the intertanko tonnage study as reflected in imo submission mepc 51/11/6 march 2004

The INTERTANKO Tonnage StudyThe INTERTANKO Tonnage Studyas reflected in as reflected in

IMO Submission MEPC IMO Submission MEPC 51/11/651/11/6

March 2004 March 2004

MARPOL Annex II Revisions MARPOL Annex II Revisions IMO Ship Type IMO Ship Type The INTERTANKO StudyThe INTERTANKO Study IMO Submission IMO Submission Next Step Next Step

MARPOL Annex II RevisionsMARPOL Annex II Revisions

MEPC 49 approved revised version of MEPC 49 approved revised version of MARPOL Annex II, final adoption is MARPOL Annex II, final adoption is intended to take place October 2004 intended to take place October 2004 (MEPC 52)(MEPC 52)

Will take effect 1 January 2007 at the Will take effect 1 January 2007 at the same time a new IBC/BCH code will same time a new IBC/BCH code will be issuedbe issued

Re-categorisation of the existing Re-categorisation of the existing pollution categories within MARPOL pollution categories within MARPOL Annex II has been a longstanding Annex II has been a longstanding issue at IMOissue at IMO

Currently there exist 5 categories A, Currently there exist 5 categories A, B, C, D and an Appendix III. (Appendix B, C, D and an Appendix III. (Appendix III lists products to which the IBC III lists products to which the IBC Code does not apply). Code does not apply).


Due to the re-evaluation process of Due to the re-evaluation process of the existing MARPOL Annex II the existing MARPOL Annex II products by GESAMP/GHS, existing products by GESAMP/GHS, existing products will be re-categorised into a products will be re-categorised into a new 3 or 5-category systemnew 3 or 5-category system



At MEPC 49 a 3 + 1 category system At MEPC 49 a 3 + 1 category system (X,Y,Z + OS) was agreed upon. The (X,Y,Z + OS) was agreed upon. The forth category holds only 8 harmless forth category holds only 8 harmless products (Apple juice, Clay slurry, products (Apple juice, Clay slurry, Coal slurry, Dextrose solution, Coal slurry, Dextrose solution, Glucose solution, Kaoline slurry, Glucose solution, Kaoline slurry, Molasses, Water)Molasses, Water)

Vegetable oils will be specified and Vegetable oils will be specified and are upgraded from Appendix III (of are upgraded from Appendix III (of the IBC Code) to Category Y and Zthe IBC Code) to Category Y and Z


Why will vegoils move?Why will vegoils move?

Flag states that have experienced Flag states that have experienced pollution from legal discharges of these pollution from legal discharges of these type substances on their shores type substances on their shores

INTERTANKO’s role has been to INTERTANKO’s role has been to monitor the proposals, keeping monitor the proposals, keeping members informed and ensure that members informed and ensure that practical solutions are sought whilst practical solutions are sought whilst ensuring that environmental protection ensuring that environmental protection remains a priorityremains a priority


Why will vegoils move?Why will vegoils move?

Products defined as "Floaters" and Products defined as "Floaters" and "Persistent floaters", which include the "Persistent floaters", which include the vegetable oils, will be assigned to vegetable oils, will be assigned to Category Y. Under the currently defined Category Y. Under the currently defined ship typing criteria this will mean they ship typing criteria this will mean they have to be carried in IMO Type 2 or 3 have to be carried in IMO Type 2 or 3 space. space.


Oil like substances will not exist (e.g Oil like substances will not exist (e.g xylene requires chemical code xylene requires chemical code certificate)certificate)

75 litre stripping required for all 75 litre stripping required for all tankers (Chemical Code/NLS) for tankers (Chemical Code/NLS) for keels laid after 1 January 2007 keels laid after 1 January 2007 (Existing IBC ships 100 litres XY- 350 (Existing IBC ships 100 litres XY- 350 litres Z, existing NLS as good as litres Z, existing NLS as good as possible)possible)

IMO Ship TypeIMO Ship Type

What is considered IMO Type Space?What is considered IMO Type Space?

The IBC Code provides standards for the The IBC Code provides standards for the construction of three types of chemical construction of three types of chemical tankers (Types 1, 2 and 3) tankers (Types 1, 2 and 3)

A Type 1 ship is a chemical tanker A Type 1 ship is a chemical tanker intended for the transportation of intended for the transportation of products considered to present the products considered to present the greatest overall hazard and Type 2 and greatest overall hazard and Type 2 and Type 3 for products of progressively Type 3 for products of progressively lesser hazardslesser hazards

Tank Type Tank Type ConfigurationsConfigurations


IMO Type 2 Space

A Type 2 tank is intended to transport products with appreciably severe environmental and safety hazards which require significant preventive measures to preclude escape of such cargo


