MSC continues container ship order rally with new major order
17.12.2024
The Swiss container shipping giant MSC continues its strong order streak, placing a new massive order for newbuild container ships.
According to Alphaliner, MSC has placed an order for ten vessels, each with a capacity of 24,000 TEUs, at the Chinese shipyard Hengli Heavy Industry. The delivery of the newbuildings is expected to begin in 2028, with the value of the deal estimated at around US$2.35 billion.
This new order further increases MSC’s orderbook, which now surpasses the 2 million TEU mark, reaching 2.13 million TEUs.
Given that Ocean Network Express (ONE), the sixth-largest container line, has a fleet of 1.96 million TEUs, MSC’s orderbook could be considered the “sixth-largest container fleet” in the world.
It is worth noting that in September last year, MSC placed orders for ten dual-fuel LNG-powered container ships, each with a capacity of 21,000 TEUs, at the same shipyard.
What Scuttled the Global Plastics Treaty Talks in Busan?
09.12.2024
Momentum for a global deal to tackle global plastic pollution stalled this month in South Korea, after a small group of oil-producing countries held out against over 100 pushing for an ambitious treaty that restricted production.
As a result, negotiators from 175 countries left Busan without achieving their agreed mandate to draft a treaty by the end of 2024, and the process will be deferred to a new meeting next year.
“I am equal parts disappointed and inspired,” says Sivendra Michael, Fiji’s Permanent Secretary for Environment and Climate Change, and lead negotiator for the Pacific Small Island Developing States. “Disappointed that a small group of countries were able to take the process hostage by what I would call the ‘dark arts’ of multilateral negotiations. Inspired by the show of strength from over 100 countries who pushed back.”
The Busan gathering was meant to be the final meeting of five, a process set in motion in 2022 when countries adopted a UN Environment Assembly (UNEA) resolution promising to draft an international, legally-binding deal to tackle plastic pollution. Since then, countries have been meeting to form “international negotiating committees” (INCs) to compile a draft. Up for debate at these INC meetings were measures to reduce the scale of plastic production, phase out harmful plastic products and chemicals, and establish a financial mechanism to help developing countries implement the changes a treaty might require.
Over seven days of negotiations ending on 1 December, countries’ representatives debated a streamlined draft of a text that had ballooned at previous meetings. It was hoped they would reach a final agreement. That is not what panned out: by the final hours, deep rifts remained on key topics, blocking the path forward.
The heat of production
On the topic of plastic production especially, sparks flew in Busan. Many countries proposed text in the treaty that would lay out controls on global production of plastic, which stands at over 400 million tonnes annually, and could triple by 2050 unless curbed. The UNEA mandate for the treaty is to address plastic pollution across its full life cycle. Most countries say that starts with production, recognizing that the world is already unable to cope with the volume of plastic being made.
But throughout the treaty process, a handful of countries - including Russia, Iran, and Saudi Arabia - have fought such language, calling instead for downstream measures to manage pollution. This self-described “like-minded” group of countries all have large oil and petrochemical industries that form the basis of plastics.
They proposed “no text” on plastic production, meaning they did not want to impose any controls. “If you address plastic pollution, there should be no problem with producing plastics, because the problem is the pollution, not the plastics themselves,” Saudi Arabian delegate Abdelrahman bin Mohammed Algwaiz said at a plenary meeting.
According to analysis by the Centre for International Environmental Law, multiple national delegations, including Iran’s, included industry lobbyists, of which there were over 220 registered to attend INC-5. This is more people than were in the delegations of South Korea or the EU.
As INC-5 wore on, the like-minded group’s unmoving stance on production – and their resistance to restricting the use of “chemicals of concern” that may harm human health – began to grate on some negotiators. “We always try to work on proper consensus. But we know that on this topic [of production] it will be very, very difficult to have that,” Kirving Lañas, a delegate from Panama, told Dialogue Earth in the middle of the process.
‘Triple-threatened’ nations demand change
In the final days of the meeting, an unprecedented bloc of 102 countries, led by Panama and the Pacific Small Island Developing States, banded together to unanimously support proposals for a draft text that included a global plastic production reduction target. Ninety-four also supported legally-binding measures to phase out harmful plastics and chemicals.
