonia-based fuel cell systems. I believe multi-party collaboration is vital for the decarbonisation of the shipping industry, and we will continue to do our best to ensure the safe introduction of ammonia and ammonia-based fuel cell systems into the ship market.”
Moon Seunghak, Head of E-Propulsion System Business Group at Hanwha Aerospace, commented, “The introduction of ammonia-based fuel cell systems is essential for the decarbonisation of the shipping industry. We expect to maximize synergy through the co-operation of the four companies. This technological development will play a key role in establishing a carbon-neutral ecosystem in the ship transportation market.”
Yeon Kyujin, Senior Vice President of KR, added, “This agreement will be an important milestone in applying ammonia technology to ships. KR will continue to drive the decarbonisation of the maritime industry, by providing technical support to ensure that reformers and fuel cell systems can be safely applied to ships.”
7. Ballast water checks
With the final ballast water deadline fast approaching, UV-based water treatment specialist BIO-UV Group anticipates an increase in inspections as Port State Control (PSC) inspectors check machinery installations, crew competencies and Ballast Water Management (BWM) Plans.
From September this year, all vessels subject to the BWM Convention must have installed a D-2 compliant ballast water treatment system capable of dealing with the maximum number of viable organisms allowed to be discharged. This is less than 10 organisms of 50µm or more per 1m3 of water and less than 10 organisms of 10-++50 µm per 1ml of water.
Yet while there is still a two-year grace period under the Experience Building Phase of Resolution MEPC.290(71), which precludes operators from being penalised for non-compliant ballast water discharge until 2026, ships can still be detained if inspectors find BWM systems poorly maintained, operated and documented.
“We are aware of increased Port State Control inspections in China, Australia, and the USA as they implement Focus Campaigns on ship machinery and electrical system. Although ballast water treatment systems are not being singled out specifically, the Focus Campaigns aim to prevent any mechanical or electrical systems failure onboard,” said Charlène Ceresola, BIO-UV Group’s BWT Project Manager.
“We expect the Paris and Tokyo MoUs to follow suit. If there are clear grounds that crews are incorrectly operating and maintaining the BWM system or if record keeping is lackadaisical ships could be penalised.”
An annual BWMS report is currently a mandatory US requirement for vessels navigating US waters. But elsewhere, as of now, an annual check is only an OEM recommendation supported by IMO Guidelines.
Maxime Dedeurwaerder, BIO-UV Group’s Maritime Division Director, said: “Ship operators really can’t afford for port authorities to suspect the crew doesn’t know how to correctly maintain, operate or calibrate the system.
“A ballast water treatment system is a closed-loop system so regular maintenance is the only way of knowing if a UV-based system’s lamps, reactors and filters are working as they should. It is essential to comply with these checks and maintenance procedures to ensure the continued compliance of the system. An annual system check is crucial.”
The International Convention for the Control and Management of Ships’ Ballast Water and Sediments, 2004 (Ballast Water Management Convention) was adopted in 2004 with the aim of protecting the marine environment from the transfer of invasive species and organisms in ships’ ballast water.
Asian Kelp, Zebra Mussels, European Green Crabs, North Pacific Seastars, Caulerpa taxifolia (killer algae) and the Cholera pathogen are just some of the invasive species ballast treatment systems prevent from spreading.
8. Indian waterways
Indian Register of Shipping (IRS) and the Uttar Pradesh Transport Department have signed a landmark Memorandum of Understanding (MoU) to establish the UP Inland Waterways Authority. This collaboration aims to develop and regulate inland waterways in Uttar Pradesh, enhancing transportation efficiency and fostering economic growth.
IRS will assist the Uttar Pradesh government in formulating the UP Inland Waterways Authority and developing relevant rules based on the IWAI Act 2021 and IWAI Rules 2022. IRS will also provide technical support to the newly formed authority, ensuring the implementation of best practices for safety and green initiatives in compliance with the latest national and international requirements. IRS will further help identify various upscaling opportunities for department officials and other stakeholders, contributing to skill enhancement and capacity building.
This partnership marks a significant step towards sustainable development and efficient utilisation of Uttar Pradesh’s inland waterways, aligning with the broader vision of environmental conservation and economic growth. By leveraging the state’s extensive river network, the authority aims to facilitate seamless movement of goods and passengers, enhance connectivity, and stimulate regional development.
