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Arctic Maritime Transport Arctic Maritime Transport Background Paper prepared by the Arctic Centre of the University of Lapland for the ‘Arctic Maritime Transport’ workshop, a part of the EU-Circumpolar Arctic Dialogue Seminar, Brussels, 29 November 2018 This background paper is meant to inspire discussion among participants. It constitutes a starting point rather than establishes the boundaries of dialogue within the workshop. This paper was drafted by the contractor in the EU Arctic Policy Assessment contract. As such, the ideas presented in this material do not necessarily represent the views of the European Union. Photo: SCF THIS WORKSHOP The Arctic maritime transport workshop is dedicated to better understanding the current dynamics in Arctic maritime transport. A decade ago, some experts were predicting rapid expansion of Arctic shipping. While volumes of destinational shipping have been rising significantly in recent years, fueled primarily by exports of hydrocarbon resources from the Russian Arctic, transit shipping has been limited. The level of uncertainty and risk is high in Arctic shipping, notwithstanding technological and regulatory developments (primarily the Polar Code). This workshop will try to clarify the future prospects for Arctic shipping. Participants will discuss whether policymakers should take actions to make Arctic shipping more economically feasible, while at the same time enhancing the safety and environmental performance of Arctic maritime transport. KEY QUESTIONS (depending on time and discussion dynamics, some questions may be unaddressed) • How can we best estimate future volumes and movements for different types of shipping (destinational and transit, container and bulk – energy and other goods)? • What are the tangible benefits of Arctic shipping routes for Europe? How can Europe seize opportunities arising from the potential expansion of the Arctic shipping routes? • What is the current and future role of insurance companies in Arctic shipping developments? • What are the impacts of increased shipping volumes and infrastructural developments on Arctic Indigenous communities, and how can they benefit from the increased shipping activities? • Does the EU need an active policy on Arctic maritime transport, in view of possible future developments (including for example Chinese interests), or should the EU currently limit its actions to observing the situation and react only when the time comes? The key questions are proposed by the contractor (Arctic Centre), following the consultation with EU officials, and partly building on the issues and questions mentioned by participants upon registration. OVERVIEW Organization (IMO) has adopted numerous Different types of shipping activities in the Arctic convention and guidelines, including the MARPOL can be distinguished: (maritime pollution from ships), SOLAS (safety of • Transit shipping between Europe and Asia; life at sea) and STWC (training, certification and • Destinational Arctic shipping – exports of Arctic watch-keeping for seafarers) conventions. The resources to global markets and bringing of good to earlier voluntary Polar Code has been largely Arctic communities and projects. transposed into legally-binding rules under • Internal Arctic transport – traffic between Arctic MARPOL, SOLAS and the STWC. Currently, the IMO ports, e.g. cruise tourism operations and fisheries. discusses the use of heavy fuel oil (HFO) in the Arctic. Other international conventions are also There are three passages linking Pacific and relevant for the Arctic shipping, for example the Atlantic Oceans, which are often considered in the International Convention for the Control and assessment of future Arctic shipping: Management of Ships' Ballast Water and • Northeast Passage / Northern Sea Route (NSR Sediments, which entered into force in 2017. extends between Novaya Zemlya and Bering Strait) along Siberian coast. Due to climate and ice The Arctic Council and its Protection of Arctic conditions, the NSR is at present the most navigable Marine Environment working group (PAME) Arctic route. It was used extensively already during worked on the marine transport, including the 2009 the Soviet Union era. Some search and rescue (SAR) Arctic Marine Shipping Assessment (AMSA) and its infrastructure is available, with plans for further follow-up process. expansion. The shipping volumes in the NSR are RELEVANT EUROPEAN UNION (EU) POLICIES growing dynamically owing primarily to the exports of hydrocarbons from Yamal peninsula In its 2016 Joint Communication on an integrated (destinational shipping). Russia promotes the NSR EU policy for the Arctic, the EU highlighted its commitment to contributing to the safety of Arctic as an international shipping route, although navigation, particularly