Han Jialin

Assistant Professor, Dalian Maritime University, China

Visiting at: University of Lapland
Period: 1 month
Research Theme: Cooperation among No-state Actors in Dealing with the Carriage and Use of Heavy Fuel by Vessels in the Arctic

Han Jialin received CNARC scholarship 2017 and was granted the opportunity to conduct a one-month fellowship at the University of Lapland, Rovaniemi, Finland.

Research on Measures of Tackling HFO Used and Carried on Board Ships after the Entry into Force of Polar Code

Abstract

This paper discusses the environmental damages brought by the use and carriage of HFO as fuels by ships in Arctic waters and reviews efforts made by major international and regional organizations in governing the use and carriage of HFO as fuels by ships in Arctic waters after the entry into force of the Polar Code. Illustrating the demonstrated features of the Arctic Council and the International Maritime Organization in the governance of Arctic waters, it puts forward measures taken by these two organizations in tackling HFO issue, namely, seeking alternative to HFO, developing measures to reduce risks on board ships, collecting the data of HFO use, amending and revising relevant international instruments as well as making joint efforts among different organizations in an attempt to provide suggestions for the follow-up discussions on tackling the HFO issue, optimize the governance of relevant organizations and figure out a better global solution to the governance of the use and carriage of heavy fuel oil by ships.

Keywords: Heavy Fuel Oil (HFO); Arctic Council; International Maritime Organization (IMO); governance measures

1. Introduction

The International Code for Ships Operating in Polar Waters (hereinafter referred to as "the Polar Code") was adopted by the International Maritime Organization (IMO) in 2014 and entered into force on January 1, 2017. While the Polar Code covers all respects of ships operating in Polar waters such as the design, construction, equipment, operation of ships, search and rescue and environment protection of ships, which is of far-reaching significance for the maintenance of maritime management in order in Polar Regions, it is still far from being perfect and does not address the issue of the use and carriage of heavy fuel oil (HFO) by ships. As black carbon emissions from burning heavy fuel oil (HFO) and oil spill from accidents can severely affect the Arctic environment, reducing the risk to the Arctic environment by banning the use and carriage of heavy fuel oil (HFO) has become an important aspect of Arctic environmental governance. IMO and the Arctic Council play an important role in governing the use and carriage of heavy fuel oil (HFO) in Arctic shipping. Both the IMO Marine Environment Protection Committee^{[1] [2]} and the Protection of the Arctic Marine Environment (PAME)^[3] have discussed the issue of use or carriage of heavy fuel oil (HFO) by ships in Arctic waters.

As two non-state actors of varying nature, the governance effectiveness of the Arctic Council and IMO can vary. Therefore, the governing advantages of the two organizations can be combined to explore a more effective solution to the use and carriage of heavy fuel oil (HFO) by ships operating in Arctic waters, thus finally achieving the aim of protecting the Arctic marine environment.

2．Risks of Use and Carriage of Heavy Fuel Oil as Fuel by Ships in Arctic Waters

Heavy Oil refers to Heavy Fuel Oil (HFO), a fuel used throughout the shipping industry, is a viscous and tar-like residue of the crude oil refining process that breaks down extremely slowly in cold waters, and is close to impossible to clean up in the event of a spill. HFO is also the source of harmful black carbon which contributes to the warming of the Arctic region.

According to International Council on Clean Transportation (ICCT), HFO is the most commonly used marine fuel in the Arctic, representing 57% of fuel use and more than 75% of the volume of bunker fuel carried on board ships in the Arctic in 2015^[4];

The risks of use or carriage of heavy fuel oil by ships in Arctic waters are mainly manifested in two aspects: first, the environmental damage caused by oil spill accidents; and second, emissions from burning heavy fuel oil (HFO). As Arctic Region is a special geographic location which is remote, arctic-alpine and high-latitude, the ecological environment itself is very fragile. Additionally, the emergency mechanism is incomplete and the environmental rehabilitation capability is poor in Arctic waters. Taking into account the aforementioned factors, environmental damages caused by heavy fuel oil are disastrous.

First of all, once a ship using or carrying heavy fuel oil suffers from oil spill accidents in Arctic waters, marine life and marine resources will be subsequently endangered, which will exert negative effects on the ecology and economy of the Arctic. Meanwhile, a research report has been submitted to the European Climate Foundation (ECF) by some researchers in which ecological, economic and social losses caused by oil spill accidents in Arctic waters have been examined. Parameter Characterization Method has proved that the clean-up costs of oil spill accidents in the Arctic are much higher than those in other non-remote and non-polar regions^[5].

