While the city of Beijing braces itself for "red alert"-level air pollution, shuttering industry and rationing driving, the Chinese Ministry of Transport has unveiled detailed guidance for a set of emissions control areas at major Chinese ports.
The Implementation Plan for Emissions Control Zones (ECZs, as the ministry calls the areas) will require the use of low-sulfur fuels at eleven major Chinese ports.
Beginning Jan. 1, 2017, ships calling at these ports will be required to use fuel with sulfur content of not more than 0.5% while at berth.
In 2018, this will extend to all ports in the Pearl River Delta, the Yangtze River Delta, and Bohai Bay, which together handle about 20% of the world's container traffic.
In 2019 ships entering the ECZs near these port regions will be required to meet the low-sulfur fuel standard while under way.
This mandate is the first of its kind outside of the EU and the United States. Its specifications for fuel still allow five times the sulfur permitted under the IMO's Tier IV standard for formal ECAs, and they do not begin right away – but they will have the effect of implementing global regulations one year ahead of schedule. The IMO's Tier IV worldwide standard of 0.5% maximum fuel sulfur content – the same as China's ECZ requirement in 2019 – will take effect in 2020.
The plan does not address NOx or particulate matter emissions, beyond encouraging Chinese authorities to implement existing domestic and international requirements.
The Ministry of Transport has recently acquired the authority to address port pollution under China's Air Pollution Prevention and Control Law, and observers say that the plan's release suggests that it is serious about implementation. Environmental quality has become a source of social unrest in China, and the ruling Communist Party places a high value on stability.
The plan requires a further review in 2019, and future steps could include adoption of a 0.1% sulfur content standard in the ECZs (as in European and American ECAs) and enlarged coverage of China's seaboard.
The Indian government has announced a number of indirect tax incentives for the country's shipbuilding industry in an attempt to boost the country's vessels program.
These incentives, dated Nov. 24, include exemption from customs and central excise duties on all raw material and parts for use in the manufacture of ships, vessels, tugs and pusher craft.
China has ratified the Maritime Labor Convention (MLC), becoming the 68th International Labor Organization member state to do so.
As the fourth pillar of the international maritime legal regime, complementing the key conventions of the IMO, the Maritime Labor Convention (MLC) has placed decent working and living conditions of seafarers and fair competition for shipowners at the forefront of maritime affairs.
With over 250,000 seafarers and a merchant fleet of 44,474,904 gross tons, China plays a significant role in the maritime industry, and its ratification is expected to have a strong impact on the working and living conditions of the world's seafarers.
In transmitting the instrument of ratification, Ambassador Wu Hailong, Permanent Representative of the People's Republic of China to the United Nations, stated, "It is a great honor to present the instrument of ratification of the Maritime Labor Convention, 2006. I am confident that China will not only fulfil the obligations to effectively implement the convention, but will also drive global efforts to promote compliance with the convention throughout the world."
The Chinese government has issued a list of companies involved in offshore shipbuilding that made it to the so called "White List", according to local media.
The companies that make it to the list have a better chance of receiving financial loans from Chinese banks.
In the first batch, the country's Ministry of Industry and Information Technology (MIIT) selected seven shipyards, all state-owned, those being: CIMC Raffles, China Merchants Heavy Industry, Cosco Qidong Shipyard, Shanghai Waigaoqiao Shipbuilding, Shanghai Zhenhua Heavy Industries Company, Dalian Shipbuilding Industry Offshore, and Cosco Nantong Shipyard.
The announcement follows a period of revision of the shipbuilders' applications that was launched this July.
Previously, the Chinese government said that the list would aim at consolidation of offshore businesses, along with encouraging of technological progress and innovation.
The list is similar to that of China's "White List" of conventional shipyards that were made eligible for restructuring within China's reform of the sector aimed at boosting competitiveness by cutting overcapacity.
The "White List" was announced in 2014 by China's government, as an additional incentive for shipyards which comply with the country's requirements in areas such as ship emissions, offering the rule-abiding shipyards benefits such as tax rebates and bank credits.
Indonesia's Transportation Ministry has introduced a freight subsidy programme for vessels carrying cargo to remote areas in the archipelagic country that are not already served by privately owned ships.
The scheme is part of president Joko Widodo's maritime highway initiative, which aims to forge better logistical connections within Indonesia, particularly to and from remote islands.
The government has allocated IDR27bn (US$1.98m) for the public service obligation (PSO) subsidy programme, which will help fund the operation of three ships until December, the Jakarta Post reports.
State-owned shipping company PT Pelayaran Nasional Indonesia (Pelni) will operate the three 115teu cargo ships on a fixed schedule, calling at destinations including Timika and Serui in Papua, Tual in Maluku and Natuna in Riau.
The vessels will carry cargo such as rice, sugar, flour, cooking oil, eggs, steel and cement. Two will depart from Tanjung Priok in Jakarta, and the third will sail from Tanjung Perak, Surabaya.
"Based on our study, the high prices in the remote areas are usually caused by uncertainty surrounding shipping schedules and sea conditions. The cargo ships can hopefully help to reduce the disparity between the eastern and western part [of the country]," said Indonesia's transportation minister Ignasius Jonan.
The minister added that this is just the first phase of the scheme, and it is hoped that more ships would be added to the service in December or January.
Next year, the ministry has reportedly allocated IDR257.9tr (US$19m) for the PSO scheme to help Pelni operate six routes.
International shipping and aviation emissions have been reinserted into the draft Paris agreement during the five-day climate talks held in Bonn, Germany, last week.
However, the draft's language needs to be considerably strengthened if it is to help curb the two sectors' climate impact, according to sustainable transport group Transport & Environment.
