recent final investment decision in the UK Teeside CCS project is generating, means there is no shortage of ship owners who see this as a real opportunity and orders have been made for a new type of vessel to carry captured carbon.
Artificial Intelligence (AI) AI technology is expected to have a big impact on ship management and trade, and it remains an area to watch in the year ahead.
With the increased regulatory focus on AI, those shipping companies looking to use AI applications in their business should carefully consider their compliance obligations in this respect. Shipping companies will need to consider, for example, the effect of the EU Artificial Intelligence Act and what steps they will need to take to comply with the complex regulatory requirements in the different jurisdictions in which they operate.
Onshore CCS
Carbon capture, utilization and storage is seen by many as an important technology to help mitigate greenhouse gas emissions from the use of fossil fuels in many land-based industries such as steel and cement making, power generation and other heavy users of power.
There has been much work on, and investment into, carbon capture technologies and CCSprojects, with Norway, the UK and other northern European countries working hard to exploit the storage potential of geological storage in the North Sea. These projects involve the permanent sequestering of captured CO2, with many looking to transport the captured carbon to depleted oil and gas fields. Whilst there are different options for transporting the captured CO2 to the store, pipeline seems to be the best option for many industrial hubs. However, for more isolated industrial centres, for instance SW England and South Wales, the transport of captured CO2 by ship is an attractive and perhaps the only commercially viable option. Due to cost, it seems that government support in one form or another, as well as a regulatory framework, is going to be necessary to develop and fully integrate shipping into these projects. However, the interest that projects such as Northern Lights and the
Notwithstanding this, this astonishing new technology offers tremendous opportunities for shipping companies to solve problems such as routeing, congestion avoidance, slow steaming and find other possible solutions to increase efficiency, increase profits, cut costs and reduce emissions.
Ship Recycling
There is much change on the horizon on the issue of ship recycling, with The Hong Kong Convention for the Safe and Environmentally Sound Recycling of Ships (HK Convention) entering into force on 26 June 2025. Once it is in force, the HK Convention will be applicable to any ship that is flagged in and any recycling yard which is located in a state which has ratified the HK Convention.
The HK Convention will require authorised ship recycling facilities to prepare a ship recycling facility plan covering issues such as safety and training and protecting human and environmental health. Each ship must also have a tailored ship recycling plan for each vessel before it is recycled, setting how it can be recycled safely. Shipowners will need to ensure that their recycling plans for the year ahead comply with the HK Convention.
The reaction of the EU to the coming into force of the HK Convention will be interesting. The EU Ship Recycling Regulation (EU SRR)
largely mirrors the requirements of the HK Convention, but the HK Convention does not have the oversight mechanism of the EU SRR. Consequently, the EU Commission does not see a need for the EU SRR to be aligned with the HK Convention, but rather they can continue as complimentary to each other.
However, the restricted list of ship recycling centres permitted under the EU SRR, which does not include the main SE Asian centres in India, Bangladesh and Pakistan, is a major challenge for EU shipowners. It remains to be seen whether the EU will be able to square its obligations under the Basel Convention and EU waste management regulations, which forbid EU waste being exported to developing countries, with expanding the EU SRR list to include SE Asian yards.
Failure to prevent fraud offence The UK’s new failure to prevent fraud offence (FTPF Offence) under the Economic Crime and Corporate Transparency Act 2023 (ECCTA) will come into force on 1 November 2025. Under the legislation, an organisation will be liable if it fails to prevent a specified fraud offence from being committed where: (i) an employee or agent commits the fraud; and (ii) the fraud is intended to benefit the organisation or a person to whom services are provided on behalf of the organisation.
There are, however, defences available to the offence if an organisation has “reasonable procedures” in place to prevent fraud. The practical effect of this is that organisations will need to carefully review and where necessary, update their anti-fraud systems and controls to cover fraud committed for their benefit by employees, subsidiaries or third-party agents.
The scope of the new FTPF Offence means that non-UK companies may be more likely to be caught by it than by the UK Bribery Act. As a result, both UK and non-UK shipping companies (and multinationals) with a UK nexus will need to consider how the new offence applies to them and to put appropriate anti-fraud procedures in order to manage the risks.
Sanctions
The level of new sanctions regulations released during 2024
56 | ISSUE 111 | MAR 2025 | THE REPORT
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