Secondly, the use of heavy fuel oil by ships will emit a large amount of nitrogen oxides, sulfur oxides and black carbon, which will cause severe damage to local environment and ecology. In particular, the subsidence of black carbon on the surface of Arctic ice will reduce the reflection of snow and ice, leading to the extensive melting of ice and snow due to heat absorption. The aforementioned factors exerted adverse impacts on the Arctic climate and even the local lifestyle and physical health.

As the Arctic route is increasingly recognized as an economical route, traffic volume in this area will continue to increase in the future, so will the carriage capacity and use of heavy fuel oil. Accordingly, the probability of oil spill accidents and air pollution incidents will also increase significantly. Therefore, starting with the existing measures promulgated by international and regional organizations that get involved in Arctic shipping affairs, we should explore a comprehensive solution to the problem and create an inter-organizational synergy that can effectively reduce the environmental risks caused by the use and carriage of heavy fuel oil by ships within the shipping industry in Arctic waters.

3. Efforts Made by International Maritime Organization and Related Agencies of the Arctic Council in the Governance of Heavy Fuel Oil in the Arctic

With regard to the governance of heavy fuel oil within the shipping industry in the Arctic, there is a need to take into account the interests of stakeholders both representing the coastal states ,user states and major international shipping nations. This paper will select the existing measures adopted by the Arctic Council, which mainly speaks for the coastal states, as well as the existing measures published by International Maritime Organization that stands for the Arctic coastal states, the user states of the Arctic shipping route and the major international shipping nations as the focus to enable a comprehensive and effective solution to tackle the HFO issue.

3.1 Efforts Made by the Arctic Council Working Group on the Protection of the Arctic Marine Environment (PAME)

Since 2009, the Arctic Council Working Group on the Protection of the Arctic Marine Environment (PAME) has begun assessing the potential risks of using heavy fuel oil, which proved that the most severe damage caused by ships to Arctic waters was due to accidents or illegal discharge^[6].In 2011, the working group on the Protection of the Arctic Marine Environment (PAME) released a report stating that using distillate oil to replace heavy fuel oil is an effective way to reduce environmental risks^[7]. In February 2016, the working group on the Protection of the Arctic Marine Environment (PAME) invited members of Arctic Council, permanent participants and observers to submit proposals for reducing risks caused by the use and carriage of heavy fuel oil by ships to the Arctic. In September 2017, the working group on the Protection of the Arctic Marine Environment (PAME) held a substantive discussion on the use and carriage of heavy fuel oil in the Arctic and launched several projects related to heavy fuel oil. At First, PAME required Member States to submit not only information on the number of ships that used heavy fuel oil as fuel, types of ships and routes, etc., within the past three years, but also the quality and grade of fuel oil. In addition, the provided information on the quantity of heavy fuel oil carried by ships and the port of destination, etc will lay a foundation for future discussion. Secondly, assessment of indigenous and local community’s reliance upon heavy fuel oil should be carried out. In order to figure out the extent to which indigenous people and local community rely on ships that burn HFO to deliver supplies and provisions, the United States and other stakeholders suggested collecting, reporting and reviewing the information about on-shore use by indigenous peoples and local communities of HFO. Finally, PAME decided to submit information of projects relevant to HFO use and carriage in the Arctic to IMO ^[3].

3.2 Efforts Made by IMO

As early as almost 10 years ago, a legal document prohibiting the use of heavy fuel oil in the Antarctic was adopted by the parties to the Antarctic Treaty. Subsequently, a resolution adopted by IMO in 2010 added the prohibition of the use of heavy fuel oil by ships in the Antarctic to the annex I to the International Convention for the Prevention of Pollution from Ships (MARPOL) (MEPC 189 (60)).

This document can serve as a reference for future discussion on the issue of prohibiting the use and carriage of heavy fuel oil by ships in Arctic waters. At the MEPC70, IMO held a discussion on the use of heavy fuel oil in the Arctic, where risks posed by the use of heavy fuel oil by ships in Arctic waters were highlighted by non-governmental organizations such as FOEI, WWF and CSC etc. These non-governmental organizations also hoped IMO to give more focus to the recent achievements made by stakeholders in mitigating the use of heavy fuel oil in the Arctic, and expected that IMO and the Arctic Council can strengthen cooperation on tackling the HFO issue in Arctic waters and step up information sharing.