Shri Chandra Bhushan Singh, Transport Commissioner, Uttar Pradesh, expressed his gratitude towards IRS for their ongoing support. He emphasized that the formation of the authority will boost the local economy by providing low-cost and green transportation options for cargo and passengers through navigable channels. He also highlighted the potential for pilgrimage tourism under the vision of Prime Minister Narendra Modi and Chief Minister Yogi Adityanath. Additionally, the authority aims to contribute to river conservation, pollution prevention, and overall improvement in the quality of life for residents.
9. Cyber security
OTESAT MARITEL, a globally recognised brand in the satellite telecommunications market, and classification society Bureau Veritas (BV) have joined forces to certify two cybersecurity solutions, IRIS and s@tGate, according to IACS UR E27 Rev.1 requirements on the cyber resilience of on-board systems and equipment.
IRIS features an e-learning module to raise security awareness, and managed security services provided by the Security Operation Center (SOC) in Southeast Europe, on a 24/7 basis. IRIS integrates seamlessly with OTESAT_MARITEL’s s@tGate platform, which fulfils the Information and Communication Technology (ICT) needs of any shipping company that aims to keep pace with the industry’s ongoing digital transformation.
Although IACS UR E27 Rev.1 will enter into force as a mandatory requirement for vessels contracted after July 1st 2024, it is already considered as the cybersecurity benchmark for the maritime industry. For months, Bureau Veritas has been supporting major equipment manufacturers in complying with this standard, which largely derives from IEC 62443-3-3. By collaborating with all stakeholders affected by the UR E26 and E27 mandates, anticipating shipowners’ needs, and sharing knowledge on these new standards, Bureau Veritas is supporting the maritime industry towards greater cyber resilience.
10. Hong Kong arbitration
Hill Dickinson reports that on 6 March 2024, the Hong Kong International Arbitration Centre (HKIAC) released its case statistics for 2023. These included statistics on applications under the “Arrangement Concerning Mutual Assistance in Court-Ordered Interim Measures in Aid of Arbitral Proceedings by the Courts of the Mainland and the Hong Kong Special Administrative Region” that have been processed by the HKIAC since the Arrangement came into effect on October 1, 2019.
Hong Kong is the only common law jurisdiction outside of Mainland China, which allows parties to arbitral proceedings to apply to mainland courts for interim measures via a bespoke fast track application process.
The Arrangement is only applicable to Hong Kong seated arbitrations. As it does not apply to ad hoc arbitrations, the arbitration also needs to be administrated by a qualified arbitral institution. Every two years, there is an open application exercise for arbitral institutions to apply to become qualified under Article 2(1) of the Arrangement.
The current list of qualified arbitral institutions is:
- Hong Kong International Arbitration Centre
- Hong Kong Maritime Arbitration Group
- South China International Arbitration Centre (HK)
- eBRAM International Online Dispute Resolution Centre
- Asian-African Legal Consultative Organization (AALCO) Hong Kong Regional Arbitration Centre
- China International Economic and Trade Arbitration Commission (CIETAC) Hong Kong Arbitration Centre
- International Court of Arbitration of the International Chamber of Commerce (ICC) – Asia Office
For further details see the Hill Dickinson website.
11. Alternative fuels
ClassNK has released “Guidelines for Ships Using Alternative Fuels (Edition 3.0)”. In addition to safety requirements for ships using methanol, ethanol, LPG, and ammonia as fuel, this edition adds requirements related to hydrogen-fuelled ships, providing guidance for the design of alternative-fuelled ships.
The guidelines comprehensively describe safety requirements for alternative-fuelled ships. It stipulates requirements for installation, controls, safety devices, etc., aiming to minimize the risks to ships, seafarers, and the environment posed by the use of alternative fuels.
In the newly released edition 3.0, the provisions of its rules including part GF of its “Rules and Guidance for the Survey and Construction of Steel Ships” incorporating the IGF Code*, are taken as the basic requirements. Based on the deliberations at the IMO Subcommittee on Carriage of Cargoes, held in 2023, and the knowledge gained from design reviews conducted by ClassNK to date, additional requirements corresponding to the physical properties of hydrogen fuel and assumed hazards are newly established as Part D. Specifically, it includes requirements that contribute to the safety of hydrogen-fuelled ships, such as points of consideration for preventing explosions due to the ease of ignition of hydrogen and impacts on seafarers and the environment due to hydrogen fuel leakage.