IMO Type 2 Ship

Usually double-hull construction A wide variety of tank

sizes/capacities


IMO Type 2 Ship Some or all tanks of stainless

steel Nitrogen for use as a blanket to

exclude air from the tank when carrying cargoes prone to ignition at ambient temperatures


IMO Type 3IMO Type 3 Ship A Type 3 ship is a chemical tanker

intended to transport products with sufficiently severe environmental and safety hazards

Require a moderate degree of containment to increase survival capability in a damaged condition


IMO Type 3 Ship Those specified in the IMO IBC

Code for a Type 3 ship are usually not listed as "hazardous"

They are petroleum products, such as gasoil, naphtha, and gasoline, if equipped with an oil/water separator with a suitable transfer pump


IMO Type 3 Ship

Damage stability and cargo containment requirements for Type 3 ships detailed in the IMO IBC Code

Cargo handling and pollution prevention provisions of MARPOL Annex II

THE INTERTANKO StudyTHE INTERTANKO Study IMO BLG 8/6 Annex 6IMO BLG 8/6 Annex 6

IMO utilized BLG 8/6 Annex 6 to IMO utilized BLG 8/6 Annex 6 to study the impact of 3 and 5 category study the impact of 3 and 5 category sysytem on the vegertable oil tradesysytem on the vegertable oil trade

Industry asked that INTERTANKO Industry asked that INTERTANKO conduct an independent survey conduct an independent survey updating the information discussed updating the information discussed in this original studyin this original study

INTERTANKO StudyINTERTANKO Study IMO BLG 8/6 Annex 6IMO BLG 8/6 Annex 6

INTERTANKO used the same straight INTERTANKO used the same straight tonnage and demand parameters as used tonnage and demand parameters as used in BLG 8/6 Annex 6in BLG 8/6 Annex 6

During the course of the study it was During the course of the study it was evident that there existed a number of evident that there existed a number of considerations that needed to be taken considerations that needed to be taken in to account when examining the in to account when examining the capacity and demand avialable for the capacity and demand avialable for the transport of of certain products after 1 transport of of certain products after 1 January 2007January 2007

The INTERTANKO StudyThe INTERTANKO Study

Primary Elements Primary Elements Reclassification Reclassification World Trade Figures (Oil and World Trade Figures (Oil and

Chemical)Chemical) Type 2 Tonnage AvailabilityType 2 Tonnage Availability

The INTERTANKO Study Reclassification

MEPC/INF.24 - Consolidated List of GESAMP Hazard Profiles with Associated Pollution Categories and Ship Types), incorporating the provisional assessments made for vegetable oils in MEPC 49/11/4 (Outcome of GESAMP/EHS 39)

Ship Type Criteria - based on GESAMP hazard profiles in table 4.5.1 of Annex 7 to MEPC 51/11 (Criteria for Assigning Carriage Requirements from Products Subject to the IBC code).

Chemicals Current Proposed Current Proposed

Phenol C Y 2 2

Phosphoric Acid D Z £ N/A

Caustic Soda D Y 3 3

Sulphuric acid C Y 3 3

Styrene B Y 3 3

Benzene C Y 3 3

Toulene C Y 3 3

Cumene (Propylbenzene) A Y 3 3

Acetone III Z N/A N/A

Acetone III Z N/A N/A

Acetic Acid D Z 3 N/A

Methanol D Y N/A 3

Ethylene Glycol D Y N/A 3

Xylenes C Y 3 2

Acrylonitrile B Y 2 3

MTBE D Z N/A N/A

Urea Ammonia Nitrate Soln (UAN) C Y 3 2

Ethylene Dichloride (EDC) B Y 2 3

Big Movers – Chemicals Big Movers – Chemicals

Big Movers – Veg Oils & Big Movers – Veg Oils & Fats Fats

Vegetable Oils & Fats

Palm Oil D Y (P) N/A 2/3 (P)

Palm Kernal Oil D Y (P) N/A 2/3 (P)

Soyabean Oil D Y (P) N/A 2 (P)

Cottonseed Oil D Y (P) N/A 2/3 (P)

Groundnut Oil D Y (P) N/A 2 (P)

Sunflower Oil D Y (P) N/A 2 (P)

Rapeseed Oil D Y (P) N/A 2 (P)

Corn Oil D Y (P) N/A 2 (P)

Coconut Oil D Y (P) N/A 2 (P)

Olive Oil D Y (P) N/A 2 (P)

Castor Oil D Y (P) N/A 2 (P)

Linseed Oil D Y (P) N/A 2 (P)

Tallow D Y (P) N/A 2 (P)

Lard III Y (P) N/A 2/3 (P)

Fish Oil\ D Y (P) N/A 2 (P)

