Beefing up emission and fuel standards in the Arctic

There is no clear definition of HFO but in general it can be said that HFO is a category of fuel oils with a particularly high viscosity and density, making it nearly "tar-like". HFO therefore behaves differently than other fuels when released into water. Spills of HFO are of particular concern in polar waters, as the biological weathering generally takes longer, the HFO may solidify and sink, get trapped under and in ice and transported over long distances, and clean-up is specially onerous in dark, cold and icy Arctic conditions. The oil will therefore remain in the environment for a long time and may have devastating and lasting effects.

The combustion of HFO additionally leads to some of the highest level of exhaust emissions of all marine fuels, including black carbon emissions, which when deposited in snow and ice reduces the surface albedo and contributes to so-called "Arctic amplification", a combination of feed-back processes speeding up the melting of sea-ice and creating warmer temperatures in the region. Even though HFO is not the most used fuel in the Arctic, the use of HFO is reported to have increased more than any other type of fuel in the region over the past few years.

While only recently agreed on, the draft amendments have already been heavily criticised for not being effective enough and offering too many wavers and exemptions. Apparently, the proposed IMO ban was not considered sufficient by the Norwegian government either, and not long before the new regulations were approved, the Norwegian Government put out on hearing national legislation which would ban all use of HFO in the waters surrounding Svalbard. It therefore remains to be seen exactly how strict the fuel standards in the Arctic will be, and the regulations may vary.

The Polar Code and current pollution standards

The International Code for Ships Operating in Polar Waters ("Polar Code") entered into force 1 January 2017. The Polar Code prescribes mandatory minimum standards and non-mandatory guidelines regarding safety and pollution prevention for vessels operating in both Arctic and Antarctic polar areas. The picture below illustrates the Polar Code's geographical scope in the Arctic.

The Polar Code was adopted through amendments to the International Convention on Safety of Life at Sea (SOLAS) and MARPOL and has a supplementary function to existing IMO instruments. That it has a supplementary function means inter alia that the new and stricter IMO regulations in MARPOL concerning the sulphur content of ships' fuel oil ("IMO 2020") also applies to vessels operating within the Polar Code's geographical scope. This is also the case for other IMO measures to fulfil the organisation's goal of a 50 % reduction in greenhouse gas emissions from international shipping compared to 2008 levels by no later than 2050.

Mandatory pollution measures are prescribed in Part II-A, which makes amendments to MARPOL annexes I, II, IV and V. Part II-A prohibits and regulates discharges into polar waters. Spread out in different MARPOL annexes, the Polar Code fixes a ban on “any discharge” of oil or oily mixtures (Annex I) and noxious liquid substances (Annex II) into the sea; prescribes operational requirements and prohibitions to prevent pollution by sewage from ships (Annex IV); and prohibits any garbage disposals, cargo residues and food waste in ice covered areas (Annex V).

The amendments to SOLAS prescribes new and stricter safety provisions for ships operating in Polar waters, including for equipment, design, construction, operation and manning.

The approved ban on heavy fuel oil in the Polar Code

Ever since HFO was banned for the carriage in bulk as cargo, use as ballast, or carriage and use as fuel in the Antarctic in 2011, a ban on HFO has been anticipated also in Arctic waters. Upon approval the Polar Code was therefore criticised for not prohibiting the use of heavy fuel oil (HFO) in the Arctic.

Part of the reason it took so long to adopt the new ban is because Canada and Russia have been fearing the impact on their energy supply to local communities and shipping of commodities. This also explains the Arctic HFO ban's current form, with exemptions and waivers that have been subjects to heavy criticism from environmentalist and the like ever since the first draft was released.

There are several aspects with the approved ban that leads to questions on its efficiency. Firstly, it only prohibits the "use and carriage" of HFO as "fuel" and not "the carriage in bulk as cargo [and] use as ballast", as the Antarctic ban additionally does. Secondly, it will only come into effect on 1 July 2024, which means that there will be a grace period of more than three years after what is expected to be its formally adoption.

