Latin American Panel
13-14 September, 2010
Lima, Perú
GREENHOUSE GAS EMISSIONS
FROM SHIPPING
Peter M. Swift
Reducing Greenhouse Gas
Emissions from Shipping
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Key Dates
•
UNFCCC and IMO Programmes
•
Market Based Mechanisms
•
Industry Initiatives
UNFCCC = United Nations Framework Convention on Climate Change
Reducing Greenhouse Gas
Emissions from Shipping
Selected Key Dates
12/2009
UNFCCC COP15 Meeting, Copenhagen
3/2010
2010
IMO MEPC 60
IMO MBM-Expert Group
IMO MEPC Intersessional (EEDI)
UNFCC Interim meetings
2010
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9/2010
10/2010
11/2010
2010-2011
---------5/2011
7/2011
12/2011
IMO MEPC 61
INTERTANKO Council Meeting
UNFCCC COP16 Meeting, Cancun
EU Council/Commission meetings
2012
Kyoto Protocol expires
INTERTANKO Council Meeting
IMO MEPC 62
EU Deadline for IMO/International Agreement
UNFCCC - COP15
What was the outcome ?
• NO targets
• NO resolution of Kyoto/IMO Treaty conflict
• NO direct reference to international shipping in
Copenhagen Accord
BUT in subsequent discussions:
Shipping is “expected” to make its “contribution” to
Climate Change measures with $$$$ (UNFCCC et al)
International Aviation and Shipping should be regulated
via UNFCCC and have targets as per other industries
(EU Parliament)
IMO Programme
To develop:
EEDI for new ships (Mandatory)
SEEMP (Mandatory) & EEOI (Voluntary) for all ships
and, if possible/needed:
Market Based Measures for shipping
IMO – UNFCCC
Conflicting principles remains a major issue
IMO Principle:
“No More Favourable Treatment”
Versus
Kyoto Protocol principle:
“Common But Differentiated Responsibility”
IMO Intersessional Working Group
To improve the text for mandatory requirements of EEDI
and SEEMP in terms of:
• coverage of ship types and ship sizes for the EEDI;
• establishment of EEDI baseline(s);
• frequency of reducing the mandatory value of EEDI
(reduction in 3 phases);
• reduction rate from the baseline for the phases for the
EEDI;
To develop various guidelines:
• on the method of calculation of EEDI;
• for the calculation of baselines for attained EEDI;
• to support the regulatory framework for verification of the
EEDI
IMO MBM – Expert Group
Group of MBM schemes which would require all ships to pay a
contribution:
1. International Fund for Greenhouse Gas emissions from ships
– suggested by Denmark and supported in principle by
Cyprus, Marshall Islands and Nigeria
2. Global Emission Trading System for International Shipping, as
proposed by Norway, France and Germany with general
support from the UK
Group of MBM schemes which provide rewards to more energy
efficient ships:
3. Leveraged Incentive Scheme based on the International GHG
Fund - proposed by Japan.
4. Trading with Efficiency Credits based on Efficiency Standards
for All Ships - proposed by the USA.
5. Vessel Efficiency System - proposed by the World Shipping
Council.
Some are in sector, i.e. shipping only; others are out of sector
Why are MBMs Proposed ?
• Shipping is expected to become more energy efficient
• IMO will adopt technical measures for new ships (EEDI)
• Existing ships will also improve their energy efficiency
BUT
• CO2 emission reductions achieved through technical and
operational measures may not be sufficient and their effect will
not be seen in the short term
• The increasing demand for transportation at sea could well
lead to a net increase in CO2 emissions from ships even
though each ship may become more efficient
Why are MBMs Proposed ?
ETS or
other
MBM
Application of the GHG Fund
EEDI
BAU
Offset (out of sector)
Target line
Actual emissions
Application of ETS
EEDI
BAU
Offsetting (in sector & out sector)
Target line
Actual emissions
Funds to UNFCCC
General comments on MBMs
• Proposals at different level of maturity
• All proposals need further development
• All lack policy details with regard to
– enforcement
– administration
– carbon leakage
– fraud
– vessels registered with non-party flags
– harmonisation
Reducing Greenhouse Gas Emissions from
Shipping
Industry initiatives:
• Work on EEDI (including Tripartite workshops)
• Developing and assessing GHG reduction measures for
new and existing ships (Tripartite)
• Developing Marginal Abatement Cost Curves
- what is achievable ?