As part of the ClassNK Transition Support Services that comprehensively support customers’ smooth transition to zero-emission, ClassNK will continue to support the introduction of alternative-fuelled ships by issuing such safety requirements and guidance for design.
The guidelines are available to download on ClassNK’s website after registration.
https://www.classnk.or.jp/account/en/Rules_Guidance/ssl/guidelines.aspx
* International Code of Safety for Ships Using Gases or Other Low-Flashpoint Fuels
12. Optimal speed routing
ABB has introduced a new feature to its routing services portfolio that will allow vessel owners to manage fuel costs on a through-voyage basis by optimising vessel optimal route and speed at the same time. As what ABB describes as the first solution in the market equipped to optimize track and operating speeds simultaneously against anticipated weather, the feature is included in the ABB Ability™ Routeguard onshore routing service – in a first upgrade since ABB acquired the shipping business of DTN Europe BV and DTN Philippines Inc. earlier this year.
Optimal Speed Routing offers capability to advise operators of any changes they should make to the vessel track or speed to avoid heavy weather as part of overall calculations made within Routeguard covering route optimisation. It uses latest available meteorological information and real-time inputs like vessel daily hire costs, fuel costs and user defined vessel performance models to recommend slowing down to let rougher conditions pass or speeding up to stay ahead of them, thereby minimising fuel consumption on calculated routes to cut costs and reduce emissions as a result.
“Optimal Speed Routing is an exciting addition to our digital offering, and we are grateful to our esteemed new colleagues who joined us recently and brought with them the Routing Services portfolio,” said Osku Kälkäjä, Head of Digital Business, ABB Marine & Ports.
“Adding our routing services portfolio to ABB’s existing digital services is a major milestone and we look forward to further opportunities to complement the offering and keep supporting our customers,” said Jarco van den Brink, Product Manager, Routing Services, ABB Marine & Ports.
In addition to ABB Ability™ Routeguard, the Optimal Speed Routing is available within the Shipping APIs (Application Programming Interface).
13. Safety figures
Annual safety figures compiled by the International Marine Contractors Association (IMCA) show continuing positive offshore safety trends, as the hours recorded increased by more than 50% to 958 million hours.
Key safety metrics registered improvements again this year, including the Total Recordable Injury Rate, Lost Time Injury Frequency Rate, Safety Observation Frequency Rate and Fatal Accident Rate.
The report also features comparative figures from stakeholder groups which allows for cross-sector comparisons. Split by business size, it also enables individual companies to benchmark their own performance with appropriately sized peers.
Commenting on the publication of the annual safety statistics, Iain Grainger, CEO, IMCA, said: “We are pleased with the increase in hours recorded in our safety data this year to more than 950 million, demonstrating the unwavering commitment of our members to improving safety and performance.
“The figures themselves continue trends seen in the last few years, showing small improvements across the major metrics collected from incidents at contractor members. However, they also reveal broader questions for IMCA and the industry – What should we now collectively explore if we wish to see a step change in offshore safety? How can we reduce avoidable serious incidents and offshore deaths? What lessons should we be learning from each other?”
“With this in mind, IMCA will be working closely with G+ over the coming months to reduce incidents. We will also be exploring emerging safety approaches at the IMCA Global Summit in December, where we will have a focus on the potential of Human and Operational Performance (HOP) to improve safety.”
“For more than 50 years, safety has been fundamental to IMCA’s mission, and we have witnessed a dramatic decline in offshore incidents. The industry needs to come together and find the new approaches which will build on this good work as we strive towards a world where working offshore is as safe as possible.”
IMCA has also produced an Information Note on Human and Operational Performance (HOP).
HOP was born out of the safety science community and took a fresh approach to how the worker is viewed. In essence, HOP is about learning and understanding how humans and organisations interact to accomplish work. HOP is a ‘philosophy’ which allows organisations to build error-tolerant systems. HOP accepts that it is not realistic to expect perfection from workers or processes.
Commenting on the Information Note’s publication, Nick Hough, Consultant – Safety, IMCA said: “We’re delighted to be able to support our members to understand this emerging safety philosophy and share some examples of successful adoption.”
