VI International Maritime
Conference
Waiting for Fair Winds
Tallinn 24.09.2010
The effects of SECA and NECA on shipping
Olof Widén
Finnish Shipowners’ Association
IMO decision on Sulphur regulations
for Marine Fuel (Marpol Annex VI)
5,0
International (and the rest of EU)
If feasible
English channel, North Sea & Baltic Sea
4,0
3,0
2,0
No feasibility
study
1,0
In EU 0.1% Sulphur for ships at berth effective on 1 January 2010
20
26
20
24
20
22
20
20
20
18
20
16
20
14
20
12
20
10
20
08
0,0
Geographical area of the IMO
sulphur regulation
The Sulphur Emission Control Area (SECA)
Countries with water only in SECA
Countries with part of the coast in SECA
Countries without coast in SECA
Has not signed the Marpol convention
The IMO decision on sulphur will
give a substantial cost increase
1400
1200
Low sulphur fuel (0,1 %) - cost increase of 75 %
USd/mt
1000
800
05-07%SRNWECFH
Usd/M T
1PCTNWECCH
0,5 % sulphur in fuel - cost increase of 10 %
3.5PCTNWECCH
600
GO01/02NWECCH
400
200
Source:
Preem
Datum
The light blue line is marine fuel with a 0,1-0,2 % sulphur content and the yellow line is bunker oil, the marine fuel used
world wide today. Even though price varies over time the price difference between low sulphur fuel and bunker oil is
almost always around 250-300 USD/tonne. Dark blue line is 0,5 % sulphur content in marine fuel.
2008-12-15
2008-09-01
2008-05-15
2008-01-28
2007-10-08
2007-06-22
2007-03-05
2006-11-15
2006-08-01
2006-04-12
2005-12-23
2005-09-09
2005-02-04
2004-10-19
2004-07-05
2004-03-16
2003-11-27
2003-08-13
2003-04-15
2005-05-25
Regular bunker oil
0
1. The Finnish note to the Secretary
General of IMO about not accepting
the amendments in Marpol Annex VI
• Referring to the Marpol-convention article 16 paragraph (2)
(f) (ii) that is stipulating about the quiet acceptance by two
thirds of the parties, the combined merchant fleets of which
constitute not less than 50 % of the world’s merchant fleet.
• ”Nevertheless at any time before entry into force a party may
notify the secretary general of IMO that its express approval
will be necessary before the amendments enters into force for
it”.
• The dead-line for this declaration was 1.1.2010.
2. The Estonian note to the Secretary
General of IMO about not accepting
the amendments in Marpol Annex VI
• Referring to Marpol convention article 16 paragraph (2) (g)
(ii) stipulating that an amendment enters into force six
months after its acceptance for all the parties with the
exception of:
• “those which before that date [1.1.2010] have made a
declaration that they do not accept it or a declaration under
sub-paragraph (f) (ii) that their express approval is necessary.
• The dead-line for this declaration is 1.7.2010.
MARPOL Annex VI
1.7.2010
• What did Finland
and Estonia gain
from their notes?
• FIN & EST flagged
vessels will
continue trading
in their territorial
waters and economical zones
with 1.5% bunker
SOx emission and the number of ships in Baltic Sea
180
14000
160
12000
140
10000
8000
100
80
6000
60
4000
40
2000
20
0
0
1990
2000
2006
2007
SOx emission in Baltic Sea
2008
Year
2009
2010
2015
Number of Ships in Baltic Sea
2020
Reference: HELCOM years 2006-2009 based on AIS-data and unpublished modell data for the years 2010-2020 with 0.1% sulphur in 2015 och 2% growth..
Number of ships
SOx (kt year-1)
120
SO2 emissions in Finnish EEZ and arrivals to Finnish ports
25000
45000
40000
20000
35000
30000
SO2 (t)
25000
20000
10000
15000
10000
5000
5000
0
0
1990
2000
2006
2007
SO2 (t) in Finnish EEZ
2008
Year
Reference: Finnsih transport Agency
2009
2010
2015
Arrivals to Finnish ports
2020
Arrivals
15000
The new IMO Sulphur regulation for North Europe is unacceptable since it creates a trade barrier
within the European Internal Market and will lead to a modal back-shift. A constructive and
alternative solution is needed. Actions must be taken during 2010.
Suggested solution for the North European (S)ECA
2015 = 0.5 %
2012 =Impact assessment of (S)ECA to be included
in the global review
MEPC 61
Industry-Group
National Co-ordinations
ECSA/SEC
February
March
April
Commission
May
FSA/SSA
MEPC 61
July
Correspondent group
Entec study
ECSA
Industry-Group
Official letter to the
Commission?
EU Co-ordination
27Sep – 01 Oct
MEPC 61
ICS submissions
Letter to ECSA
Letter to ICS
June
MEPC 62
EU Co-ordination
Stakeholders
meeting postponed
until?
ECSA/Board
National Co-ordinations
MEPC 61
Third meeting?
