BioLargo, Inc. (OTCQB:BLGO) is a cleantech and life sciences innovator and engineering services solution provider. Our core products address PFAS contamination, achieve advanced water and wastewater treatment, control odor and VOCs, improve air quality, and control infections and infectious disease. Our approach is to invent or acquire novel technologies, develop them into product offerings, and extend their commercial reach through licensing and channel partnerships to maximize their impact.
Monday, 17 October 2016
Ballast Water Regulatory Enforcement Delayed ... Again! - Update to Article: Why BioLargo’s “Lowest Energy Highest Impact” Water Treatment System Will “Clean Up” In $50 Billion Ballast Water Treatment Race
Sometimes the wisest decision is to do nothing!
“The fool strikes. The wise man smiles, and watches, and learns. Then strikes.”
― Joe Abercrombie, Half a King The Ballast Water Treatment initiative is rich in lessons for any company looking to find a market that depends on a regulatory action to create demand!
BioLargo wisely tested these waters and elected to stand on the sidelines as fortunes were lost by companies that jumped too soon. The delays continue 5 years later as enforcement has been pushed another decade to 2030! That's right- 2030.
October 2019 Update to Original Article
California delays [again] ballast water treatment standard
2020 was meant to be the start date for the California Marine Invasive Species Act (MISA), which would have required a stricter standard of ballast water treatment than that sought by IMO or the USCG. Implementation of the Act has now been delayed until 2030
The California Marine Invasive Species Act (MISA) is to be implemented in two parts: an interim standard and a final performance standard. The final performance standard calls for zero detectable living organisms. This is a standard higher than that of IMO and beyond that required by the USCG.
The California State Lands Commission, the enforcer of the regulation in California, has recognised that the standards are unachievable with the currently available technology.It was for this reason that in October 2015, California delayed implementing its interim ballast water discharge standards by four years, from 1 January 2016 to 1 January 2020, because of the lack of available treatment technologies.
To the surprise of no one in the ballast water treatment technology industry, the implementation of MISA has been delayed again. In early October California’s governor, Gavin Newsom, signed a bill to delay MISA. The bill, Assembly Bill (AB) 91, delays implementation of the California interim and final ballast water discharge performance standards until 1 January 2030, and 1 January 2040, respectively. The bill itself states that no ballast water treatment technologies were available to meet the standards. The bill incorporates that an assessment of the technology must be made 18 months before the new implementation dates.
Instead, the bill mandates that from 1 January 2020 California is to adopt regulations that require owners and operators of vessels arriving at California ports to comply with the USCG ballast water discharge performance standards.
One concession in the bill was to decrease the distance that vessels must put out to sea to facilitate ballast water exchange. The bill changes the definition of the Pacific Coast of North America to: “east of 154º W longitude and north of 20º N latitude, inclusive of the Gulf of California.”
The bill also allows sampling of ballast water and biofouling for research purposes, as well as compliance purposes.
IMO's hesitance in ballast water takes toll on suppliers
A few weeks from now the IMO will decide when carriers must install ballast water management systems. Ahead of the key MEPC meeting, uncertainty among suppliers has only grown, and Norway's Optimarin has already had to lower its full-year guidance.
Nervousness about how the market for ballast water management systems will develop is increasing ahead of a decisive IMO meeting to be held in early July.
At the meeting of the IMO's Marine Environment Protection Committee (MEPC), the plan is to determine when shipowners must install ballast water management systems. And while there was a degree of uncertainty among suppliers earlier this year, this uncertainty has since then grown considerably, as there is now much to indicate that the implementation schedule could be pushed back two years. And this has made carriers hesitant to invest in the systems.
CEO Tore Andersen expected earlier this year that Optimarin could more than double its revenue from last year of NOK 100 million (USD 11.8 million). These expectations have now been changed - due to factors such as the proposed schedule change to be discussed at the IMO.
"We will not experience the success we were hoping for this year. We've received many inquiries, but more and more carriers are postponing installation of the systems. But we'll survive and will most likely make money, though much less than we'd hoped for. It's not looking bad, but things are moving too slowly," says Andersen, adding that Optimarin has received around 30 orders in 2017.