The shipping and aviation sectors were initially exempted from targeted CO2 emissions cuts in the December Paris climate agreement, as the text issued by the Paris talks' co-chairs on Oct. 5 showed, T&E said.
At the end of the last week's talks before negotiations in Paris, the proposals from all countries were compiled in a 55-page document. This will be the draft text that will form the basis of the negotiations in Paris from Nov. 30 to Dec. 11.
"International aviation and shipping emissions are the elephants in the room for the UNFCCC," said Bill Hemmings, clean shipping and aviation manager at T&E.
"The Paris Agreement must send a clear signal – not a passing reference – to the UN bodies regulating these emissions, ICAO and IMO, that time is up and action is now due. The 2 degree global warming limit becomes next to impossible if Paris gives these sectors a free pass. The latest text is the result of developed and developing countries cooperating on this issue for the first time. There is real hope now that Paris will close these gaping loopholes.”
China's National Development and Reform Commission (NDRC) has announced that it has received letters from a number of major shipping lines, including K Line, Hanjin Shipping, Hyundai Merchant Marine, Evergreen, Wan Hai Lines, Yang Ming Lines and CSCL that they have taken measures to cut several shipping surcharges.
The shipping lines will cancel surcharges including document fee, port fee, telegraph cancellation fee and bill of lading custody fee, and simply many charging items through combinations.
In September, seven Chinese state departments released a public notice to further eliminate excessive shipping charges under a call from the State Council. The departments started investigations into liners, ports and logistics firms for unreasonable charges.
The U.S. House of Representatives has recently approved the bill to lift the 40-year-old ban on crude exports, but the legislation faces an uphill battle in the Senate after President Barack Obama threatened to veto any measure that ends the ban.
The measure passed by a vote of 261 – 159, the House Energy and Commerce Committee said in a statement, adding that "studies have shown that lifting the antiquated ban on crude oil exports would lower prices at the pump, support job growth, and strengthen America's national security and geopolitical influence across the globe."
American Petroleum Institute (API) has welcomed the passing of this bipartisan legislation.
"American producers would be able to compete on a level playing field with countries like Iran and Russia, providing security to our allies and accelerating the energy revolution that has revitalized our economy." said API President and CEO Jack Gerard.
However, those against the bill claim that lifting of the ban will only benefit large oil companies.
"This bill is an unconscionable giveaway to Big Oil at the expense of American consumers," said Florida Democrat Kathy Castor.
The recently signed Trans-Pacific Partnership (TTP) deal is the latest and biggest of the growing number of free trade agreements (FTAs) that promise heightened container growth for participating countries, according to U.K.-based shipping consultant Drewry.
There is still much to be done before TPP becomes active, especially as Hillary Clinton, the front-running U.S. presidential candidate for the Democratic Party, has voiced her opposition, while negotiators are still working on the final technical details that are expected to be released before the year is out.
However, Drewry says there is evidence that supports the argument that free trade deals do encourage heightened trade growth, specifically in the container shipping arena.
One of the most significant FTAs in recent years was the pact between the 10 member states of the Association of Southeast Asian Nations (ASEAN) with China in 2005, Drewry says. In the 10 years before the deal, the annual growth rate for China's merchandise exports to ASEAN was broadly in line with the rest of the world at 17%. Following the deal, the 10-year CAGR rose to 19% at the time when the annual rate to the rest of the world had slumped to 13%.
ASEAN really started to accelerate beyond the overall trend from 2009 onwards, which suggests it takes a few years after implementation for the trade benefits to really kick-in, according to Drewry.
Similar to the China-ASEAN pact, U.S. trade growth with its FTA partners seems to be gaining momentum as exports and imports to FTA partners are now increasing at a faster pace. Between 2009 and 2014, U.S. exports to FTA countries have grown by 64%, versus 45% for all non-FTAs, while imports from FTAs have expanded by 57% against 47%.
With regards to the containerized trade, the GATT and WTO trade deals and the entry of China into the WTO are widely credited as having accelerated international trade in general and ocean-borne trade in particular, and the available data does again suggest that FTA partners benefit from increased trade at the expense of other economies.
The liberalization of trade is a growing trend and one that will benefit container shipping companies in the long run. Drewry says that in the mid-term, investment in shipping and port infrastructure within countries that have expanded their FTA scope is probably prudent.
Houston-based American Bureau of Shipping (ABS) has released the world's first guide for SOx scrubber ready vessels to support members and clients in preparing newbuilds for future outfitting with a SOx exhaust gas cleaning system (EGCS).
The ABS Guide for SOx Scrubber Ready Vessels formalizes the process for clients who wish to plan for retrofit of a SOx scrubber at a future date by providing a detailed review and approval and an associated notation.
The SOx Scrubber Ready notation is in addition to ABS EGCS notations that may be assigned for vessels fitted with an exhaust emission abatement system, including SOx scrubbers, selective catalytic reduction systems and exhaust gas recirculation arrangements for NOx emission control, in accordance with the ABS Guide for Exhaust Emission Abatement.
"The decision to build a new ship or retrofit an existing one is not simple due to uncertainty with the entry into force of the 0.5% global sulfur limit and cleaner fuel alternatives such as LNG," said ABS Chief Technology Officer and Senior Vice President Howard Fireman.
"The new ABS SOx Scrubber Ready notation provides a unique approach to future-proof assets, to implement cost-effective retrofits and to demonstrate a commitment to environmental performance."
In addition to the new ABS Guide for SOx Scrubber Ready Vessels and Guide for Exhaust Emission Abatement, ABS has published the ABS Advisory on Exhaust Gas Scrubber Systems.