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Northern Sea Route, an essential element of sustainable global logistics to harness blue economy

The ocean economy spans multiple sectors—including oil and gas, fishing, aquaculture, shipping, marine technology, tourism, offshore wind energy, mining, and marine biotechnology—and is growing rapidly.

Northern Sea Route, an essential element of sustainable global logistics to harness blue economy
The cost of ocean resources is estimated at about US$ 24 trillion.

By Dr Alexander Nakhabov

The “Blue Economy” Concept

Ocean resources contribute to social and economic growth and welfare in many countries around the world through the industries associated with marine and coastal resources. They provide the lives of more than 3 billion people, produce 50% of oxygen and absorb 30% of carbon dioxide. The World Ocean also allows for trade – now 90% of goods are transported by sea. The cost of ocean resources is estimated at about US$ 24 trillion. The ocean economy spans multiple sectors—including oil and gas, fishing, aquaculture, shipping, marine technology, tourism, offshore wind energy, mining, and marine biotechnology—and is growing rapidly. In addition, the World Ocean is the world’s seventh largest economy, it is projected to exceed US$3 trillion by 2030. Since the oceans play such a significant role in providing social and economic well-being to the future generations, the “Blue Economy” concept is intrinsically vital.

Given India has a unique maritime position, shipping plays an important role in the economic development of the country, especially in India’s international trade. Approximately 95% of the country’s trade by volume and 68% by value is moved through Maritime Transport, with the share of seaborne trade to total foreign trade being 64.9%. India was also among the first in the world to create a Department of Ocean Development in 1981, now the Ministry of Earth Sciences (MoES). Based on the experience of more than three decades, India has come a long way with the launch of new programmes such as “Deep Ocean Mission,” “Oceanography from space” and “Launching of the data buoys” along the Indian coastline.

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The Government of India’s Vision of New India by 2030 enunciated in February 2019 highlighted the Blue Economy as one of the ten core dimensions of economic growth. The policy aims at increasing the contribution of the “blue economy” to India’s GDP in the next five years, improving the lives of coastal communities, preserving marine biodiversity and ensuring the safety of marine areas and resources.

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India’s approach to harness the Blue Economy’s socio-economic potential among others is focusing on logistics, infrastructure and shipping (including transshipments) as well as ocean security measures and balanced international engagements. The importance of global cooperation is also reflected in India’s Arctic Policy, published in March 2022, where the country’s 5 main Arctic goals are outlined, which include expanding India’s cooperation with the Arctic region, strengthening international efforts to combat climate change, and promoting the study of the Arctic in India. India is committed to sustainable economic cooperation that is of value to Arctic residents, including indigenous communities. The Arctic offers opportunities in various sectors in which Indian enterprises can be involved, become part of international trade. This explains, among other things, India’s interest in the opportunities of the Northern Sea Route (NSR).

Northern Sea Route: overview

Historically, people have long been interested in the discovery and development of new transport routes, which drive the economy and trade. In light of annual growth of world cargo traffic, a new NSR, which is the shortest way between Northern Europe and the countries of the Asia-Pacific region, will strengthen the global logistics network and make it more variable, adaptive and resistant to unforeseen situations.

The NSRh as a number of additional important advantages, such as lower fuel consumption due to shorter distances compared to other routes, which, in addition to economic benefits for shippers, positively contributes to the achievement of decarbonization goals .Currently, maritime transport generates approximately 1 Gt of CO2 emissions per year, and it has been struggling for many years to reduce its environmental impact. For example, the International Maritime Organization (IMO) has obliged sea carriers to reduce CO2 emissions by 50% by 2050. At the same time, it will be very difficult to achieve this indicator. Firstly, because of the scale: marine transport produces above 10% of all CO2 generated by transport worldwide. Secondly, there is no effective technology yet that could replace marine engines powered by fossil fuels. Due to its shorter length, navigation on the NSR contributes to reducing the carbon footprint of maritime transport -after the completion of the NSR development program, CO2 emissions could be reduced up to 20-30 million tons annually (which is 2-3% of the total volume of CO2 emissions).

