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their large volume of ballast water and meet IMO ballast water discharge standards. Some
observers are placing the number of ships that will need to comply with IMO ballast water
regulations at around 50,000.
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This may mean that demand for BWTS will be significantly
higher than 50,000 units.
Assuming that the regulations receive 100% compliance, our review of the Lloyds Fairplay
world merchant fleet database suggests that there will be a spike in demand for treatment
systems as vessels attempt to meet Phase One standards for 2016. Whether the system supply
capacity will have been developed in time has yet to be determined.
International success in achieving the goal of reducing the environmental and economic risks
from harmful aquatic invasive species depend on three factors: 1) the limits regulations place on
allowable concentrations of living organisms in ballast water discharge water; 2) the availability
of technologies to meet those limits; and 3) the willingness of ship operators to comply with the
regulations. A major challenge in understanding the size of the ballast water treatment
technology global market is the extent to which regulators will meet their goal of 100%
compliance. In this sense, technology vendors are competing with each other, but also with a
market share consisting of those shipowners who decide not to comply. Compliance monitoring,
measurement, and verification methods require further analysis and development to ensure that
the goals of international and national ballast water regulations are achieved.
If enforcement and penalties are significant enough to provide real incentives for shippers to
compete with each other to have BWTS installed in anticipation of implementation, will demand
for BWTS be spread out enough to avoid supply bottlenecks? How are vendors and shipyards
likely to change their pricing strategies as demand grows and begins to outstrip supply and
installation capacity? How will their pricing strategies be affected by the knowledge that a spike
in demand by the existing fleet to meet Phase 1 standards will be followed by a crash in demand
as only newly-built vessels need to install systems in subsequent years? Will the market be
driven by expectations of high demand, or of low supply; and will venture capitalists be willing
to invest significantly in manufacturing capacity to satisfy a temporary rush in demand for
equipment that is predicted based on expectations of strong political will to support a costly
international environmental program? If the regulations are successful, will the market crash
after the global fleet is outfitted? These questions merit further research, particularly in light of
the proposed stricter “Phase Two” regulations anticipated after 2016.