The INTERTANKO Tonnage Study as reflected in IMO Submission MEPC 51/11/6 March 2004

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

MARPOL Annex II Revisions  MEPC 49 approved revised version of MARPOL Annex II, final adoption is intended to take place October 2004 (MEPC 52)  Will take effect 1 January 2007 at the same time a new IBC/BCH code will be issued

 Re-categorisation of the existing pollution categories within MARPOL Annex II has been a longstanding issue at IMO  Currently there exist 5 categories A, B, C, D and an Appendix III. (Appendix III lists products to which the IBC Code does not apply). MARPOL Annex II Revisions

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

 At MEPC 49 a category system (X,Y,Z + OS) was agreed upon. The forth category holds only 8 harmless products (Apple juice, Clay slurry, Coal slurry, Dextrose solution, Glucose solution, Kaoline slurry, Molasses, Water)  Vegetable oils will be specified and are upgraded from Appendix III (of the IBC Code) to Category Y and Z

MARPOL Annex II Revisions Why will vegoils move?  Flag states that have experienced pollution from legal discharges of these type substances on their shores  INTERTANKO’s role has been to monitor the proposals, keeping members informed and ensure that practical solutions are sought whilst ensuring that environmental protection remains a priority

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

MARPOL Annex II Revisions  Oil like substances will not exist (e.g xylene requires chemical code certificate)  75 litre stripping required for all tankers (Chemical Code/NLS) for keels laid after 1 January 2007 (Existing IBC ships 100 litres XY- 350 litres Z, existing NLS as good as possible)

IMO Ship Type What is considered IMO Type Space?  The IBC Code provides standards for the construction of three types of chemical tankers (Types 1, 2 and 3)  A Type 1 ship is a chemical tanker intended for the transportation of products considered to present the greatest overall hazard and Type 2 and Type 3 for products of progressively lesser hazards

Tank Type Configurations

IMO Ship Type 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 Ship Type IMO Type 2 Ship   Usually double-hull construction   A wide variety of tank sizes/capacities

IMO Ship Type 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 Ship Type IMO Type 3 IMO 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 Ship Type 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 Ship Type 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 Study IMO BLG 8/6 Annex 6  IMO utilized BLG 8/6 Annex 6 to study the impact of 3 and 5 category sysytem on the vegertable oil trade  Industry asked that INTERTANKO conduct an independent survey updating the information discussed in this original study

INTERTANKO Study IMO BLG 8/6 Annex 6  INTERTANKO used the same straight tonnage and demand parameters as used in BLG 8/6 Annex 6  During the course of the study it was evident that there existed a number of considerations that needed to be taken in to account when examining the capacity and demand avialable for the transport of of certain products after 1 January 2007

The INTERTANKO Study Primary Elements  Reclassification  World Trade Figures (Oil and Chemical)  Type 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 of Annex 7 to MEPC 51/11 (Criteria for Assigning Carriage Requirements from Products Subject to the IBC code).

ChemicalsCurrentProposedCurrentProposed PhenolCY22 Phosphoric AcidDZ£N/A Caustic SodaDY33 Sulphuric acidCY33 StyreneBY33 BenzeneCY33 TouleneCY33 Cumene (Propylbenzene)AY33 AcetoneIIIZN/A AcetoneIIIZN/A Acetic AcidDZ3N/A MethanolDYN/A3 Ethylene GlycolDYN/A3 XylenesCY32 AcrylonitrileBY23 MTBEDZN/A Urea Ammonia Nitrate Soln (UAN)CY32 Ethylene Dichloride (EDC)BY23 Big Movers – Chemicals

Big Movers – Veg Oils & Fats Vegetable Oils & Fats Palm OilDY (P)N/A2/3 (P) Palm Kernal OilDY (P)N/A2/3 (P) Soyabean OilDY (P)N/A2 (P) Cottonseed OilDY (P)N/A2/3 (P) Groundnut OilDY (P)N/A2 (P) Sunflower OilDY (P)N/A2 (P) Rapeseed OilDY (P)N/A2 (P) Corn OilDY (P)N/A2 (P) Coconut OilDY (P)N/A2 (P) Olive OilDY (P)N/A2 (P) Castor OilDY (P)N/A2 (P) Linseed OilDY (P)N/A2 (P) TallowDY (P)N/A2 (P) LardIIIY (P)N/A2/3 (P) Fish Oil\DY (P)N/A2 (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 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 this type of data on ship type for the majority of the worldwide chemical fleet was not readily available

IMO 2 Tonnage Supply Deep Sea Tonnage (>=10,000 dwt)

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

IMO Submission MEPC 51/11/6 Para 1 - Background 1.1 -Self Explanatory Purpose of the study and survey

IMO Submission MEPC 51/11/6 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 tankers Assumes veg oils+ reclassified to IMO2/3

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

IMO Submission MEPC 51/11/6 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 The projections are based on a an analysis of this data.

IMO Submission MEPC 51/11/6 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

IMO Submission MEPC 51/11/6 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.

IMO Submission MEPC 51/11/6 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

IMO Submission MEPC 51/11/6 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

IMO Submission MEPC 51/11/6 Other Considerations (Continued) Tank coatings, stripping limits and requirements Last cargo requirements ( banned or acceptable) The use of vegoils as part of triangular trade

IMO Submission MEPC 51/11/6 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.

IMO Submission MEPC 51/11/6 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

IMO Submission MEPC 51/11/6 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

IMO Submission MEPC 51/11/6 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 51/11/6 Supply/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 Item 14 - Tonnage Differential +.4 tons Type 2 and tons type 3

IMO Submission MEPC 51/11/6 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

IMO Submission MEPC 51/11/6 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

IMO Submission MEPC 51/11/6 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

IMO Submission MEPC 51/11/6 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 Item 28 - Tonnage Differential m. tons Type 2 and tons type 3

IMO Submission MEPC 51/11/6   The chemical tanker fleet (Type1,2,3) will collectively have exclusive access to 75 million tonnes of cargo in 2007 annually from   The Annex I tanker fleet will lose access to about 65 m tonnes of Annex II cargo from   Conclusion - nominal surplus of type 2 and type 3 tonnage from 2007.

MARPOL ANNEX II REVISIONS INTERTANKO Position Remains  A new 3-category (X,Y,Z) system will be simpler for industry, and simpler to implement by Port State Control.  The reclassification (in accordance with GESAMP) will be applied to either a 3 or 5 system is in place.

What do product tankers carry now (before 1 January 2007)  Clean Petroleum Products  Oil like substances (e.g. Cyclohexane, hexane, pentane, toluene, xylene)  Unregulated chemicals (e.g. Acetone, ethanol, fatty acid, slurry, latex, molasse, wax, vegoils, water)

What will the product tankers be able to carry after 1 January 2007  CPP (CPP)  OS (other substances – the 8 harmless products listed on slide 5)

What will the product tankers be able to carry after 1 January 2007  CPP (CPP)  OS (other substances – the 8 harmless products listed on slide 5)

Summary consequences for product tankers EU IMO Rev Annex II Phaseout SHT in EU ports and flying EU flagg, no dirty oils Accelerated outphasing of SHT World wide No retirement in Oil like substances and Vegoil trade

Next Step  The information submitted as part of the INTERTANKO study (including the consideration and assumptions made) will be taken under consideration at MEPC 51  All involved may be asked to contribute to and examine the availability of tonnage for the veg oil industry after 2007

Next Step  MEPC 51 will deal with many issues including MARPOL Annex II  INTERTANKO has been the sole submission on the issue of Type II tonnage.  It is expected that the issue will be discussed in plenary session at MEPC 51