Moreover, at the MEPC 70, IMO set cap on the sulfur limit of fuel oil at global scale, with sulfur content not exceeding 0.5% since 2020, which will significantly restrict the use of heavy fuel oil by ships in the Arctic^[8]. The recent IMO MEPC71 agreed to include “measures reducing risks caused by the use and carriage of heavy fuel oil by ships in Arctic waters” as a new output, which will be seen in the 2018-2019 biennial agenda and is scheduled to be completed in the following two sessions. Beside, IMO MEPC71 invited member states to submit specific suggestions on measures dealing with the aforementioned issue to adopt mandatory or recommended measures eventually ^[9].

4. Suggestions on Tackling the HFO Issue in Arctic Waters

With respect to the governance of the use and carriage of HFO by ships in the Arctic within the industry, efforts can be unfolded through the following five aspects: assessing indigenous and local community’s reliance upon HFO in the Arctic, developing risk prevention measures for ships operating in Arctic waters, seeking economical alternatives to HFO, adopting amendments to relevant international conventions to restrict the use and carriage of HFO by ships in the Arctic, and strengthening cooperation between relevant international and regional organizations in the governance of HFO.

(1) Assessment of Indigenous and Local Community’s Reliance upon HFO in the Arctic

It is the starting point for addressing HFO issue to assess the reliance of indigenous and local community upon HFO in the Arctic. Only when the extents to which indigenous people and local community rely on ships that burn HFO to deliver supplies and provisions are figured out, solutions to the problem can be sought objectively and soundly. Thus, the perception and traditional knowledge on use and carriage of HFO by ships of indigenous people in the Arctic is highly significant.

Examining the reliance of Arctic residents on HFO for household heating and cargo delivery can contribute to more ideas and approaches to tackle the HFO issue in Arctic waters from the perspective of local communities. Within the PAME framework, the role of Permanent Participants (PPs) should be emphasized, relevant projects should be conducted in line with the traditional cognition of the role played by Permanent Participants (PPs) in the local community and good communication with local residents should be maintained. With traditional and local knowledge (TLK), Permanent Participants (PPs) can better understand the specific needs of local residents for HFO and the methods of using other alternatives to replace HFO. The contribution and knowledge of Permanent Participants (PPs) can deliver a more practical policy.

Currently, the PAME conducted an assessment of the Arctic’s reliance on the HFO, with a view to obtaining relevant information from national maritime administrations, the shipping industry and indigenous peoples ^[10]. The results of the assessment can be briefed to IMO through Member States to the Arctic Council participating in the IMO meeting, thus providing more beneficial input to relevant decisions.

(2) Developing Risk Control Measures for Ships Operating in the Arctic

The operation of ships also has a profound impact on the safe use and carriage of HFO in the Arctic. Therefore, a range of options should be considered in developing measures to reduce the risk of use and carriage of HFO as fuel by ships in the Arctic: types and sizes of ships operating in Arctic waters; structural conditions of ships including existing fuel oil tank protection; the nature of voyage including ships resupplying remote communities, research, tourism, commercial transportation, mineral extraction, and other voyages; the duration of voyages; ships engaged exclusively in trade between ports or terminals of a State; ships routinely making voyages between specified ports or locations; the distinction between local or regional shipping and trans-Arctic shipping; the anticipated availability of bunker fuel; operating areas including lower risk voyages(e.g. the use of established routes, proximity of pollution response resources, quality and accuracy of navigational charts and aids to navigation, availability of ice information, marine communications, and traffic monitoring and control ),etc.

At the same time, risk control measures which aim to reduce the use and carriage of HFO by ships in Arctic waters should undergo corresponding evaluation on cost-effectiveness as well as take the potential increase of administrative burden and human factors into consideration.

It is recommended that the IMO should provide expertise on developing risk control measures aiming to reduce the use and carriage of HFO by ships in Arctic waters and fully consult the member states of the Arctic Council and permanent participants in an attempt to formulate measures that are in line with local conditions.

(3) Seeking Alternative to HFO with Economic Benefits

Tackling the issue of use and carriage of HFO in the shipping industry from the source requires the search of an economic alternative to HFO. Although this move will result in a 4% increase in fuel costs for ships operating in the Arctic ^[11], a large amount of costs used in cleaning up the pollution caused by HFO spill accidents will be saved. At present, a number of Arctic stakeholders and non-governmental organizations proposed that distillate oil or LNG can be used as the alternative to HFO^[12]. Distillate oil means to use desulfurized oil residual or the mixture of oil and residual to temporarily meet the requirements, whose cost pressure is relatively low. However, LNG proves to be the most effective and cost-effective alternative to reduce sulfur oxide emission.