“There are just a few voices that are blocking progress, and we cannot allow those voices to overrule the will of global citizens and almost all governments on Earth,” Juan Carlos Monterrey Gómez, a delegate from Panama, said during a press conference. The vocal bloc suggested that not having these elements in the treaty would be a red line for them.
“There’s not any room to compromise on those,” says Dennis Clare, a legal adviser for the Federated States of Micronesia. Islands like Micronesia face a “triple existential threat: to food, economy, and geophysical survival” from plastic pollution, he added, the lattermost referring to sea level rise and the climate impacts of emissions-intensive plastic production.
A plastic food packaging facility in Binzhou, China. Plastic production was a sore spot at INC-5, with many saying that a proposed draft text containing a global reduction target was later watered down due to disagreements (Image: FOTO / Sipa USA / Alamy)
Strikingly, the bloc featured the 27 countries of the EU, a major plastic-producing region that has typically championed plastics circularity, believing plastics are essential but should be reused where possible.
Before the recent US election, countries wanting an ambitious agreement had high hopes that the United States, a major plastics producer, would positively influence the talks. The country had come out in favor of production cuts after INC-4 in Ottawa. But before the Busan meeting, the US backed away from that position and did not publicly support proposals to cut production in Busan. Nor did China, the world’s largest producer of plastic – although towards the end of the meeting, public statements by China urged countries to take policies aligned with the “whole life cycle of plastics”.
When the chair released a final version of the text on the last day of negotiations, many felt it had weakened. The article on production still contained options for “no text”, and some of the ambitious language had been softened. The article on a potential financing mechanism was riddled with brackets, signalling disagreement. And in a section previously devoted to managing plastic products and chemicals of concern, “nearly every aspect of the text is in brackets, and ‘chemicals of concern’ has been removed from the title”, noted Erin Simon, vice president and head of plastic waste and business at WWF.
Emotions run high at the end
At the end stage of the talks, a visibly emotional delegate, Andre Volentras, appealed to “human decency”.
“What has the world come to?” asked Volentras, who is part of the Secretariat of the Pacific Regional Environment Programme, an intergovernmental body that provides technical support to the Pacific Islands. “With climate change, you can’t see CO2. But you can see this waste… We can see this is a huge problem, so let’s be serious about tackling it. I just find some of these filibustering and stalling tactics evil.”
At the meeting’s final plenary session, Juliet Kabera, a delegate from Rwanda which has also led ambitious proposals to cut plastic production, called on nations to “stand up for ambition”, triggering a remarkable scene where hundreds of delegates and observers stood up to applaud. But by that point, with the conference venue booked for another meeting the next day, there was no longer time to resolve differences. Hours later, the chair gavelled the meeting to a close and scheduled a new meeting – dubbed INC-5.2 – to continue the process.
There are mixed feelings about having another INC. “It’s not ideal. But I believe extending the negotiations was necessary. It’s definitely better than settling for a weak treaty,” says Salisa Traipipitsiriwat, senior campaigner at the Environmental Justice Foundation. Traipipitsiriwat adds that INC-5.2 must avoid the mistakes of INC-5, where hundreds of observers – including scientists and civil society groups – were excluded from the last three days of negotiations.
There is a risk of another meeting “simply recreating this exercise in a new location with the same cast of characters”, says Christina Dixon, ocean campaign leader at the Environmental Investigation Agency.
Time for a vote?
Historically, UN multilateral agreements have been guided by the principle of consensus. For the plastic treaty, there are practical reasons to aim for this again, such as not alienating major plastic producers from the process, which could threaten the effectiveness of the final deal.
If the stalemate continues, however, ambitious countries may consider another option to move the treaty forward: voting. This is a rarely-used fallback in multilateral agreements, allowing countries to move beyond an impasse, usually with a two-thirds majority.
Early on in the plastics treaty process, at INC-2 in Paris, the like-minded group of countries challenged the procedural voting rules. This made it so that if nations needed a vote to move forward, it would necessitate a time-consuming debate over the system to be used. Many observers believed this was a stalling tactic, and since then, the issue has not been revisited. Civil society groups have urged countries to reopen that discussion.