So far, all these advantages of NSR remained unutilized due to a crucial drawback – most of the NSR passes through the seas of the Arctic Ocean, which, for a significant part of the year, are bound by thick ice, making it almost impossible for merchant ships to navigate. But this problem could be solved by using icebreakers, particularly nuclear-powered. Powerful and autonomous, advanced nuclear icebreakers have environmental benefits with no hydrocarbon fuel usage, no fuel spill accidents and negligible carbon footprint. In 2018, Rosatom, a company with years of experience in implementing large-scale sustainable infrastructure development projects, became the infrastructure operator of the NSR. As a result, in two years the number of operating nuclear icebreakers has grown from 4 to 6. At the moment, the construction of three more serial universal nuclear icebreakers of project 22220 with a capacity of 60 MW is underway, one of which will become part of Atomflot (a Rosatom enterprise responsible for the operation and maintenance of the civilian nuclear icebreaker fleet) by the end of 2022. These icebreakers will be universal, which means, they will be able to change the draft depending on the depth, allowing them to work both at sea and in deltas.

A decision has already been made to expand the 22220 series; the 5th and 6th serial icebreakers will be built by 2030 and 4 more non-nuclear icebreakers to serve shippers’ investment projects.

Work is also underway on the construction of the world’s most powerful nuclear icebreaker project 10510 (with a capacity of 120 MW), the commissioning of the lead icebreaker “Rossiya” is scheduled for 2027. The maximum thickness of the ice, overcome by these icebreakers, will exceed 4 meters.

In addition, Rosatom is also working with interested users of the NSR to build four additional non-nuclear icebreakers.

Among other improvements being made to ensure smooth navigation along NSR are construction of cargo fleet, supply and rescue ice-class vessels, development of the Arctic satellite constellation for forecasting meteorological and ice conditions, and improving communications network.

As a result of these efforts, the volume of cargo transportation has been growing every year. In 2016, the volume of cargo transportation along the NSR was 7.47 million tons. Transit traffic in 2021 amounted to over 2 million tonnes, registering 59% year-on-year growth. The total traffic along the route has been increasing up to almost 35 million tonnes with a goal to increase the traffic to 80 million tonnes in 2024.

From December 2021 to June 2022, 424 ships were serviced by nuclear-powered icebreakers. The total gross tonnage amounted to 44 million tons, up from 40 million tons the previous year. A significant increase in the volume of cargo transportation is connected with the active work of liquefied natural gas tankers. In November 2021, the first Russian tanker with a batch of LNG from Yamal plant in Siberia arrived in India through the NSR.

It is imperative that active development of NSR should be complemented by appropriate efforts regarding environmental care and protection of biological diversity of the Arctic region. In accordance with the Development Plan of the NSR until 2035, approved by the Government of Russia, a state environmental monitoring system of the NSR should be established by 2024 to ensure constant monitoring of the state of ecosystems in the Arctic. As a first step towards this, in 2021-2022 the pilot project of environmental monitoring of the NSR was carried out by Lomonosov Moscow State University Marine Research Center, an international experts group that included representatives of leading Russian and international research institutions and State Atomic Energy Corporation Rosatom. Results of the pilot monitoring demonstrated no deviations of chosen environmental indicators regarding background levels. In 2022-2023 the development of detailed programs and methodologies for each of the NSR monitoring areas has continued. What started in July with field expeditionary research on Rosatom research vessels will follow with the development of digital services for monitoring ship loading and pollution of the NSR water area, as well as laboratory and office studies and workshops with international experts, with Indianacademic community playing an important role in this work.

India’s interests in the Arctic and Areas of Cooperation

India has substantial experience in research in Antarctica, however, in the Arctic, its research efforts began only in 2007. India needs to participate actively in Arctic resource exploration, as the Arctic energy reserves have the potential for a substantial impact on India’s energy dynamics to sustain India’s economic growth rate. Since the Arctic holds the potential of vast energy reserves, there have been discussions on India’s participation in the utilization of Arctic energy. For India to be able to benefit from these Arctic resources, they would need partners. With this regard, the Indian Minister of Commerce and Industry expressed the hope that Russia and India could jointly develop the NSR. The use of the NSR will make it possible to create a viable alternate sea transport route – to the existing land corridor “North-South” between India and Russia.

India has a unique opportunity to take advantage of its strategic partnership with Russia and cooperate with it in diverse spheres, including development of the NSR. Russia-India cooperation in the Arctic is mutually advantageous; it is a strategic necessity for both countries given the challenging state of the global economy and a need to revive both the economies for the social-economic development of the people of both countries.

Author is PhD, Associate Professor, Deputy Head of the Nuclear Physics and Engineering department, Obninsk Institute for Nuclear Power Engineering of the National Research Nuclear University МЕРhI

Disclaimer: Views expressed are personal and do not reflect the official position of the author’s institution or policy of Financial Express Online. Reproducing this content without permission is prohibited.

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First published on: 17-11-2022 at 04:16:26 pm