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market for BWTS larger than what is reflected by our estimate of the number of ships
complying. And while we include more than 8,000 fishing vessels under 1000 DWT, we assume
that these smaller vessels in this fleet are likely to comply through use of less expensive products
that are still to be determined and approved and are not considered in our analysis of BWTS.
Even with these caveats, the number of ships in the affected global fleet represents a massive
global market for BWTS, perhaps 10,000 units per year (or 30 installations per day). This means
that if the IMO “D-2” regulation timetable is to be met, the capacity to produce and install
BWTS will need to grow enormously between now and 2016. Of course, once existing ships are
in compliance, hopefully by 2017 or so, only newly built ships will require the installation of
BWTS, so global BWTS markets will then shrink to around 2,000 ships per year (five or so
installations per day).
In anticipation of this large emerging market for BWTS, many entrepreneurs and potential
vendors have developed a range of technologies that could serve the global BWTS market. As
of July 2009, however, only eight BWTS had been fully certified by the IMO as achieving levels
of efficacy at removing or killing organisms that will meet IMO ballast water discharge
standards. We contacted technology vendors whose systems had been approved by IMO to
obtain information about the cost of purchasing, installing and operating various BWTS and to
help understand what types and sizes of ships and on which shipping routes they are most likely
to be used. Based on information we collected about the range of costs and the suitability of
these systems, we estimate that the value of the global market for purchasing and installing
BWTS between 2010 and 2016 will be in the range of US$43 to $74 billion.
Ballast water treatment vendors will of course be competing with each other in this new global
market. However, they will also be competing against another factor: ship owners and operators
who choose not to comply with regulations, or who use various legal, political, and diplomatic
tools to delay compliance. Because the emerging global markets for BWTS will be regulation-
driven, the market information in this report includes descriptions of some significant
enforcement issues that will arise as the ballast water convention comes into force between now
and 2016 and will affect implementation and compliance. How these issues are addressed by
IMO member nations will have an enormous influence on the supply, demand, and price of
BWTS, and on the effectiveness of U.S. and IMO ballast water discharge restrictions.
The paper has four sections. Section 1 provides a preliminary profile of the global fleet of ships
that is likely to make up the market for BWTS. Section 2 summarizes our analysis of the cost of
acquiring and installing BWTS aboard “typical” ships in a variety of ship sizes and classes and
uses these representative costs and the number of ships in each ship class and the IMO tiered
compliance schedule. In Section 3, we develop a preliminary assessment of the value and
pattern of development of global BWTS markets. Section 4 describes some of the monitoring
and enforcement issues that will strongly influence when and how global BWTS markets will
evolve.