“An unrelenting commitment to safety means exploring new ideas and concepts, which is why I’m also looking forward to the discussion of its potential at the IMCA Global Summit later this year, where we’ll hear first hand from members who have made steps to implement the approach.”
Members can login or register with their work email address to access the Information Note now.
14. Fuel projects at risk
Two-thirds of European green shipping fuel projects are at risk, a new Transport & Environment (T&E) study shows. T&E’s mapping of green hydrogen projects across Europe shows that nearly 4% of European shipping could run on green e-fuels by 2030. But fuel suppliers appear to be reluctant to commit financially to projects without more guarantees that there will be demand for these fuels in the near future. This means the vast majority of projects may never come online in this decade, putting Europe’s climate ambitions and thousands of jobs at risk, warns T&E.
Inesa Ulichina, shipping officer at T&E, said: “Hydrogen projects are popping up across Europe. They have the potential to power hard-to-decarbonise sectors like shipping and provide thousands of good jobs. But at the moment there just isn’t enough certainty and we risk missing this golden opportunity.”
There are at least 17 projects across Europe, set up to provide hydrogen-based e-fuels for ships. If all of these projects become operational, they could meet nearly 4% of EU shipping’s total energy demand by 2030. T&E found 44 other hydrogen projects in Europe that could also provide green fuels for ships, but project developers eye other hydrogen-hungry industries, too.
The mapped projects would easily meet the European Union’s target of 2% green e-fuels in 2034, however, most projects are yet to receive funding and not a single shipping-dedicated project is operational.
Denmark alone accounts for more than half of all the planned hydrogen volumes across the 61 projects mapped by T&E. But in terms of fuels earmarked for shipping, Spain leads the way and is home to a third of the potential fuel supplies. Despite its large coastline, the UK has very few projects while T&E found none in Italy and Greece.
In the long run, e-ammonia appears to be the more popular option, making up 77% of potential volumes. To date, however, none of these projects has received a final investment decision.
Inesa Ulichina concluded: “Shipping has a chicken and egg problem. E-fuels producers are waiting for clearer demand signals from ship operators before making large investments. Shipping operators, on the other hand, are waiting for these fuels to scale up and become cheaper before signing off-take agreements. The EU should ensure more supply and demand of e-fuels through regulation, which will provide fuel producers and shipping companies with investment certainty.”
T&E recommends that member states mandate at least 1.2% of shipping fuels to be e-fuels by 2030, as recommended by the EU’s green fuels law (RED III). This would secure all the current projects that have already received funding and allow more projects to reach the final investment decision. Revenues from the EU’s carbon market for shipping (ETS) should also be used to help nascent projects, says T&E.
15. Green transition
On 20 May, the revised EU Directive on the protection of the environment through criminal law entered into force. The purpose of the revision was to contribute to more efficient protection of the environment, as the previous EU directive was thought to not be dissuasive enough.
Directive 2008/99/EC was adopted by the European Parliament and the Council and in 2008. It outlined the general purpose of protecting the environment and decreasing the environmental crime levels in the EU.
In 2020, an evaluation carried out by the Commission noted that “there are major deficiencies in all member states and at all levels of the law enforcement chain preventing criminal environmental law from being effective”.
The new and revised Directive aims to establish a framework that is similar in all EU member states and is designed to increase the effectiveness of investigation and prosecution of environmental crime across the EU.
The scope of the Directive is now also much wider, with the number of criminal categories increasing from 9 to 18. Of relevance to the shipping community, the offenses include:
- The ship-source discharge of polluting substances,
- Ship recycling that does not comply with EU regulations,
- The introduction and dissemination of invasive alien species on EU territory,
- The illegal shipment of waste.
Additionally, the directive calls on member states to criminalise the incitement, aiding or attempt to commit any of the crimes above. The directive also still includes corporate liability for specific pollutant behaviours.
Harmonising penalty levels across all member states is also part of the amended directive. It also seeks to establish minimum penalty levels, proportionate to the crime.
The maximum prison sentence is up to 10 years for offences which may have caused or are likely to cause death or serious injury. For legal persons, the minimum penalty should be no less than 3% of the total worldwide turnover of the corporation in the business year preceding the fining decision.
The revision also introduces certain ancillary penalties and measures for both natural and legal persons including obligation to rehabilitate polluted or damaged areas.
Since the new Directive entered into force on 20 May 2024, member states now have two years to take the necessary actions to incorporate the directive into their national laws.
