Tanker Jam Off Turkey as Price Cap on Russian Crude Kicks In
Dec 5 (Reuters) – Oil tankers formed a traffic jam off the coast of Turkey on day one of the West’s price cap on Russian crude, with Ankara insisting on new proof...
By Sean T. Pribyl (Holland & Knight) –
With President Joe Biden’s 100th-day milestone on April 30, 2021, the U.S. Coast Guard is holding a steady course on its expectations, including those related to environmental stewardship, innovation and cybersecurity. (See Holland & Knight Transportation’s previous article, “Steady as She Goes: Three Expectations for the Coast Guard Under the Biden Administration” from Jan. 8, 2021) In fact, emerging commercial opportunities in areas involving renewable energy, innovative and novel technologies, and alternate marine fuels have already come to surface in the first few months of the Biden Administration. In addition, pending bills on Capitol Hill with a maritime nexus will merit further engagement for stakeholders seeking to help shape future legislation while ensuring regulatory compliance.
As predicted, the tide has turned regarding the United States’ stance on sustainability and environmental matters. These issues now sit at the forefront of the Biden Administration’s agenda, and besides infrastructure discussions, net-zero emissions has emerged as a dominant topic in the president’s first 100 days. On his first day, President Biden reentered the United States in the Paris Agreement and then issued an Executive Order on Tackling the Climate Crisis at Home and Abroad. He next laid forth a $2 trillion plan for improving the nation’s infrastructure and shifting to greener energy over the next eight years, with $621 billion set for the transportation sector – including ports. Most recently, the White House announced that President Biden intends to reduce U.S. greenhouse gas (GHG) emissions by 50 percent to 52 percent – when compared to 2005 levels – by 2030. Relevant to the shipping sector, around 3 percent of all CO2 emissions worldwide are attributable to maritime shipping, and to its credit, the international shipping sector was the first sector to develop a globally binding climate agreement with the Energy Efficiency Design Index (EEDI), and the sector continues to employ a wide variety of technologies to continue to enhance operational efficiency. Now, President Biden has committed the U.S. to reducing emissions from international shipping by working with countries in the International Maritime Organization (IMO) to adopt a goal of achieving zero emissions from international shipping by 2050.
There is, however, no silver bullet to reaching industry and government zero-emission goals. For example, Special Presidential Envoy for Climate John Kerry recently announced that while the United States will join the international effort to achieve zero emissions by 2050 in the global shipping industry, the necessary technologies to decarbonize shipping need investment and they need to be scaled up. In fact, it remains likely that a combination of solutions and technologies must be developed in a phased approach. To develop novel zero emissions technology, however, the industry needs meaningful governmental investment. In support, several leading shipping organizations recently submitted a joint paper to the IMO proposing a $5 billion research and development fund to accelerate efforts using market-based mechanisms (MBMs) as a fair and viable policy option to transition to the new fuels and technologies needed to phase-out GHG emissions in the marine sector, further adding that the “decarbonisation of international shipping will depend on out-of-sector stakeholders developing market-available zero-carbon technologies and fuels” requiring “leadership and a properly coordinated approach.”
Thus, such approaches will spur novel marine uses, which will necessarily continue to involve relevant U.S. Coast Guard offices with oversight of design and engineering standards. It also provides an opportunity for the U.S. to take a leadership role domestically and at the IMO on clean energy technologies and initiatives, in particular as the pathways toward GHG emissions from ships need more tangible data, metrics and proven solutions. To this end, the U.S. will join discussions on action needed to support the Paris Agreement goals and the UN Framework Convention on Climate Change at the 26th UN Climate Change Conference of the Parties (COP26 summit) in Glasgow, Scotland, in November 2021. Furthermore, the U.S. Department of Energy announced that the U.S. will also co-lead a new research project with Denmark focused on decarbonizing international shipping. Reduction of GHG emissions from ships is also on the agenda at the IMO Marine Environment Protection Committee (MEPC) 76 session this June, and those meetings will be worth monitoring since sustainable climate and environmental goals must be based on rules and regulations imposed by the IMO and applicable worldwide in order to ensure a level playing field in compliance and enforcement, issues that fall under the Coast Guard’s rubric.
Additionally, U.S. offshore wind development is moving at breakneck speed with potential development expanding from the East Coast to the West Coast and Gulf of Mexico. As offshore wind permits are granted and new vessels are built to meet capacity demands, the Coast Guard will remain integral to U.S. offshore wind projects as a cooperating agency related to safe navigation and access routes, and through its oversight of vessels subject to Coast Guard regulations that support renewable energy installations. This additional industry activity could increase the burden on Coast Guard Headquarters’ units and field offices in areas such as field regulations, modernizing access routes and approvals of novel technologies. To ease some burden on discreet issues outside their legacy expertise, the Coast Guard could look to input from the National Navigation Safety Advisory Committee (NNAVSAC), National Offshore Safety Advisory Committee (NOSAC) and other industry bodies or subject matter experts for insight. Moreover, if novel vessel designs are developed to meet both capacity demands and zero emission goals, this could provide opportunities for industry stakeholders with relevant experience and capabilities to help shape future regulatory frameworks.