In addition, the requirement of “the sulfur limit of fuel oil with sulfur content not exceeding 0.5% by 2020” imposed by IMO makes LNG the most ideal alternative to HFO, but the cost estimate made by ICCT for the aforementioned two alternatives demonstrates that use of LNG requires relatively high-quality supporting facilities and incurs high cost.

Therefore, it is suggested that a transition period be set before the full conversion to "high quality distillate oil or LNG" where distillate oil is used to temporarily meet the requirements, which can relieve the cost pressure shouldered by world merchant fleets. Meanwhile, supporting facilities for LNG should be actively constructed and HFO should be replaced by LNG gradually. At the same time, IMO should put forward relevant strategic goals and a specific roadmap to phase out the use of HFO within the shipping industry.

The member states of Arctic Council should also actively promote the use of the alternative to HFO as pioneer, collect data on the use of alternatives and publicize its environmental benefits within the shipping industry through the IMO platform, thus playing an exemplary role in using clean alternative for the global shipping industry.

(4) Amending and Revising Relevant International instruments to Restrain the Use and Carriage of HFO by Ships in the Arctic

To include requirements on restrictions and prohibitions on the use of HFO in the Arctic in the amendments of Annex to MARPOL Convention

Previously, Article 43 of Chapter 9 of MARPOL Annex I regulates that the use and carriage of HFO in Antarctic waters is prohibited(oil with a density higher than 900 kg/m³when at 15 ℃or with a kinematic viscosity higher than 180 mm²/s when at 50 ℃); Similarly, restrictions on the use or carriage of HFO in Arctic waters can be proposed in relevant sections of Annex I to mitigate the damage to the Arctic environment, which will contribute to the achievement of the goal of the Arctic Council, namely, gradually banning the use and carriage of HFO by ships in the Arctic by 2020.

PAME may encourage IMO to consider phasing out the use of HFO. At the initiative of the Arctic Council, member states of the Arctic Council plans to ensure that the initiative of “banning the use and carriage of HFO in the Arctic” finds its expression in the Polar Codes, and in the meantime, the Arctic Council will require observer states to focus on the initiative. By doing so, countries affected by the use and carriage of HFO will be able to take a stand on this issue and act accordingly, which is of great importance and representativeness as well as can stimulate the participation of relevant sovereign countries in the governance, thus solving the problem more effectively.

Member States of the Arctic Council can use regional port facilities delineated by PAME and take measures or voluntarily formulate guidance on ship's HFO inspections from the perspective of the port state. PAME can invite relevant non-governmental organizations to participate in meetings, obtain their professional research findings and in turn use these results to guide PAME's participation in relevant tasks of HFO governance; member states of the Arctic Council can submit the integrated results to the IMO Marine Environment Protection Committee; PAME can fund economic feasibility studies on environmental benefits and alternative to support implementation and phase out the use and carriage of HFO by ships in the Arctic.

Revising the Polar Code

In view of the current version of the Polar Code not setting requirements on the use or carriage of HFO in Arctic waters, Part II-A of Chapter I of the Polar Code can be revised to include regulations on prohibiting the use or carriage of HFO on board ships operating in Arctic waters. As the Polar Code is mandatory under the MARPOL Convention, the revision of the Polar Code will eventually have to amend the relevant regulations of the MARPOL Annex I.

PAME can draft relevant guidelines for phasing out the use and carriage of HFO in the Arctic, while IMO amend MARPOL Annex I.

Establishing Emission Control Area (ECA) in Arctic Waters

IMO is recommended to consider implementing Emission Control Area (ECA) in Arctic waters. Establishing ECA in Arctic waters will lay down more stringent rules on the emission of sulfur oxides, nitrogen oxides and particulates. At the same time, combining ECA with other measures such as Particularly Sensitive Sea Areas (PSSA) to address oil spills incidents and their ecological and biological impacts as well as their impacts on the food safety of local community/indigenous residents.

PAME can call on member states of the Arctic Council to conduct research and analysis on air emissions impacts from the shipping industry on local communities, wildlife and habitats in the Arctic, and then report to the IMO.

Designation of Ship Routeing System in the Arctic Water

It is recommended to establish routeing measures in Arctic waters and set up the areas to be avoided (ATBA) in ecologically sensitive sea areas to reduce the risks brought by the use and carriage of HFO by ships in Arctic waters.

Routes can be set up through the establishment of traffic separation scheme, recommended routes, or two-way routes, which can effectively avoid ship grounding and collision. These measures decrease incidents such as groundings and collisions with other vessels and are of great significance for reducing the potential hazards in high-risk areas in Arctic waters, such as in 53- miles wide Bering Strait.