through innovative recently there have been actions towards placing technologies and enhanced monitoring capabilities. restrictions on the movement of foreign vessels. The EU satellite programmes, in particular Galileo, • Northwest Passage (NWP) crosses Canadian may play here a role. The EU declares its support for Arctic archipelago. Compared to the NSR, the NWP international efforts to implement the Polar Code has more challenging ice conditions. At present, and other relevant IMO conventions and guidelines. there are also limited economic activities that could The EU is also willing to share European best generate major destinational shipping volumes. practices, where applicable. • Central Arctic Ocean / Polar Route would cross The EU Joint Communication on international CAO international waters. This route will be ocean governance (JOIN(2016) 49 final), among operable, if the Arctic Ocean is largely ice-free. others, calls for promoting the establishment of marine protected areas in the Arctic. Challenges for shipping are multifaceted, including: • Difficult navigational, ice and weather The EU adopted an Integrated Maritime Policy conditions, despite diminishing sea ice cover. (IMP) in 2007, which considers the Arctic Ocean as • Insufficient infrastructure/communications. one of the sea basins of concern for the EU. • High costs of Arctic shipping, partly discounting The EU is not an IMO member, but the Commission gains in terms of distance and time compared to the and the European Maritime Safety Agency (EMSA) main southern shipping lanes. coordinate positions with the EU Member States. • Environmental impacts: emissions (CO2, NOx, The EU has developed SafeSeaNet and CleanSeaNet SOx, methane), discharges, accidents, invasive networks and given practical support to IMO species, wildlife disturbance. initiatives. The EU also operates the European Marine Observation and Data Network (EMODnet). Governance of Arctic shipping activities is done to a great extent at the international/global level. The As some of the vessels crossing Arctic waters call UN Convention on the Law of the Sea as well as the (and will in the future) at European ports, the EU legislation on port state control is of relevance also customary law of the sea establish a general for Arctic shipping. framework. The International Maritime Arctic Maritime Transport – Background Paper – Circumpolar Arctic Dialogue Seminar – 29.11.2018 ANNEX: decade, creating conditions for future shipping expansion. However, multiple constraints and EXTENDED BACKGROUND challenges make predictions of future shipping INFORMATION difficult. Arctic passages The interest in Arctic shipping arises from The Northeast Passage (NEP) links northern the impacts of climate change on the Arctic Europe and Asia via the Eurasian part of the Ocean ice cover, extent of which has been Arctic Ocean. The major part of its Russian diminishing, with thinner and younger sea ice section is referred to as the Northern Sea occurring across the Arctic Ocean. That Route (NSR) and is subject to special Russian translates to gradual extension of navigational legislative framework (2012 Law on the NSR). period and lower costs, for instance, for The NSR is the most used Arctic shipping route, icebreaking assistance. due to comparatively mild ice conditions and the longest navigable period. In 2017, almost The Arctic shipping routes may in the future 10 mln tonnes of cargo was shipped in the NSR prove potentially attractive alternatives to the (compared to 7,3 mln in 2016 and 5.4 mln in main shipping lanes via Suez and Panama 2015), with exports of Russian LNG the key canals, in particular between the northern factor in growth of volumes, while transit ports of East Asia and northern Europe. The shipping has had minor importance. 1 The Arctic shipping lanes can be also seen by states Russian government promotes the use of the and companies as security alternatives in case route and has been investing – albeit with the traffic on the main southern shipping lanes multiyear delays – in the search and rescue is disrupted, due to for instance military infrastructure (e.g. between 2013 and 2016, conflicts or piracy. However, so far the increase four SAR centres were opened in Murmansk, in volumes has been generated primarily by Arkhangelsk, Dudinka, and Naryan-Mar; new the export of Arctic hydrocarbon resources to SAR centres are planned in Pevek and Anadyr global markets. in Chukotka, as well as in Tuksi in Yakutia). However, at the same time, there are plans to The increase in Arctic shipping would translate restrict the access to the NSR to Russian- to demand for the construction of polar class flagged and Russian-built vessels from 2019, vessels, compliant with the standards with the aim to support
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