The INTERTANKO Study

Sources of World Trade Information Chemical World Trade figures – Drewry 2003 seaborne trade is based on 1998 actual figures with projections from 1998-2003 based on percentage change of organic, inorganic and other chemicals Vegetable Oil world trade figures - : ISTA Mielke, GmbH - Oil World. (95% of import figures considered as seaborne trade)

INTERTANKO Tonnage Survey

Type 2 Tonnage Study The fleet figures on IMO type 2 and 3 capacity are based on a collection of data on more than 1,100 ships operated by over 150 chemical and product tanker operators 0.55 multiplier utilized in BLG 8.6 when unable to utilize exact cargo tank information

INTERTANKO Tonnage Survey

Type 2 Tonnage Study

Data from Clarkson’s, Drewry, LR Fairplay Database and an exhaustive survey of world chemical fleet Until this study was completed Until this study was completed this type of data on ship type for this type of data on ship type for the majority of the worldwide the majority of the worldwide chemical fleet was not readily chemical fleet was not readily availableavailable

IMO 2 Tonnage SupplyIMO 2 Tonnage Supply

Deep Sea Tonnage (>=10,000 dwt)Deep Sea Tonnage (>=10,000 dwt)

0

500,000

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

3,500,000

4,000,000

4,500,000

5,000,000

P re-75 76-80 81-85 86-90 91-95 96-00 01-04

Type 3Dwt

Type 2Dwt

IMO Submission MEPC 51/11/6

Submission MEPC 51/11/6 reflects:

Surveyed over 1100 ships and over 150 owners/operators Calculated world trade figures using existing data

Also takes into account other considerations


Para 1 - Background 1.1 -Self Explanatory 1.2 - Purpose of the study and survey


Survey Data , Assumptions and Comments

Information on over 1100 ships asking for specific data on each ship in the survey.

Exact data on approximately 80 percent of the tonnage recorded.

INTERTANKO reviewed a number of models on voyages per year and decided upon an industry standard of 8 voyages per

year (realizing that the number can vary considerably considering the area trading, type of trade and vessel type and size. In an attempt to be as pragmatic as possible, a

conservative 20 percent slack was used.

Capacity 2007 – IMO type 2 tankersAssumes veg oils+ reclassified to IMO2/3

6 voy

6 voy

7 voy

7 voy

8 voy

8 voy

9 voy

9 voy10 voy

10 voy

1

2

3

4

5

6

7

10% 15% 18% 20% 23% 25%

dwt capacity type 2

Slackdwt capacity type 2

Capacity 2007 – IMO type 2 tankersAssumes all veg oils+ reclassified to IMO2

6 voy

6 voy

7 voy

7 voy

8 voy

8 voy

9 voy

9 voy

10 voy

10 voy.

-4

-3

-2

-1

0

1

2

3

4

10% 15% 18% 20% 23% 25%

dwt capacity type 2

Slack

dwt capacity type 2


Sources of Information Chemical World Trade Figures:

The only complete information readily available within our time frame was Drewry’s info. The last full study was completed in 1998. The projections are based on a an analysis of this data.


Sources of Information Vegetable Oil World Trade Figures

INTERTANKO scoured ISTA, Mielke - Oil World. Seaborne trade for this information which is estimated at 95 percent of the import figures


Sources of Information Big Movers

This table was created after seeking confirmation from IMO and therefore utilizes approved GESAMP data It is the most up to date information on product reclassification.


Tonnage Capacity Comments and

Conclusion

Explanation of the reclassification of products How much cargo will be reclassified for exclusive carriage in chemical tankers - 75 million tons 65 million tons will move from Annex I to Annex II Surplus of Type 2 and 3 tonnage


Other Considerations

INTERTANKO conducted a straight supply and demand analysis but documents do take into account the following:

Time charter versus voyage charter considerations Specific carriage requirements for many different cargoes Trade route considerations Accelerated phase out and its effects


Other Considerations (Continued)

Tank coatings, stripping limits and requirements Last cargo requirements ( banned or acceptable) The use of vegoils as part of triangular trade


Results of the Tonnage Availability Study

Supply

Item 1 - The numbers that we collected in our study Item 2 - Percent increase takes into account the phasing out of older tonnage This is considered a conservative estimate.


