Shipping industry sails into unknown with new pollution rules

A cargo ship berthing at Qingdao port in Qingdao in China's eastern Shandong province. (File/AFP)
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Updated 12 December 2019

Shipping industry sails into unknown with new pollution rules

  • New rules aim to avert 570,000 premature deaths by 2025
  • Regulation kicks in Jan. 1, shipping sector nervous

LONDON: Faced with imminent new global marine pollution rules, shipping companies and insurers are puzzling over the risks.
To reduce emissions of toxic sulfur that cause premature deaths, shipowners who have long relied on the dirtiest residues of oil extraction will have to either switch to low-sulfur fuel or install exhaust gas cleaning systems from Jan. 1.
Neither option has been fully tested for long, and some problems have already been reported, both with the more expensive new fuels and with devices known as scrubbers which extract the sulfur on board.
Interviews with key players in the industry show varying levels of alarm at potential risks, which they say range from unexpected fires or collisions due to engine failure to liability for inadvertently flouting the rules.
The container shipping industry alone is having to invest $10 billion to adhere to the new rules, analysts say, and is concerned about extra costs were things to go wrong.
If different types of the new, cleaner fuel are mixed, for example, they may produce a residue which could eventually clog up an engine and, in a worst-case scenario, damage or break it.
Several large ship owners said handling the new fuels correctly and making sure the scrubbers were properly deployed would minimize danger, but that if care was not taken, problems could arise.
“The big guys are going to be serviced by the right people … there is bigger risk for the smaller ships,” Hugo De Stoop, chief executive of leading Belgian tanker operator Euronav , told Reuters.
Euronav has bought the equivalent of almost six months’ supply of compliant fuel and is storing it in a megatanker off Malaysia. If a ship is too far away and has to buy fuel, it will try to buy a single type, or, if only a blend is available, ask to see the seller’s lab tests.
“We don’t always believe that people have done the test, been diligent about it,” he said.
Khalid Hashim, managing director of one of Thailand’s largest dry cargo ship owners, Precious Shipping, said it had not allowed co-mingling of marine fuel, also known as bunker fuel, for over five years and required all of it to be sample tested.
“Of course this costs us annually around $100,000, but we prefer that cost than to use untested bunker oil based solely on the Bunker Delivery Receipt and find that we have a massive problem on our ship,” he said.
The company had taken measures to reduce its ships’ fuel consumption to offset some of the extra costs and had installed extra compartments for the tanks on board to avoid mixing, he said.
“That way we would have future-proofed our ships for the IMO 2020 regime,” Hashim said, referring the UN International Maritime Organization’s rules, agreed by more than 90 countries in hopes of saving more than half a million lives by 2025 alone.
Around 172 ships have avoided the problem because they are powered by sulfur-free liquefied natural gas (LNG), data from Norwegian risk management and certification company DNV GL showed, but this in an expensive option.
Some ship owners have balked at paying for the new 0.5% sulfur fuel, which is quoted at more than twice the price of the 3.5% high-sulfur grade in northern Europe at the moment.
More than 3,000 ships — around 5% of the global fleet — will have scrubbers fitted by 2020 so they can clean the exhaust gas and so continue using existing fuel, the DNV GL data showed.
Some ports have banned one type of scrubber, the open-loop version which empties washwater residues into the sea, and insurers have reported cases of fires or corrosion with the devices.
Norwegian ship insurer Gard cited a few cases where sparks from welding or cutting fell into a scrubber through uncovered openings: in one case it spread to the engine room through glass reinforced epoxy piping.
If corrosion was legally deemed to be inevitable, underwriters might try to deny related claims, said Stephen Harris, senior vice president with insurance broker Marsh.
“Whether underwriters adopt this line or not could depend on how frequent and how big the problem becomes next year.”
Roger Strevens, VP of global sustainability with Norwegian shipping company Wallenius Wilhelmsen, said its experience with scrubbers had shown risks could be minimized if done properly. “If you buy cheap, you’ll pay twice,” he said.
Nautilus International, a union which represents over 20,000 workers in shipping, said the use of new fuel types would place extra strain on crews, who have reported incidents including power loss when changing fuels, filter problems and leaks.
“These are complex requirements,” Nautilus professional and technical officer David Appleton said, calling for comprehensive training and protection in cases of inadvertent infringements.
An underlying problem is that oil refineries are not obliged to produce tailor-made shipping fuel, said Neil Roberts, head of marine underwriting at Lloyd’s Market Association, which represents the interests of all underwriting businesses in London’s Lloyd’s insurance market.
“The ship’s crew has to test it and filter it,” he said.
The IMO said it does not have a remit to regulate the fuel industry but that international standards for the new fuel and information about compatibility between types had been issued as part of comprehensive preparations.
“IMO is ready, and we are confident IMO member states and the shipping sector are ready for January 1,” an IMO spokesperson said.
Protection and Indemnity (P&I) clubs, through which groups of shipping companies cover injury and pollution claims, are in wait-and-see mode.
Alvin Forster, deputy director with North P&I club, cited possible engine failure in busy shipping lanes, while Precious Shipping’s Hashim said members investing in expensive low-sulfur fuel should not have to share the loss on any scrubber claims.
Harris from Marsh, a broker active in marine insurance including hull and machinery, said assessing cover was still guesswork: for instance, who should pay a fine for a ship using high-sulfur fuel because no alternative was available?
“Is it non-compliance?” he said. “The question marks are bigger than the answers.”