Each state must present annual statistics that include the number of environmental crime cases reported as well as the respective national strategies for combating environmental offences.
16. Intercargo agenda
INTERCARGO, the International Association of Dry Cargo Shipowners, met in Tokyo recently and high on the agenda were quality, sustainability, GHG emissions’ reduction, and particularly the CII rating system.
The location of Tokyo was chosen specifically to highlight the importance of Japan to the dry bulk sector. Japanese economic growth has contributed hugely to trade in dry bulk, a sector that has supported one of the world’s largest network of shipbuilders, with many shipyards across Japan including the world’s leading ship builders and designers of dry bulk vessels. Japanese ship owners have been prominent players in supplying the world’s economy with dry bulk products such as iron ore, coal, raw materials and grain.
Numerous members and guests from both Japan and abroad attended the Association’s functions. INTERCARGO’s Executive Committee and Technical Committee discussions focused on issues affecting the dry bulk sector. INTERCARGO’s members represent about one-third of the global dry bulk fleet tonnage. While they are supportive of the IMO’s decarbonisation aims, they expressed serious concerns that the CII, in its current form, will unfairly penalise the sector.
Dimitrios Fafalios, Chairman of INTERCARGO said: “The issue of the CII again featured heavily in discussions with members at our meetings in Tokyo. INTERCARGO’s members feel very strongly that the CII, in its current format, needs a fundamental reconsideration to account for the operating conditions in our sector.”
Fafalios added: “While we are, of course, supportive of the IMO’s environmental aims, they must be enforced in a fair and equitable manner across the maritime spectrum. They also need to be applied in way that is not potentially damaging to the shipping industry, as well as to avoid the wider adverse effects on economies and on end consumers.”
Also prominent on the agenda of INTERCARGO in Tokyo were discussions on:
Safety & quality operations;
INTERCARGO’s messaging via ESG;
Recommendations on Port State Controls; and
Macro-economic impacts on the dry bulk shipping, such as conflicts leading to re-routing of vessels and increased insurance costs.
The next calendar dates for INTERCARGO’s members are the organisation’s Annual General Meeting, Executive Committee and Technical Committee meetings in London on 24-25 October 2024.
17. Disaster risk management
The Insurance Development Forum (IDF) and the French Development Agency Group (Agence Française de Développement and Expertise France (AFD Group) have announced the formation of the Integrated Disaster Risk Management Alliance (IDRIMA).
Signed at the IDF Summit 2024, this strategic partnership aims to strengthen the long-term resilience of sovereign, sub-sovereigns and public utilities in the Global South to the impacts of climate disasters through comprehensive financial solutions, combining the expertise of Development Finance Institutions (DFIs), Public Development Banks (PDBs), and insurers.
Michel Liès, Chair of the IDF Steering Committee and Chair of Zurich Insurance, said: “The IDF and its members are at the forefront of recognising the essential role of insurance in enhancing resilience and adaptation. This alliance with the AFD Group is a significant step forward in our mission to integrate disaster risk management with climate adaptation strategies. By embedding risk management measures and actions into financial solutions from the outset, we can offer better protection measures to sovereigns in addition to ensuring critical infrastructure in the Global South is resilient to disasters over the long-term. This partnership will also help protect essential services such as water and energy, ultimately enhancing the stability and sustainability of communities vulnerable to disaster impacts.”
Christine Poursat, head of AFD Financial Systems said: “Tackling the impacts of climate change requires an unprecedented effort across all sectors of society. The IDF and AFD Group’s joint commitment aims to accelerate the identification and adoption of comprehensive financial solutions to better protect against climate disaster risks. The alliance will leverage on the private insurance industry’s expertise and work closely with PDBs to develop robust solutions for vulnerable countries, enhancing resilience and adaptation to climate change.”
The annual COP negotiations have highlighted the critical need for climate resilience, adaptation, and loss and damage considerations within climate finance. Key financial stakeholders, public and private, are joining forces and expertise to deepen their cooperation.
The IDRIMA Operational initiatives will initially focus on three key areas to provide critical support and expertise and embed issues of risk management, risk financing and insurance into the development of comprehensive financial solutions for sovereign, sub sovereign, public development banks and public utilities which are engaging with the AFD Group:
Policy Dialogue: better integrating insurers’ expertise into policy dialogues, offering insights on disaster risk reduction measures.
