Navigating the New Fuel Restriction Laws on Arctic Shipping

Starting July 1^st, ships passing through the Arctic can no longer operate using Heavy Fuel Oil (HFO). HFO is a by-product of the oil refinery process that has a tar-like consistency. It is up to 30% cheaper than alternative fuels and accounts for about 80% of marine fuel in global shipping. As HFO is highly viscous and persistent in cold water, this makes spills particularly hazardous for the sensitive environment of the Arctic. Oil spills are challenging to clean up due to the region's harsh conditions, remoteness and lack of infrastructure. The ban against HFO was adopted in 2021 and is set to be implemented in phases, starting in 2024 with full enforcement expected by 2029.

Background and Implementation

The Arctic is warming at more than twice the global average rate. Since 1971, Arctic surface temperatures have risen by approximately 3°C (5.4°F) compared to a global increase of 1°C (1.8°F). The region has also lost about 95% of its oldest and thickest ice over the past 40 years. This significant decline in the extent of the sea ice contributes to rising sea levels and loss of habitat for wildlife including endangered species like Walrus, Polar bears and Whales. For decades, environmental activists have warned that HFO emits higher levels of incomplete combustion products filled with Black Carbon, also known as soot. Black Carbon is very effective at absorbing sunlight and thus heats its locality and surrounding atmosphere. When it settles on ice and snow, it reduces their albedo (reflectivity), causing them to absorb more heat and melt faster. The Arctic receives about 8% of the global ship-related black carbon emissions, which significantly accelerates the ice melting.

During the 2021 Marine Environment Protection Committee (MEPC) virtual session of the UN's International Maritime Organization (IMO), the organisation approved the ban on the use and transportation of HFO by ships passing through the Arctic. Though it came into full force for most vessels in 2024, certain exemptions and waivers will allow ships from Arctic coastal states like Canada, Denmark, Norway, Finland and The United States to continue using HFO until 2029. This decision has drawn criticism from environmental groups who argue that the exemption undermines the effectiveness of the ban.

Implications for Arctic Shipping

The implementation of stricter fuel requirements will necessitate shipping companies to modify their traditional routes. This is due to the availability of compliant fuel types which may not be as widespread, requiring vessels to plan stops differently to refuel with approved fuels. Some stakeholders in the industry have raised concerns about the economic implications, particularly for vessels that may have to retrofit their systems to comply with the new standards. On the other hand, environmental organisations argue that the measures do not go far enough and have been vocal about the need for stricter regulations without exemptions, emphasising the urgency given the rapid environmental changes occurring in the Arctic.

Environmental Impact

The new regulation aims to mitigate the severe environmental risks posed by HFO, which is not only more likely to cause extensive damage if spilled but also contributes significantly to Black Carbon emissions. The shift to cleaner fuel alternatives is expected to decrease the levels of Sulphur Oxides and Black Carbon emitted by ships. Sulphur Oxides are notorious for contributing to acid rain, which can damage ecosystems and marine life. Black Carbon, when deposited on Arctic ice, accelerates melting by increasing the absorption of heat on the ice's surface. The reduction in these pollutants is crucial for protecting the Arctic's fragile ecosystems and can contribute to slowing down the ice melt rates, which is vital for maintaining global climate stability.

Related Article: What is Happening to Our Polar Ice?

Challenges in Enforcement

Despite the clear environmental benefits, the enforcement of this new regulation poses significant challenges. Monitoring and ensuring compliance across the vast and remote Arctic region require substantial resources and international cooperation. The effectiveness of this law depends on the ability of authorities to enforce them consistently and to penalise non-compliance effectively.

Concerns have also been raised about potential abuse of the waiver by nations permitted to grant it, with a report by Reuters finding that more than half of the ship that passed through Arctic waters in 2019 could qualify for a waiver under the new law. Environmental groups have also pointed out that though majority of the nations that can grant waivers have indicated their intention to enforce the ban, Russia, which controls more than half of the Arctic coastal line, has not yet confirmed its commitment to the ban.

The Bottom Line

As the IMO's regulations begin to take effect, stakeholders in the Arctic shipping industry will need to navigate the balance between compliance and operational efficiency. This period will also likely see advancements in cleaner marine fuel technologies and increased international cooperation to protect one of the planet's most vulnerable ecosystems.