It is important “to keep in mind that this agreement is being negotiated with unprecedented speed”, says Felipe Victoria, senior manager for international plastics policy at the Ocean Conservancy. “To put it into perspective, the Paris Agreement took nine years. The High Seas Treaty took 19 years. We’re doing this one in two years.”
From here, it remains unknown how long that supposedly two-year process will stretch out. Options have been floated for INC-5.2 to be held in May, or later in 2025. In the meantime, Fiji’s “disappointed and inspired” Michael is hopeful that nations will push on.
“We trust the multilateral process will deliver the mandate of [the UNEA resolution], and urge the minority [like-minded countries] to recognise the bigger problem at hand, instead of playing victims,” he says.
The world needs to produce less plastic to really tackle plastic pollution, he insists. “As has been said several times, you can’t mop the floor with the tap on.”
Emma Bryce is a freelance journalist who covers stories focused on the environment, conservation and climate change. This reporting was supported by a travel grant from GRID-Arendal.
Chinese Ship Suspected of Subsea Cable Sabotage Has a Twisted Anchor
25.11.2024
A Chinese bulker happened to be maneuvering near two subsea cables at the time they were severed last weekend, and it appears to have a damaged anchor, according to Danish public radio outlet DR.
The bulker Yi Peng 3 was outbound from St. Petersburg in the Baltic during the timeframe of two back-to-back cable breaks on November 17-18. Its AIS record shows that it exhibited unusual course and speed changes at suspicious locations, attracting scrutiny from the authorities. "The ship has been near the two places at certain times when the incidents have taken place," police inspector Per Engstrom told SVT.
A Danish Navy patrol vessel intercepted and shadowed the Yi Peng 3 as it transited towards the Great Belt, and the bulker decided to interrupt its voyage to go to anchor in the Kattegat shortly after. Denmark stopped short of saying that the Yi Peng 3 had been detained, but a Danish patrol vessel has been monitoring it closely. Two other NATO vessels - German and Swedish - have joined to create a growing government flotilla near the Yi Peng 3.
Engstrom told SVT that the authorities would need evidence of a crime in Swedish waters to justify a detention or a boarding, and the available information does not yet rise to that standard.
"Everything points to the Chinese ship. It has slowed from 6.9 to 3.4 knots around the damaged cables and was in a Russian port before sailing out into the Baltic," former chief Danish defense intelligence analyst Jacob Kaarsbo told outlet TT over the weekend.
DR obtained a photo of the Yi Peng 3's port side anchor, and the news outlet showed the image to several maritime experts for their thoughts. The photo shows that the anchor's flukes are clearly twisted at the tips.
"They are twisted in different directions, which may very well indicate that one side of the anchor has become stuck in something down on the bottom or in some rocks," mariner Capt. Lars Bo Nielsen told DR. "I have never seen such a bent anchor before."
The last serious cable break in the Baltic was caused by the Chinese boxship NewNew Polar Bear, Chinese authorities confirmed earlier this year. Half of the Polar Bear's anchor was recovered near a ruptured gas pipeline between Finland and Estonia: it had been dragged for hundreds of miles, its stock had torn in two, and one fluke had broken off. An investigation into the NewNew Polar Bear incident is still under way, and investigators have not yet concluded whether the anchor damage was accidental or an act of sabotage.
This time, governments around the Baltic are working on the assumption that the cable damage was intentional. "No one believes that these cables were accidentally damaged. And I don't want to believe in the versions that anchors are to blame," said German Defense Minister Boris Pistorius last Tuesday. "So we have to conclude, without knowing who did that, that this is a hybrid action. And we also have to assume, without knowing, of course, that this is sabotage."
India Rolls Out Subsidies and Preferential Financing for its Shipyards
18.11.2024
India is set to unveil a new policy aimed at incentivizing domestic shipbuilding. The ports, shipping and waterways ministry (MoPSW) is finalizing a cabinet note on incentives to promote domestic shipyards, reported the Indian business newspaper Mint. The proposed incentives are primarily focused on encouraging the development of fuel-efficient and technologically advanced vessels.
The new incentive program is the second phase of the existing Shipbuilding Financial Assistance Policy (SBFAP), which was adopted in 2016 and slated to expire in 2026. In the first phase of SBFAP, 313 vessel orders encompassing both domestic and export orders have been procured by 39 shipyards. So far, 135 vessels have been delivered.
