Living for the Future

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The active exploitation of the global ocean gave birth to many environmental problems. All this has a direct impact on the Asia-Pacific region, where in recent years most countries have taken a course toward building a blue economy.

According to the World Bank, the blue economy is “sustainable use of ocean resources for economic growth, improved livelihoods, and jobs while preserving the health of the oceans’ ecosystem.” The ASEAN calls the ocean economy a universal approach that drives GDP growth and ensures the preservation of the environment.

Malaysia, uniquely positioned as a maritime nation, follows the path of building a blue economy today. The share of the ocean economy in the country’s GDP reaches 23%. The country’s maritime space is twice as large as its area. This includes the coastline, the exclusive economic zone, the continental shelf, the extended continental shelf, and 870 small islands.

The crisis phenomena in the country’s economy amid the COVID-19 pandemic forced authorities to take actions, and the so-called Twelfth Malaysia Plan 2021-2025 was adopted. According to this strategic document, ocean economy development is one of the country’s priority areas.

The following eight industries are considered to play a defining role in the Malaysian blue economy: fishing and aquaculture, marine tourism, mining, marine transportation and shipbuilding, renewable energy, waste management, marine biotechnology and water desalination.

Developing maritime traffic and ports is also among the priorities of the blue strategy, as the share of sea trade exceeds 90% of the total trade volume in the region. However, all actions in this area must also meet ecological and sustainable development requirements. Therefore, the country adopted the following legislative requirement: all vessels must comply with the Energy Efficiency Existing Ships Index (EEXI) and the Carbon Intensity Index (CII). In other words, ship owners now have to calculate how economically their ships consume fuel and how large their carbon footprint is, then, report on their progress in improving these indicators.

According to Dr Hanizah binti Idris, The University of Malaya Associate Professor, it is pivotal for Malaysia to manage maritime economy fields and resources in a sustainable way including by venturing into blue economy. Overall, Malaysia government is committed to promote green shipping and reduce its carbon footprint, in line with the requirement from the International Maritime Organisation, she adds.

The Northern Sea Route may be of interest within this framework. It is the shortest route between Central Russia and the Far East which serves as a link between Europe and Asia and can become an additional stable corridor. Thus, if we compare the NSR with the Southern Sea Route (SSR) via the Suez Canal, the distance from the port of Rotterdam (Netherlands) to the port of Yokohama (Japan) along the SSR is 11,205 nautical miles while using the NSR shortens it to 7,345 nautical miles. The route passes through the Arctic Ocean seas and partly through the Pacific Ocean.

Overall, the NSR looks quite appealing compared to the overcrowded, albeit more popular sea routes. Apart from being shorter, it saves time due to a lack of passage queues. There is also no risk of piracy along the route which is an undeniable advantage in terms of route security.

As Nikita Markov, Head of Logistics at Tazmar (a logistics company operating in Southeast Asia, particularly in Malaysia), mentions, the recent precedents have already revealed a number the Suez Canal weaknesses which come at a high cost for all global trade participants. The tense geopolitical situation in the Middle East among the countries neighbouring the Suez Canal does not exactly make this route more trustworthy. The northern route is currently free of the southern counterpart’s problems and will be able to show its competitive qualities in the future.

Since 2024, the European Union has been extending the Emissions Trading System (EU ETS), including to the maritime transportation industry. The new requirements may have a negative impact on the commercial efficiency of the shipping industry. But it is possible to save a significant amount on maritime emission payments by diversifying the logistics chain with shorter routes.

All in all, turning the NSR into a global logistics corridor may expand the possibilities of commodity exchange between Europe and Southeast Asia. If several developed trade routes are available, major maritime countries like Malaysia will find themselves in a more advantageous and secure position, as their dependence on force majeure situations and the current conditions, including political ones, will decrease.

For most of the year, the seas of the Arctic Ocean through which the route goes are covered with ice, and icebreaker support is required for the ships to pass. This service is organized by Rosatom (an infrastructure operator of the world’s only nuclear icebreaker fleet) which is responsible for many areas of NSR development – building icebreaking, hydrographic and rescue vessels, creating ports and digital services to improve navigation efficiency.

Getting back to ecology, it is worth noting that transporting goods via the NSR corresponds to Malaysia’s development of the blue economy. The operator is working together with Lomonosov Moscow State University Marine Research Centre (MSU MRC) to implement an environmental monitoring project in NSR waters.

Olga Konovalova, Head of the Scientific Research and Development Department at Lomonosov Moscow State University Marine Research Centre, explains that the project involves studies that cover all components of the environment to determine the impact of maritime traffic at all ecosystem levels by means of experimental methods, modern equipment, the development of digital services, and the best environmental practices.

One of the key priorities within project implementation is the ongoing interaction between the international expert community. As a part of this project, the International Expert Group (IGE) was established in 2021. And members of the Institute of Oceanology and Environment of the University Malaysia Terengganu take an active part in the IGE work. Malaysian scientists provide comprehensive recommendations for the Environmental Monitoring Program.

In the future, Malaysia intends to achieve sustainable use of the ocean. The country’s prospects in this area look positive as they imply the introduction of advanced technologies, active use of clean maritime transport, consumption of low-carbon fuels, and sustainable logistics.

Today, developing Malaysia’s blue economy requires governmental incentives such as green tax preferences, subsidies for advanced technologies, and research funding. The country’s connection to such additional sea routes as the Northern Sea Route which meets the Twelfth Plan criteria, will also contribute to the sustainability of the Malaysian economy. Using this route will make it possible to reduce the environmental burden on Malaysia and cut cargo transportation emissions.–THE MALAYA POST

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