Innovation in the marine sector is as much about the potential for American leadership as it is about meeting aspirational goals. Discussions around innovation have permeated both President Biden’s presidency and the Coast Guard (as a regulator and user of emerging technologies), in particular as it relates to emerging alternate fuels for shipboard propulsion and advanced autonomy in the marine sector. In terms of innovative marine solutions, the U.S. House Committee on Transportation and Infrastructure’s Subcommittee on Coast Guard and Maritime Transportation recently held a hearing on “Practical Steps Toward a Carbon-Free Maritime Industry: Updates on Fuels, Ports, and Technology,” which emphasized the urgency of developing a U.S. market for innovative alternate fuel solutions and signaled the importance of integrating alternate fuels, such as liquefied natural gas,hydrogen or biofuels, into the possible solutions needed to reach emission reduction goals. Again, the Coast Guard has a role in regulatory oversight of emerging and novel vessel propulsion design and engineering, and will thus remain a critical player in U.S. innovation.
Another area of innovation that has progressed over the administration’s first 100 days is the continued emergence of advanced autonomy. While the regulatory agenda item Identifying Barriers to Autonomous Vessels remains in the pre-rule stage, U.S. Coast Guard Rear Adm. Richard Timme (Assistant Commandant for Prevention Policy) acknowledged at the recent 6th Biennial Marine Transportation System Innovative Science and Technology Conference: Advancing the Marine Transportation System through Automation and Autonomous Technologies that the Coast Guard has received nearly 400 comments to its Request for Information on Integration of Automated and Autonomous Commercial Vessels and Vessel Technologies into the Maritime Transportation System. The review and outcome of those comments will take some time, although there is undoubtedly more to come in this space. In particular, the Coast Guard awaits the updated results from the regulatory scoping exercise for the use of Maritime Autonomous Surface Ships (MASS) at the IMO Marine Safety Committee (MSC) 103 in May. In the meantime, commercial developers continue to explore possibilities with augmented navigation and advanced autonomy under the existing legal regime.
Furthermore, the Coast Guard recently announced in the Federal Register its intention to enter cooperative research and development agreements (CRADA) with companies to evaluate a detect and avoid (DAA) system to determine its potential use in a maritime environment to enable the Coast Guard to safely fly small Unmanned Aircraft System (sUAS) beyond visual line of sight (BVLOS). The Coast Guard intends to conduct flight testing and evaluations of sUAS under a wide variety of simulated but realistic and relevant real-world maritime operational scenarios, such as law enforcement, search and rescue, and maritime environmental responses. Comments, as well as synopses of proposals regarding future CRADAs, must reach the Coast Guard on or before May 27, 2021. (Author’s note: It remains encouraging to see the Coast Guard’s further development of advanced autonomy as recommended by the National Academy of Sciences (NAS) report titled Levering Unmanned Systems for Coast Guard Missions: A Strategic Imperative, to which the author served as a contributor.)
In this administration, maritime cybersecurity remains topical, and will likely continue to remain of vital importance. In the first 100 days, the only notable Coast Guard cybersecurity update comes in the form of minor additions to their Vessel Cyber Risk Management Work Instruction (CVC-WI-027(2)) on Feb. 18, 2021. That update specifies that vessel owners and operators who are required to maintain a Vessel Security Plan (VSP) have until Dec. 31, 2021, to implement measures to mitigate cyber-related vulnerabilities. Additionally, owners and operators have until Dec. 31, 2021, to address cybersecurity vulnerabilities within their Vessel Security Assessment (VSA). Cybersecurity in the maritime sector will only continue to grow in importance as part of overall and continuing infrastructure, port and vessel cyber threats, and maritime stakeholders should consider how they can achieve end-to-end cyber resilience.
The first 100 days of the Biden Administration have certainly provided guideposts to what the maritime sector should expect going forward, and the fact that the international shipping has specifically been included on the administration’s agenda is worth noting. In particular, areas involving the environment, sustainability and innovation may offer interested stakeholders opportunities for investment, grants and development of novel business cases. This is all the more relevant as the U.S. seems willing to seek leadership roles on the international stage and perhaps take steps to close the gap with European counterparts in these spaces through increased investment and industry support. To find out more about how these issues could affect your company, whether based domestically or internationally, contact the author, who will continue to work with stakeholders to shape relevant processes for the future.
More insight from Holland & Knight’s Transportation & Infrastructure Industry Sector Group can be found here.
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