INTERVIEW: ‘Women’s empowerment is happening and heartfelt,’ says Saudi university head Einas Al-Eisa

Updated 26 January 2020

INTERVIEW: ‘Women’s empowerment is happening and heartfelt,’ says Saudi university head Einas Al-Eisa

  • “I’m leaving Davos convinced that we’re heading in the right direction.”: Al-Eisa
  • Recently the World Bank rated Saudi Arabia as the leading country in the world in terms of fostering female equality

If any of the aspirational young women of Saudi Arabia need a role model, they should look no further than Einas Al-Eisa, the rector of the Princess Nourah Bint Abdulrahman University in Riyadh.

I caught up with her at Davos last week, at the annual meeting of the World Economic Forum (WEF), where she told me one of the most inspiring and heartwarming stories I have ever heard. She was reluctant at first to go “on the record” about her family history, but finally agreed, not least because I insisted. It was too good a story to leave untold.

“Let me tell you something personal. I’m a second-generation female doctor of philosophy. My mum went to the first school ever to open for girls in Saudi Arabia, and she continued to go all the way to be a university professor. She was able to pursue her dream in Saudi Arabia, and became a history scholar. I’m 15 years on from my PhD, in anatomy and neurobiology, in Canada,” she said.

“Now my daughter is doing engineering. That just tells you all the evidence of the amount of empowerment and accelerating change in the Kingdom. Change is real, happening and heartfelt. We really have a good story to tell the world,” she said while in Saudi Arabia’s headquarters overlooking the snowy Congress Hall of the WEF.

Princess Nourah University — or PNU as Al-Eisa calls it — is the biggest female academic institution in the world, with 35,000 students spread across
8 million square meters in the Saudi capital in 600 buildings. It grew out of the College of Education opened in 1970, and is named after the sister of King Abdul Aziz Ibn Saud, the founder of the Kingdom.

Her job carries a huge responsibility. “It’s a big challenge, not just for me, but globally. Empowering women is a challenge worldwide,” she said.

She, and the Kingdom, are rising to that challenge. Recently the World Bank rated Saudi Arabia as the leading country in the world in terms of fostering female equality, after a raft of measures to give women essential rights to education, employment and mobility. A new generation of women — like her daughter — is growing up in the Kingdom, increasingly self-confident of their place in Saudi Arabia and in the world, under the Vision 2030 strategy to transform the country.

Al-Eisa is an enthusiastic supporter of the changes, and dismisses suggestions that some of the more conservative parts of the Saudi demographic oppose them.

“Let me take a step back, and talk about the transformation. It’s about opening new sectors that will build the capacity of society as a whole — the quality of life, health, education, job opportunity, economic development — so that we can develop sectors like entertainment, culture, and technology.