Hoping and praying
The company feels fairly well-equipped for the future, as it is one of only four companies globally to have its ballast water management system approved by the US Coast Guard.
Original 2016 Article Below:
In order to halt the worldwide spread of invasive harmful marine species, the International Maritime Organization (IMO) has officially mandated more than 65,000 ships (over 400 gross tons) to install approved ballast water treatment systems. The American Bureau of Shipping (ABS) reports that the IMO Marine Environment Protection Committee will meet in October to finalize the new law.
After years of the IMO pushing for the new requirements, ship operators and owners will now have until September 8, 2017, to comply with the new regulations. The new regulations will be enforced by blocking non-compliant ships from unloading cargo, levying fines and even the threat of criminal prosecution for non-compliance. The heat is on and the industry is scrambling to find practical and affordable answer.
Current 'Best in Class' Technologies for Ballast Water Treatment Systems
With over 65 competitors listed by the IMO, competition is fierce, and UV and electro-chlorination systems are leading the way as the currently preferred technologies. As the deadline nears, these technologies are being carefully re-evaluated and official requests for extensions to achieve compliance are piling up.
Can Challenges of UV and Electro-chlorination Be Overcome?
UV and electro-chlorination are older technologies that inherently have major hurdles to clear: high capital costs, high operating energy requirements, and large size requirements.
The looming question is, "Can operators afford to achieve compliance with these existing technologies?" Timing is Terrible
The new requirement for approved Ballast Water Treatment Systems comes at a time when the maritime industry is experiencing severe financial strain from a global slowdown, and banks may be reluctant to pony up the $50 billion needed for their customer to achieve compliance. Clearly, the economics will be challenging.
High Energy Requirements Are Big Problems
Ultraviolet and electro-chlorination systems require large amounts of energy to operate and may require more energy than what ships can currently supply. Power requirements must be considered, as existing vessels were designed with generators matched to the electrical load of the original ship, with only a small reserve. Existing electrical generators may be insufficient to support the power plants of UV and electro-chlorination systems, and additional power supplies such as diesel generators could be required, incurring significant costs.
A further complication is that IMO standards mandate that newly installed diesel generators must be "Tier III" certified, meaning they are equipped with special emission control technologies such as selective catalytic reduction (SCR) or exhaust gas recirculation (EGR). Simply put, this means that the added power generators will be very expensive and they are exceedingly large. Since these new power supplies would need to be housed in the tight space available, this exacerbates an already complex issue that could keep engineers busy for years. Arguable the most important factor to consider is that the added water treatment systems and power supplies will diminish the payload capacity (mass) for the ship, meaning it would need to reduce its payload and therefore its revenue for each trip going forward.
Let's see if this adds up? Add costly capital equipment to meet the water discharge specification, add the required power supply, fit it all into the ship, increase the operating costs and lower the payload. This combination should send a shiver up the spine of any ship owner.
BioLargo's Newly Unveiled Advanced Oxidation System (AOS) is the "Low Energy, High Impact" Solution for the Maritime Industry
After millions of dollars in R&D, many government grants, and several years of hard work, BioLargo, Inc. (OTC: BLGO) recently showcased the first pre-commercial prototype of its AOS water treatment system, billed as the lowest cost and highest impact, scalable clean water technology in the world. By combining a cutting-edge carbon matrix, advanced iodine chemistry, and electrolysis, the technology rapidly and inexpensively eliminates bacteria and chemical contaminants in water. What places the AOS above competing technologies is its low cost of input electrical energy: studies done by BioLargo researchers in conjunction with the University of Alberta have shown the AOS to achieve dramatically higher rates of disinfection with approximately 1/20th the electrical energy input of competing technologies such as UV disinfection or electro-chlorination. It is this aspect of the AOS that places it above the competition for the race to solve the ballast water treatment problem, and is the key value proposition of the AOS in this highly competitive and super-charged market.