Combined with considerable expertise on Arctic ecological and environmental issues, PAME can develop voyage planning criteria, including the “low impact corridors” to help seafarers in avoiding hazards and sensitive sea areas.

The Arctic Council and the IMO have common concerns in solving the Arctic environmental issues. Therefore, the influence of the member states of the Arctic Council, IMO's legislative development and its performance monitoring mechanism can be used to better improve the Arctic governance mechanism and give full play to the member states of the Arctic Council and non-member observer states, thus achieving effective communication in issuing relevant policies between the two organizations.

(5) Strengthening the Cooperation between Relevant International and Regional Organizations in the HFO Governance in shipping

The Arctic Council embodies the interests of the coastal states in the Arctic. Some coastal states formulated national laws on environmental protection in the Arctic according to Article 234 of the United Nations Convention on the Law of the Sea (1982). Therefore, the Arctic Council attaches great importance to the interests of the Arctic coastal states in the use and carriage of HFO, and the issued documents are simply regional solutions.

While focusing on the interest demands of relevant coastal states, the IMO platform also needs to take account of the interests of user states or major international shipping nations and unveil solutions on a global scale. Therefore, the specific solutions also involve the competition between the coastal states and the user states. For instance, certain oil and gas exporters do not tend to restrict the use and carriage of HFO by ships in the Arctic. In the first place, the use of HFO is indispensable for providing pilotage assistance in the ice-covered water and ice-breaking services, and countries engaged in seaborne trade are unwilling to see increasing operating costs due to the prohibition of HFO which ultimately weaken their competitiveness.

5. Conclusion

The future shipping industry will move towards “decarbonization” and the way out for future energy will develop towards the use of clean energy. Since the use and carriage of HFO by ships in the Arctic will exert influence on the fragile Arctic ecological environment, the Arctic Council and the International Maritime Organization have begun to take relevant measures to tackle this issue.

In the future, the governance of the use and carriage of HFO in the Arctic will be the focus of the Arctic environmental governance and one of the concerns of revising the Polar Codes. As the shipping industry is one of the HFO users, the IMO must take its advantages in proposals construction and compliance supervision, and the Arctic Council must give full play to its influence to mobilize its member states to make comprehensive considerations and balance the interests of the Arctic coastal states and user states, thus exploring a comprehensive, effective, environment-friendly and cost-effective solution for the governance of HFO in shipping, which can tackle the issue of the use and carriage of HFO by ships in Arctic waters and achieve more effective governance of the Arctic environment.

References

[1] Circumpolar Conservation Union et al. Proposals for Mitigating the Risks associated with the Use and Carriage of HFO by Vessels in the Arctic, MEPC 70/17/4, 2016.

[2]Canada et al, Measures to Reduce Risks of Use and Carriage of Heavy Fuel Oil as Fuel by Ships in Arctic Waters, MEPC 71/14/4.2017

[3] Record of Decisions and Follow-up Actions PAME II-2017(18-20 September 2017) Helsinki, Finland.

[4] Comer, B., Olmer, N., Mao, X., Roy, B., and Rutherford, D. (2017). Prevalence of heavy fuel oil and black carbon in Arctic shipping, 2015 to 2025. The International Council on Clean Transportation. Available at: http://theicct.org/2015-heavy-fuel-oil-use-and-black-carbon-emissions-from-ships-in-arctic-projections-2020-202.

[5]Deere-Jones, T., 2016. Ecological, Economic and Social costs of marine/coastal spills of fuel oils (refinery residuals). A Report to the European Climate Foundation.

[6] Arctic Marine Shipping Assessment 2009 Report (AMSA, 2009). Arctic Council, April 2009 (5).

[7] Det Norske Veritas AS, (DNV, 2011), "Report for PAME: Heavy Fuel in the Arctic (Phase 1)" (2).

[8] IMO Secretariat, Report of the Marine Environment Protection Committee on its Seventieth Session, MEPC70/18, 2016.

[9] IMO Secretariat, Report of the Marine Environment Protection Committee on its Seventy-First Session,MEPC71/17,2017.

[10] USA et al, HFO Indigenous Use Project, PAME (II)17/5.2 /a/ii,2017.

[11]Roy, B. and Comer, B. (2017). Alternatives to heavy fuel oil in the Arctic: Economic and environmental tradeoffs. The International Council on Clean Transportation. Available at: http://www.theicct.org/alternatives-to-Arctic-HFO-use-economic-and-environmental-tradeoffs.

[12] FOEI et al, Current and Projected Vessel Traffic in The Arctic: Heavy Fuel Oil Use And Its Alternatives, MEPC 71/16/4, 2017.

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