Default Protection Cover: investigate ways to design and offer protection against sovereign and sub-sovereign defaults in the event of major climate events.
Public Asset Financing and Protection: test utilities’ appetite for portfolio-level protection for priority assets against climate risks and financing premiums for protection implementation.
In parallel with the IDRIMA operational initiative, the partnership also involves advocacy and engagement initiatives aimed at increasing the level of collaboration between the public, private and development sectors. The advocacy and engagement initiatives will in particular help share and disseminate this expertise among local and regional public banks.
Notices & Miscellany
Commenting on the Awareness Challenge story in the previous issue Manjit Handa says.
“While the problem has been somewhat identified, is the best solution another electronic device? Whichever way you put it, most of the watchkeeping woes can be eliminated by adding one more Junior Navigational Watch Keeping Officer.
That reform proposal has met with an obstinate refusal from owners/managers, despite the mounting evidence that the traditional manning of Master plus three is deficient in providing adequate watchkeeping capability in high-density shipping channels as also during pilotage and for cargo watches in port.”
Expert forum
The Institute of International Shipping and Trade Law has organised an expert international forum for the analysis of contemporary and comparative aspects of commercial insurance law.
The Colloquium will be held at Swansea University and will convene a forum of professional and academic experts on 11-12 September 2024
For commercial organisations certainty and stability are key. Unexpected events and changes in economic and geopolitical conditions often threaten to destabilise such organisations; one of the most effective risk mitigation tools they have at their disposal is insurance.
This Colloquium will look in depth at both contemporary developments in various aspects of commercial insurance law, and also at their relationship with market practice and emerging trends. We also propose to comment on more doctrinal aspects of commercial insurance law in the light of recent judicial developments.
As ever, the Colloquium convenes a forum of expert speakers, chairpersons and delegates, with the object of subjecting the law to informed debate and critical analysis.
The programme will include the following:
1. AI and Insurance Intermediaries
2. Insurtech – Capable of Delivering all of its Promises?
3. Evolution of D & O Cover
4. Cyber Risk Insurance and IT Providers’ Liability
5. Direct Action Against P & I Clubs
6. Insuring War and Political Risks
7. What is Special About SME Insurance?
8. Construction of Promissory Warranties in Commercial Insurance Contracts
9. Marine Insurance at the US Supreme Court – A View from the Other Side of the Atlantic
10. Fair Presentation of Risk: Evolving in the Right Manner?
11. Conceptualising Fraud in Insurance Law
12. Anti-Assignment Clauses
13. Rethinking Subrogation
14. When Does an Insurance Payout Discharge a Wrongdoer’s Liability to the Assured?
The programme will occupy six sessions over two days. Thereafter the session topic(s) are made open to debate. Delegates will be provided with a colloquium delegate pack containing speaker papers.
Early bird registration is possible until 19 June: (please visit)
https://www.eventbrite.co.uk/e/international-colloquium-on-commercial-insurance-law-tickets-885462922437
Onboard carbon capture
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Please notify the Editor of your appointments, promotions, new office openings and other important happenings: contactus@themaritimeadvocate.com
And finally,
(With thanks to Paul Dixon)
More Mistakes From New English Language Students
“In some countries, you should only drink the water that a tourist already drank. Maybe it will taste bad, but it will not have poison.”
“My father is a highly rank government official.”
“This morning, I was walking outside, when suddenly a big shower fell on me!”
“We won two gold medals, one silver, and four blonds!”
“Please execute me for being late.”
“I never liked mushrooms, but now they are starting to grow in me.”
“Such behaviour will result in immediately being exploded from the university.”
“The groom was wearing a very nice croissant.”
“My landlord gave me a one year contraction. It will be over soon.”
“I can usually know when he is lying because he starts to breed a little faster.”
“I don’t know if he will propose, but I am expecting.”
“Last night, when I ate dinner, I started joking. My friend hit my back very hard until I stopped. I was so lucky he was there!”
Thanks for Reading the Maritime Advocate online
Maritime Advocate Online is a fortnightly digest of news and views on the maritime industries, with particular reference to legal issues and dispute resolution. It is published to over 20,000 individual subscribers each week and republished within firms and organisations all over the maritime world. It is the largest publication of its kind. We estimate it goes to around 60,000 readers in over 120 countries.
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