BIO

BORN:

Riyadh, Saudi Arabia

EDUCATION:

Doctorate in anatomy and neuroscience, Dalhousie University, Canada

Harvard University Professional Development Programs, US

CAREER:

Dean, Department of Science and Medical Studies, King Saud University

Vice-dean, College of Nursing, Saudi Arabia

Rector, Princess Nourah Bint Abdulrahman University

“These are all perfect opportunities for the whole of society to engage in, and now with the rate of enrolment of women in the private sector increasing from 19 percent to 23 percent in just one year, that reflects the engagement of the whole of society. As a university, we study this progress, the implementation of the policies, and the impact of the reforms,” she said.

Perhaps the most encouraging aspect of the big changes underway in the Kingdom is the trend for women to study what have traditionally been regarded as exclusively male domains — science, technology, engineering and mathematics, the STEM disciplines. Of the 5,200 who graduated from PNU last year, 1,400 came from STEM faculties.

“I predict a huge contribution from women in that sector in the very near future. One good story that comes from Saudi Arabia is the increased number of women engaging in the technology sectors, for example, versus the drop we see worldwide. Elsewhere women are moving away from these fields, whereas in the Kingdom, the number is going up constantly,” she said.

Education in the Kingdom remains segregated in terms of gender, but she does not think that is a significant or fundamental issue. In the West and in other parts of the world, co-education is the norm, but there have been many serious academic studies that have questioned the benefits of mixed-sex education. She is in no hurry to push for co-education in Saudi Arabia, on grounds of academic pragmatism, rather than any moral or ethical issues.

“If you go back to the literature and look at the assessment of the value of women studying in a campus of only women, there is enough global evidence to support the value of women-only education, in a women’s environment. There is enough evidence out there, but still it is a source of debate,” she said.

“Women are less intimidated in the fields of technology and engineering when they are taught in a safe environment. The way we are tackling that is to ensure that women have the best educators, the best learning opportunities, the best curricula, irrespective of gender,” she said.

Many of the faculty staff are male, she pointed out, so the young women studying at the university are not completely segregated. “We have male and female teachers in PNU, and we will continue to support more women in academia, in engineering especially, as faculty staff, and as engineers in the field. We will continue to empower women and I guarantee they are not isolated,” she said.

The crucial issue is what young women do after graduation. The Vision 2030 reform strategy envisages a big increase in the female workforce, rising to as much as 30 percent over the next decade. Recent statistics show that the Kingdom is well on the way to reaching that target, with 23.5 percent of the private sector workforce being female, according to official figures.

But for Al-Eisa, it is not just a simple matter of meeting official quotas. Again, she takes an academically pragmatic view.

“Just like it should be everywhere else in the world, it’s the competency of the graduates that dictates where they go. We have a very good story in the health sector — nearly 40 percent of people working in health are female, reflecting the parity and the power we have achieved after investing so much in health and education,” she said.

PNU works closely with INSEAD, the French management institute, to ensure that young women graduating from the university are equipped with the skills to get them jobs in increasingly competitive managerial professions.

She also works with the Ministry of Education in its “Women Leaders 2030” program that nurtures young women to become business leaders in the private sector. The ministry’s work is closely coordinated with the UN’s sustainable development goals which also align with Vision 2030.

“It’s very important to produce holistic leaders, women who understand the challenges and bigger issues in the wider world,” she said.

Her visit to the WEF has certainly opened her eyes to the bigger picture. All the issues that concerned her back in Saudi Arabia were also on the WEF agenda, she said, and she was “pleasantly surprised” that Davos was not all about money and economics.

“I come from the education sector, and I thought there will not be much for me in Davos, but there is so much going on, in investment, in education, in new opportunities, in skills development, science, science breakthroughs. I was impressed by the wide array of topics discussed and the caliber of discussions,” she said.

She will leave Switzerland with a new set of ideas to further promote the role of women in Saudi Arabia.

“The session on Education 4.0 was a very good exchange of ideas, and made me think how Saudi Arabia must invest even more in the infrastructure of education, curriculum development, teachers’ preparation programs and the rest.

“It’s time now to experiment with more disruptions in education. I’ve learned new ideas about education and I’m going home with the conviction that we’re heading in the right direction. Now when we talk about concepts like artificial intelligence, cybersecurity and data science, these are new programs that are opening up for all women. This is the language of the world, not just for Saudi Arabia,” she said.

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