During the second phase, the government reportedly wants to allocate $2.1 billion for the program. This will help provide a 25 percent subsidy for specialized vessels, rising to 30 percent for green and highly specialized vessels.
Another significant proposal is issuing credit notes worth 40 percent of a ship’s scrap value. After a demolition sale, the credit note could be reimbursed against the cost of constructing a new vessel at an Indian shipyard. Through this proposal, the government is hoping to encourage fleet renewal of Indian vessels. Around 44 percent of India’s merchant shipping fleet is above 20 years of age, data from MoPSW shows.
In addition, the government is also considering to introduce a purchase preference policy beginning in fiscal year 2031. This means vessels seeking new registration for coastal cargo transport in India would need to be built at a domestic shipyard.
India is targeting the shipbuilding industry as one of the critical pillars in achieving its Atmanirbhar Bharat vision (self-reliant India). The goal is to increase the percentage share of India-built ships in India’s fleet to seven percent by 2030 and 69 percent by 2047. The subsidy programs are key in making Indian yards as competitive as those of China and South Korea.
India is also in the process of giving the shipping industry infrastructure status for the first time. Currently, only shipbuilding and shipyards have infrastructure status, but the broader coverage will help reduce project costs for the shipping sector. Infrastructure status means a company can float infrastructure bonds, hence attracting investments from commercial banks and other kinds of concessions.
China Angered by the Philippines' New Maritime Laws
11.11.2024
On Friday, the Philippine government enacted two long-awaited laws to reinforce its jurisdiction over its western exclusive economic zone, where China has been steadily encroaching for the last 10 years. The new legislation drew immediate pushback from Beijing, and China's foreign ministry summoned the Philippine ambassador to register its objections.
"With these pieces of legislation, we align our domestic laws with international law, specifically the United Nations Convention on the Law of the Sea or UNCLOS, improve our capacity for governance, and reinforce our maritime policies for economic development and for national security," said Philippine President Ferdinand Marcos Jr. "Our people, especially our fisher folk, should be able to pursue their livelihood free from uncertainty and harassment."
The new Maritime Zones Act formally designates the Philippines' economic zone boundaries, and the new Archipelagic Sea Lanes Act describes a set of designated sea lanes for merchant shipping.
While the Philippines' EEZ is well-defined under UNCLOS, the new Maritime Zones Act reinforces the country's sovereign claim by enshrining it in national law. It also formalizes the government's preferred term for the contested area: for the purposes of Philippine law, the portion of the South China Sea that falls within the Philippine EEZ is now the "West Philippine Sea," removing the word "China" from the area.
"There’s no space for doubt because it’s clear under international law and our domestic laws where our limits are," maritime law expert Jay Batongbacal explained to Rappler. "That’s the final step to make clear what is ours."
In addition, the new Archipelagic Sea Lanes Act will set out three new standard routes for navigation through Philippine waters, and Manila will submit these to the IMO for debate and approval. Indonesia is the only other nation to have gone through this consultative process.
China's government summoned the Philippine ambassador immediately after the laws were signed, and Chinese officials delivered a vigorous and public protest.
China claims sovereignty over almost all of the South China Sea, citing a history of Chinese navigation and activity in the region. Its claim area encompasses international waters and the EEZs of its neighbors, up to a thousand nautical miles away from the Chinese mainland. Beijing asserts that the UN Convention on the Law of the Sea validates its historically-based claim, but the treaty is based on physical distances, and lacks text regarding historical events. The Permanent Court of Arbitration in the Hague ruled against China's sweeping claims in 2016; however, the China Coast Guard continues to attempt to implement Chinese control over the Philippine EEZ using water-cannoning, ramming, boarding and vessel confiscation.
"The so-called arbitral award on the South China Sea is illegal, null and void. China does not accept or recognize it. We oppose and do not accept any claim or action based on the award," explained Chinese foreign ministry spokeswoman Mao Ning on Friday. "The Philippines seeks to justify its illegal claims and actions in the South China Sea by approving the so-called “Maritime Zones Act” in the name of implementing UNCLOS. This is illegal, null and void. . . . China will firmly oppose any infringement activities and provocations by the Philippines in the South China Sea based on the act."