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Friday, December 15, 2017

POINTS OF VIEW

As Europe expands its boundaries and welcomes in new blood, so the balance of power shifts, changing the status quo and leaving Europe’s heavyweights evaluating a new game in Brussels (see Weekly NEWS No. 18 dated 30 April 2004). The new Member States have full voting rights in Europe’s Council from 1 May 2004, although their rights are to a certain degree proportionate to the size of these countries. But since only a very limited number of issues actually come to a vote, with most being sorted out by consensus, the potential impact of some of the new countries might be quite significant.

More important for the shipping industry, the expansion of Europe also means the expansion of its fleet. The former 15 EU countries had a combined fleet of 49.5m dwt of tankers of over 10,000 dwt – 16% of the world tanker fleet. The ten new countries who joined the EU on May 1 do not all have tanker fleets. But Cyprus, Malta and Latvia between them have 24.8m dwt – 8% of the world fleet. Thus EU flags now control almost one quarter of the world tanker fleet. With the inclusion of the EEA countries - Norway, Iceland and Liechtenstein - another 13.8m dwt is added to the EU fleet, taking it to 28.5% of the world tanker fleet.

This means two things. First, at least one quarter of the world tanker fleet now has a single-hull phase-out schedule and heavy grade oil (HGO) rules different from the international ones, until international MARPOL regulations catch up this time next year. Europe’s Regulation 1726/2003 on unilateral single-hull phase-out and heavy grade oils entered into force on 21 October 2003, whereas the amendments to Regulation 13G and the addition of new Regulation 13H to Annex I of MARPOL 73/78 (which were adopted at MEPC 50 on 4 December 2003) enter into force on 5 April 2005 (see Weekly NEWS No. 16 dated 16 April 2004

In practice this means Category 1 single-hull tankers delivered on/before 21 October 1980, and also Category 2/3 tankers delivered in 1975 or earlier, may no longer fly ANY EU flag, nor enter/leave ports/offshore installations/anchorages under EU jurisdiction (1981-built Category 1s are barred this year and 1982-built next year; 1976-built Category 2/3s are barred this year and 1977-built next year).

This also means that no single-hull tanker, regardless of flag, carrying HGO may now enter/leave ports/offshore installations nor anchor in ANY area under EU jurisdiction – which now includes Estonia, Latvia and Lithuania. However in principle EU-flagged single-hulls may carry HGO outside the EU.

Second, this new balance of power in the distribution of the world tanker fleet makes it likely that, although Brussels has publicly acknowledged the importance of regulating international shipping at the IMO, the use of its newly increased weight will enable it to apply considerable pressure on points that it considers of particular importance. Future discussions on tanker safety and tanker operational and technical issues involved with the transport of crude oil and refined petroleum products will doubtless see a greater EU influence.

Contact: Bill Box