Demand Alternative Big Movers Fats, Veg oils that will be reclassified

Item 3

Currently out of the big movers table - the following products are required to be carried in certain space

Item 4

A total of other organic and inorganic chemicals


Demand Alternative All Big Movers Fats, Veg oils that will be reclassified

Item 5 - Total seaborne trade 2003

Item 6 - This uses the big movers estimates and applies this to the reclassification table for 2007

Item 7 - A total of other organic and inorganic chemicals


Demand Alternative All Big Movers Fats, Veg oils that will be reclassified

Item 8 - Total Seaborne Trade estimated for 2007

Item 9 - This uses the big and small movers estimates and applies this to the reclassification table for 2007

IMO Submission MEPC 51/11/6Supply/Demand Alternative 1

Representing the reclassification of all Big Movers vegetables & fats to Type 2

Item 10 - tonnage requirement using average of 8 voyages per tanker per year

Item 11 - increased requirement after reclassification using average of 8 voyages per tanker per year

Item 12 - additional 20 percent slack added to tonnage estimates

Item 13 - Sum of line items 10-12-13

Item 14 - Tonnage Differential + .4 tons Type 2 and + 5.3 tons type 3


Demand Alternative 2 (This adds in the veg oil products that may move up to Type 2

Item 16 - These products are required to be carried in certain space Type 2 - Acrylo, EDC and Phenol - Totalling 4.4 m tons

Item 17 – A total of other organic and inorganic chemicals

Item 18 - Total seaborne trade 2003


Demand Alternative 2 veg oil products that may move up to Type 2

Item 19 - This uses the big movers estimates and applies this to the reclassification table for 2007

Item 20 - A total of other organic and inorganic chemicals

Item 21 - Total Seaborne Trade estimated for 2007

Item 22 - This uses the big and small movers estimates and applies this to the reclassification table for 2007


Supply/Demand Alternative 2

Representing the reclassification of all Big Movers vegetables & fats to

Type 2

Item 24 - tonnage requirement using average of 8 voyages per tanker per year

Item 25 - increased requirement after reclassification using average of 8 voyages per tanker per year


Supply/Demand Alternative 2

Representing the reclassification of all Big Movers vegetables & fats to Type 2

Item 26 - additional 20 percent slack added to tonnage estimates

Item 27 - Sum of line items 24-25-26

Item 28 - Tonnage Differential + 4.2 m. tons Type 2 and + 1.5 tons type 3


The chemical tanker fleet (Type1,2,3) will collectively have exclusive access to 75 million tonnes of cargo in 2007 annually from 2007. The Annex I tanker fleet will lose access to about 65 m tonnes of Annex II cargo from 2007. Conclusion - nominal surplus of type 2 and type 3 tonnage from 2007.

MARPOL ANNEX II REVISIONSMARPOL ANNEX II REVISIONS

INTERTANKO Position RemainsINTERTANKO Position Remains

AA new 3-category (X,Y,Z) system will new 3-category (X,Y,Z) system will be simpler for industry, and simpler to be simpler for industry, and simpler to implement by Port State Control. implement by Port State Control.

The reclassification (in accordance The reclassification (in accordance with GESAMP) will be applied to with GESAMP) will be applied to either a 3 or 5 system is in place. either a 3 or 5 system is in place.

What do product tankers carry What do product tankers carry now now

(before 1 January 2007)(before 1 January 2007) Clean Petroleum Products Clean Petroleum Products Oil like substances (e.g. Oil like substances (e.g.

Cyclohexane, hexane, pentane, Cyclohexane, hexane, pentane, toluene, xylene)toluene, xylene)

Unregulated chemicals (e.g. Unregulated chemicals (e.g. Acetone, ethanol, fatty acid, slurry, Acetone, ethanol, fatty acid, slurry, latex, molasse, wax, vegoils, water) latex, molasse, wax, vegoils, water)

What will the product tankers be What will the product tankers be able to carry after 1 January 2007able to carry after 1 January 2007

CPP (CPP)CPP (CPP) OS (other substances – the 8 OS (other substances – the 8

harmless products listed on slide harmless products listed on slide 5)5)

Summary consequences for product Summary consequences for product tankerstankers

2003 2004 2005 2006 2007

EU

IMO

Rev Annex II

Phaseout SHT in EU ports andflying EU flagg, no dirty oils

Accelerated outphasing of SHT

World wide

No retirementin Oil like

substances andVegoil trade

Next Step Next Step

The information submitted as The information submitted as part of the INTERTANKO study part of the INTERTANKO study (including the consideration and (including the consideration and assumptions made) will be taken assumptions made) will be taken under consideration at MEPC 51under consideration at MEPC 51

All involved may be asked to All involved may be asked to contribute to and examine the contribute to and examine the availability of tonnage for the veg availability of tonnage for the veg oil industry after 2007oil industry after 2007

Next Step Next Step

MEPC 51 will deal with many MEPC 51 will deal with many issues including MARPOL Annex issues including MARPOL Annex IIII

INTERTANKO has been the sole INTERTANKO has been the sole submission on the issue of Type submission on the issue of Type II tonnage . II tonnage .

It is expected that the issue will It is expected that the issue will be discussed in plenary session be discussed in plenary session at MEPC 51 at MEPC 51

the intertanko tonnage study as reflected in imo submission mepc 51/11/6 march 2004

Documents