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Introduction
After more than a decade of technical analysis and political debate at the national and
international level, legislation by the International Maritime Organization (IMO) to require
ballast water management on ships is coming closer to ratification. Proposed rulemaking by the
United States Coast Guard (USCG), which largely mirrors the IMO requirements, was published
on August 28, 2009, adding to the momentum for implementation of ballast water discharge
standards which are expected to be met by installing onboard ballast water treatment systems that
operate during ballasting, during deballasting, during transit, or in some combination.
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The IMO convention is scheduled to take effect 12 months after ratification by 30 countries
representing 35% of the world’s commercial tonnage. As of October 31, 2009, 18 countries had
ratified the convention, representing 15.36% of the world’s shipping tonnage.
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Ratification by
Panama, with more than 20% of the global shipping tonnage, would be sufficient to meet the
35% requirement, and a number of European Union countries would be expected to follow suit.
Because of delay in ratification by a sufficient number of countries, IMO granted a delay for the
first set of ships subject to the regulations, those ships constructed in 2009 or later with a ballast
capacity of less than 5000m
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. These ships now have until the vessel’s second annual survey, but
no later than December 31, 2011, to comply.
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But, by 2016, all ships subject to the regulations
will be required to have operational ballast water treatment systems (BWTS) on board.
For planning purposes it would be useful for industry leaders and governments in IMO member
nations to have preliminary answers to questions about: the potential size and value of the global
markets for BWTS; how they are likely to develop after the ratification and implementation of
IMO ballast water standards; and how they will be affected by the way IMO and U.S. ballast
water standards are monitored and enforced.
To develop preliminary answers to these questions we first examined the expected cost of
purchasing and installing various types of BWTS on representative ships in eight ship type/size
categories that make up most of the global merchant fleet that will be affected by IMO ballast
water regulations. That research and preliminary cost estimates are presented in a 2009
University of Maryland, Maritime Environmental Resource Center (MERC) discussion paper
titled: “A Preliminary Analysis of Ballast Water Treatment Costs” which is available on-line at
http://www.maritime-enviro.org/reports/Reports.html/.
We then examined Lloyds global shipping fleet data as of November 9, 2009 to determine the
size, type, flag, and age of the vessels in the global fleet that are likely to install BWTS to meet
IMO ballast water discharge standards. With full compliance, we estimate that more than 68,000
vessels in
the global merchant fleet will eventually install on-board BWTS. Depending on a
number of factors that are still uncertain this estimate of the relevant global fleet may result in
high or low estimates in the corresponding size of the global BWTS market. For purposes of our
analysis, for example, we assume that all vessels will comply regardless of their age. However,
it is likely that some older vessels will either be retired, rerouted so that they are not subject to
BW regulations, or simply not comply. This would make our estimate of the relevant fleet high.
On the other hand, we also assume that only one unit will be installed per ship in the relevant
global fleet when, in fact, some larger vessels may require multiple units. This would make the