New Delhi is adding further support to India's shipyards. The nation's shipyards and ship recyclers have been granted infrastructure status under the government's Made in India scheme, which will make their financial moves easier.
Yards will now be able to access long-term loans of up to 25 years. The move follows on from a large shipbuilding subsidy programme announced by the government last month.
BIMCO, together with other leading shipping organizations, has launched a set of guidelines to help the global shipping industry prevent major safety, environmental and commercial issues that could result from a cyber incident onboard a ship.
The cyber guidelines launched are a first for the shipping industry, developed by international shipping associations, comprising BIMCO, CLIA, ICS, INTERCARGO and INTERTANKO – and with support from a wide range of stakeholders. The Guidelines on Cyber Security Onboard Ships are free to download from the BIMCO website.
Angus Frew, Secretary General of BIMCO, said, "BIMCO has led the way to identify potential cyber vulnerabilities for ships – and their implications – based on the latest expert research."
"The aim is to provide the shipping industry with clear and comprehensive information on cyber security risks to ships enabling shipowners to take measures to protect against attacks and to deal with the eventuality of cyber incidents."
The European Commission has sent a set of proposals to Greece asking it to change its maritime tonnage tax to exclude all maritime sector intermediaries and operators of ships, which do not provide maritime transport services.
The commission said that the Greek tonnage tax system is not well targeted and that the current provisions may breach EU state aid rules by allowing shareholders of shipping companies to benefit from favourable tax treatment that should be reserved for maritime transport providers.
Greece now has two months to inform the commission whether it agrees to the measures proposed and to review which vessels are eligible under its system, therefore excluding fishing vessels, port tugboats, and yachts rented out to tourists without a crew from the preferential regime. Preferential tax treatment should also be removed for insurance intermediaries, maritime brokers and other maritime intermediaries as well as the shareholders of shipping companies.
The proposals do not concern the core of the Greek shipping economy, notably the operation of bulk carrier and tanker vessels.
If the country agrees to the proposed amendments, it would need to change its national rules with effect from Jan. 1, 2019 at the latest.
Based on the Greek system currently in place, the shipping companies are enjoying lucrative tax breaks which allow them to pay a voluntary amount, all with the aim of keeping owners in Greece. These include no taxes on profits from shipping operations, and no taxes on ship sales.
China's Ministry of Industry and Information Technology (MIIT) has unveiled the third batch of its white list for the shipbuilding industry, adding eleven new yards to the 60 already listed
In detail, the 11 shipyards are as follows: Jiangsu Yangzi Xinfu Shipbuilding, Jiangsu New Hantong Ship Heavy Industry, Nantong Rainbow Offshore & Engineering, Jiangsu Haitong Offshore Engineering, Wuhu Xinlian Shipbuilding, Fujian Baima Shipyard, Fujian Southeast Shipyard, Fujian Huadong Shipyard, Ezhou Guangda Shipbuilding, Jiangmen Nanyang Ship Engineering, and Chongqing Donggang Shipbuilding Industry.
The central government is hoping that the white list can optimize shipbuilding capacity and promote mergers and acquisitions in the industry, with shipyards on the list enjoying favourable policies from the government and banks.
From 2016 onwards newbuild ships sailing in certain Emission Control Areas will be required to meet 'Tier III' NOx emission standards. These new limits are much stricter than the 'Tier II' levels and require investment in dedicated NOx reduction measures. Equipment manufacturers have invested significantly to develop NOx Tier III solutions and which option owners will favour is a key question.
The IMO's limits on ships' NOx emissions have been introduced in three stages with 'Tier III' levels around 70% below 'Tier II' limits, necessitating dedicated NOx reduction technology or the use of 'clean' fuels such as LNG. Tier III standards will apply to marine diesel engines installed on ships 'constructed' on or after Jan. 1, 2016 when sailing in existing NOx Emission Control Areas (NECAs). The North American and US Caribbean Sea are currently the only NECAs and while there are calls for stricter NOx limits in other areas such as the Baltic, it is unlikely that compliance requirements will be applied retrospectively.
With the NOx deadline looming there have been numerous reports this year of owners looking to place orders to secure a keel laying prior to Jan. 1, 2016. This avoids the hefty premium associated with Tier III compliance - an SCR solution reportedly costs around US$1.5m for an MR tanker and up to $4m for a VLCC.
The main solutions for Tier III limits are technologies including Selective Catalytic Reduction (SCR) systems and relatively newer Exhaust Gas Recirculation (EGR) systems, or LNG fuel. According to the Clarksons Research database, there are currently a reported 306 ships with NOx technology fitted in the fleet (95% of which are SCR systems) and 79 vessels that can run on LNG fuel. Increasingly, LNG capability is the norm for LNG carriers and they have been excluded from this analysis in order to get a clearer view of which solutions have been adopted as NOx reduction measures. The number of vessels in the fleet that can meet NOx Tier III standards has grown from a reported 74 ships at the start of 2005 to 385 vessels at the start of this month but remains a very small proportion of the world fleet (0.4%). Norway's NOx tax and fund introduced in 2007 and 2008 respectively, have driven much of the investment in NOx reduction measures and 63% of the NOx compliant fleet is reported to be Norwegian owned.
Meanwhile, there are a reported 91 NOx Tier III compliant ships on order - 81% of which are LNG capable. This is a slightly higher proportion of the global orderbook, 2%, compared to the fleet. Ordering has also been less consolidated and Norwegian, US and Swedish owners account for 21%, 16% and 13% of the orderbook in numerical terms respectively.
NOx Much Clarity Yet
With the Tier III requirements yet to come into force, owners have so far been able to work around the requirements. Currently, the majority of vessels that could meet Tier III standards are Norwegian owned and SCR equipped though the orderbook is more weighted towards the LNG fuel solution. However, ordering in 2016 should bring greater visibility as to the favoured options for compliance.
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.