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Further, it offers exemptions from the ban for certain newer vessels with a gap of at least 76 cm between the fuel tank and the outer hull of the ship. This gap – even though it may provide some protection – might nevertheless not prevent oil spills from happening, provided the damage is serious enough. These exemptions lasts until 1 July 2029.

Finally, states bordering Arctic waters have the opportunity to "waive the requirements of [the HFO regulation] for ships flying the flag of the Party while operating in waters subject to the sovereignty or jurisdiction of that Party" until 1 July 2029. In other words, according to the Polar Code's definition of Arctic waters, Canada, Denmark (through the courtesy of Greenland), Norway (because of Svalbard and Jan Mayen), Russia and the United States may waive the obligation to not carry or use HFO as fuel in their territorial seas and exclusive economic zones.

The exemptions and waivers are potentially substantial. As of now, it is primarily vessels with an Arctic flag that use HFO in the region – particularly Canadian and Russian flagged vessels – and it is likely that at least Russia will utilise the right to defer from the HFO regulation in the code. A study conducted by The International Council on Clean Transportation suggests that "had the proposed HFO ban been in place in 2019, exemptions and waivers would have allowed as much as 70% of HFO carriage and 84% of HFO use to remain in the Arctic" – making the ban potentially toothless for yet nearly another decade.

The proposed Norwegian ban of heavy fuel oil in waters around Svalbard

Norway on the other hand shows no desire to utilise the right to waive the Polar Code requirements in its waters. Simultaneously as environmentalists were heavily criticising the proposed Polar Code ban, the Norwegian government ceased the opportunity to put out on hearing a proposal for a full ban on HFO in the waters around Svalbard.

The proposal is an amendment to the Svalbard Environmental Protection Act ("SEPA"), which already bans the carriage and usage of HFO by all ships in the natural parks in Svalbard. The current ban is stricter than the one in the Polar Code as it also bans the use of hybrid oil (which may be as dangerous to the environment as heavy oil).

The new Norwegian proposal states that ships "calling at" the territorial sea around Svalbard shall not use or carry on board other petroleum based fuel than natural gas and marine gas oil. Marine gas oil and natural gas will be more closely defined by regulation. The ban – if passed by the Parliament – is expected to enter into force on 1 January 2022.

The proposal has been cheered by environmental organisations and the like for being a lot stricter than the Polar Code, as it prescribes a ban not only on traditional HFO but also on hybrid oil, in all of Svalbard's territorial sea and without any substantial waivers and exemptions, entering into force as early as 2022. The consultation paper for the proposal suggests that should the ban be put in place today, it would have had consequences for cruise vessels, bulk vessels, refrigerator ships, cargo ships and fishing vessels currently operating in the Svalbard region.

An expansion of the current SEPA ban seems reasonable. An oil spill does not follow borders, and a spill outside of the Svalbard natural parks might spread easily to these areas in need of particular protection. One might however question whether such a ban is in accordance with international law and in particular the right to "innocent passage" prescribed in UNCLOS art. 17. It is however likely that a ban for any vessel calling at a port or roadstead in Svalbard is lawful in accordance with principles of port state jurisdiction. Furthermore, based on the consultation paper it would appear that the use of the wording – "call at" – would mean that the ban would not apply to vessels performing innocent passage, continuous and expeditious through the territorial sea, cf. UNCLOS art. 19.

Concluding remarks

It is clear that developments related to emission and fuel standards in the Arctic have taken place lately. A ban on the use of HFO in the Arctic has been in the pipelines for a long time and will finally be adopted next year. Even though the IMO is beefing up its emission and fuel standards in the Arctic, with its waivers and exemptions it is clear that the ban is far from bullet proof. It remains to be seen if other states will follow Norway's lead and propose similar bans in their waters. This would ensure harmonisation of the standards in the region, which in turn would be to the benefit of both the environment and the predictability of the shipping industry.