Figure 1: The Alpha AOS - Sensor drive and computer controlled
Ocean-going vessels already have power plants built to move ballast water, so whichever water treatment system can achieve competitive or even superior disinfection results with nominal power requirements could be adapted to current ships without major power plant upgrades. This is what separates BioLargo's AOS from all other options as the system of choice. If the AOS can manage a ship's ballast water treatment requirements without requiring installation of a Tier III IMO-certified power generator, it could be the default choice for many ship owners simply because such a power generator could be prohibitively expensive, space-intensive, and heavy.
The outstanding energy efficiency of the BioLargo AOS has another implication for ships requiring a ballast treatment system. Since a ship's ballast treatment system runs off power supplied by either the main diesel engine or an auxiliary diesel generator, a treatment system with lower power requirements consumes less fuel and therefore generates less greenhouse gas emissions. This point is critical, since new European Union and IMO rules mandate that ships' emissions be tightly regulated to meet strict standards, and in the case of the IMO measures, these standards become stricter every 5 years. With its unrivaled energy efficiency, the BioLargo AOS can make it easier for ships to comply with these regulations and reduce their carbon footprint.
In addition to the unrivaled performance and power efficiency of the BioLargo AOS, the technology has other attributes that make it valuable to the maritime industry. Namely, the AOS is perfectly capable of treating water with high turbidity or total dissolved solutes, which cannot be said of UV disinfection systems in particular. The AOS is also billed as a flexible, modular system that can accommodate space limitations and interact well with physical filtration systems, easing integration into existing infrastructure. Additionally, its capital cost is expected to be lower than UV and electro-chlorination in this context because its materials are simply, ubiquitous, and are readily available at a low cost. Importantly, the AOS also uses safe and eco-friendly materials and chemicals, elevating it for ship owners concerned with safety and environmental considerations.
The AOS will very soon be deployed in the livestock production industry, where its first pilot projects are slated. With additional scale-up engineering and partnership with manufacturing operators, the AOS can next be deployed in the maritime ballast water treatment market, where it could dominate the market with its low energy cost vs value proposition.
Dennis P. Calvert, President & CEO of BioLargo commented, "In order to successfully compete in this highly competitive and fast moving market, our company will need to pick our strategic partners carefully, focus on the engineering scale-up, and refine its business modeling to maximize value and cost savings for customers."
With the new regulations approaching rapidly, shipping companies such as Navios Maritime Holdings (NYSE: NM), DryShips, Inc. (NASDAQ: DRYS), Ship Finance International Limited (NYSE: SFL), Nordic American Tankers Limited (NAT), Frontline Ltd. (NYSE: FRO), Scorpio Tankers, Inc. (NYSE: STNG), Seaspan Corporation (NYSE: SSW), and Teekay Corporation (NYSE: TK) are watching closely and focused on finding the best solutions.
Luxury cruise operators such as Carnival Corporation (NYSE: CCL), Disney Cruise Line owned by The Walt Disney Company (NYSE: DIS), Norwegian Cruise Line Holdings, Inc. (NASDAQ: NCLH), and Royal Caribbean Cruises, Ltd. (NYSE: RCL) will also have to meet the same ballast water treatment requirements.
About BioLargo, Inc.
BioLargo is a science and technology company developing multiple advanced technologies that are now entering early stages of commercialization to treat water and air for broad use in large industries.
Dennis P. Calvert, President and CEO of BioLargo, comments, "We are thankful for the support by our shareholders and investors as we advance our technology and commercial efforts. Our AOS continues to garner attention from an expanding audience of industry, public funding sources, and potential strategic partners. Since our technical symposium approximately one month ago, we are experiencing a swell of attention and interest in anticipation of our first commercial pilots planned in early 2017. We are also busy advancing the automation and optimization of the system as it moves from alpha to beta in preparation of its first commercial pilots, as well as developing more operations oriented staff. Sales from our Odor-No-More subsidiary continues to improve as we build out infrastructure to support an increased focus on sales, marketing and manufacturing. We are also working closely with new distributors and agents to expand sales of our CupriDyne Clean (www.cupridyne.com) industrial odor control product. At this time, our advanced wound care products in development remain on target for 510(k) application with the FDA in early 2017. This is a great time at BioLargo and our future is bright!"
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