ICS/Board
MEPC 62
August
Septem
ber
July 2011
October
MEPC 62
ICS/board
MEPC 62
ICS Submissions
The ECSA Board of Directors agreed at its June 30th
meeting on the following position
• To maintain the ECSA support for a change of the 0.1 %
to 0.5 % in 2015.
• The shipping industry can be open and positive to a
possible change of the time scale to 2020 as considered
by some Member States. Much will depend on the
further process on the attitude of Member States.
• To strongly support a submission by ICS of the ENTEC
study summarising the results of all studies made.
Purpose of the submission is to bring forward the feasibility study to be made in IMO on Annex VI from 2018
to 2012. The feasibility study should include the 0.1 %
in the ECAs. The ENTEC study could lay the basis. This
would have to be decided at MEPC 62 in July 2011.
Transport ministers concerned over IMO
sulphur regulations, Antwerp 16.09.2010
• Several EU-ministers shared the concern over the impacts of
the sulphur regulations on costs. However, the discussions
indicated that the EU countries are not ready to change the
decision made at the IMO.
• The Finnish transport minister Ms Vehviläinen expressed that
she personally would be prepared to consider a postponement
of the IMO timetable, but she got support for these thoughts
only from the Estonian transport minister.
• Finland also, alongside with a number of other countries,
brought up the potential that new technology, such as
scrubbers and alternative fuels, offer in terms of ensuring a
cleaner Short Sea Shipping sector.
Marine Fuels Outlook
• The global demand 2008 was 370 Mtons.
– The balance between IFO 180/380 and MDO/MGO
was, 290 million tons and 80 million tons.
• The estimated global demand 2015 is 410 Mtons
– The balance between IFO 180/380 and MDO/MGO
with 0.1 % in ECAs is, ? Mtons and ? Mtons.
• The estimated global demand 2020 is 450 Mtons
– The balance between IFO 180/380 and MDO/MGO
with 0.1 % in ECAs and 0.5 % is, ? Mtons and ?
Mtons.
THE WAY FORWARD
• IMO MEPC 61 outcome
– The governments must support the ICS proposal to
establish a correspondent group.
• The missing link
– Support from flag states is needed for ICS to go
forward.
• IMO MEPC 62
– Is going to be held in July 2011. Are there concerns
regarding this shortage of time? YES
NOx (Nitrogen Oxides)
• HELCOM is preparing a proposal for IMO MEPC
62 in july 2011 to designate the Baltic Sea as
an emission control area ECA for Nitrogen
Oxides NOx.
• This proposal is prepared by:
Denmark, Estonia, Finland, Germany,
Lithuania, Latvia, Poland, Russian Federation
and Sweden.
NEW LIMITS FOR NOx EMISSIONS
FOR DIESEL ENGINES
 New Annex VI entered into force 1 July 2010.
 Tier I NOx regulations will be applied retroactively to
certain types of diesel engines on ships constructed on
or after 1 January 1990 but prior to 1 January 2000.
– Power output of more than 5 000 kW
– A per cylinder displacement at or above 90 litres
 Tier II NOx regulations will be applied to a marine diesel
engine installed on a ship constructed on or after 1
January 2011.
 Tier III NOx regulations will be applied to a marine
diesel engine installed on a ship constructed on or after
1 January 2016, when the ship is operating in an
Emission Control Area for NOx emissions.
THE NEW LIMITS FOR NOx
EMISSIONS FOR DIESEL ENGINES
NOx emission limits for Tier I, Tier II and III
NOx -limit [g/kWh]
20
Tier I
15
Tier II
10
Tier III (Emission
Control Area)
5
0
0
500
1000
1500
2000
Rpm of the engine [rpm]
2500
The statement of Finnish Shipowners’
Association FSA
• FSA has been arguing for a proper and fundamental
NECA-impact study to be performed.
• There is an insistence for such a study to be completed
before any NECA-submission to IMO can be accepted.
• This NECA-study must be carried out both for the
impact- and the health aspect and in parallel for the
North Sea & English Channel area and the Baltic Sea.
• For the moment the OSPAR countries are not preparing
a NECA-proposal for the North Sea & English Channel
area.
Three different studies in preparation
1. Environmental and health impacts, done by
the Finnish Meteorological Institute, whole
Baltic Sea area;
2. Impacts on transportation costs in the whole
Baltic Sea area, done by University of Turku;
3. Impacts on transportation costs in Finland (in
Finnish), done by University of Turku.
The way forward in the NOx issue is a
joint HELCOM & OSPAR application
• The next HELCOM Maritime meeting is going
to be kept in November 2010. A decision will
be made about a submission to IMO.
• The North Sea ECA (OSPAR) must be part of a
proposal to IMO.
• Both European Community Shipowners’
Association ECSA and International Chamber
of Shipping ICS have today an observatory
status in HELCOM.
Thank you for your attention!
olof.widen@shipowners.fi
www.shipowners.fi
Hämeentie 19, FI-00500 Helsinki or,
Hamngatan 8, AX-22100 Mariehamn