• Developing operational measures, such as “Virtual Arrival”
• Developing industry SEEMPs, such as INTERTANKO’s
TEEMP – Tanker Energy Efficiency Management Plan
plus
• Active participation in MBM Expert Group
Mitigation Measures
Mitigation Measures
MAC Curves - Industry study
“Virtual Arrival “
OCIMF /INTERTANKO project
Virtual Arrival is all about managing time and
managing speed.
It’s not about blanket speed reduction to match
current market conditions.
Virtual arrival is about identifying delays at
discharging ports, then managing the vessel’s
arrival time at that port/terminal through well
managed passage speed, resulting in reduced
emissions but not reducing capacity.
Virtual Arrival - Summary
• Cooperation between Charterer (Terminal Operator) and Owner
• Speed is “optimised” when ship’s estimated arrival is before the
terminal is ready
• Owners and Charterers agree a speed adjustment
• May use an independent 3rd party to calculate / audit adjustment
• Owners retain demurrage, while fuel savings and any carbon
credits are split between parties
Next Steps:
• OCIMF-INTERTANKO running joint workshops
• Charter Parties being reviewed
(INTERTANKO/BIMCO/BP/Chevron) – indemnity and liability
issues, including bills of lading
• Individual oil majors and owners “trialling” system
• Bulk carrier sector examining feasibility
Virtual Arrival
by taking advantage of known inefficiencies in the supply chain and
reducing speed when the terminal is not ready to discharge the cargo
In addition to directly reduced emissions, other benefits are:
• Reduced congestion and emissions in the port area
• Improved safety
• Potentially increased use of weather routing
Important pre-conditions:
• The safety of the vessel remains paramount
• The authority of the vessel’s Master remains
unchanged
• The basic terms of trade remain the same
What is needed to do to make
Virtual Arrival work?
1. A known delay at the discharge port
2. A mutual agreement between two (or more) parties to
adapt the ship’s arrival time to take advantage of the delay
3. An agreed Charter Party clause that establishes the terms
for reducing the speed to adapt to the new arrival time
4. An agreement on how to calculate and report the Virtual
Arrival and the performance of the vessel
5. This may involve a Weather Analysis Provider (WAP)
6. OCIMF/INTERTANKO and class are producing transparent
standards for verification of WAPs
But mainly it’s a win–win situation for all,
based on trust and transparency
Council Discussion/Policy Review GHG reductions
– INTERTANKO positions
Regulation/legislation of GHG emission reductions
to be coordinated through the IMO and to be flag
neutral; i.e. applicable to ALL ships
Support in principle for:
• Mandatory EEDI – subject to acceptable formula
• Targeted reductions in EEDI over time – subject to
realistic assumptions
• Mandatory SEEMP – subject to applicability of final
version and EEOI remaining “voluntary”
Council Discussion/Policy Review
Market Based Instruments:
• As a MINIMUM must meet IMO and INTERTANKO
principles
Do we need an MBM for Shipping ?
• Cost of fuel is already sufficient economic incentive
(frequently 60-80% of total operating costs)
• Without agreed “targets” for GHG reductions from
shipping, how is any shortfall quantified and how is the
“purpose” of an MBM defined?
IMO Principles
1.
2.
3.
4.
5.
6.
7.
8.
9.
Effective in contributing to the reduction of total global
GHG emissions
Binding & equally applicable to all flag States
Cost-effective
Able to limit or effectively minimize competitive
distortion
Based on sustainable environmental development
without penalizing global trade and growth
Based on a goal-based approach and not prescribe
specific methods
Supportive of promoting and facilitating technical
innovation and R&D in the entire shipping sector
Accommodating to leading technologies in the field of
energy efficiency
Practical, transparent, fraud free and easy to
administer
Muchas Gracias
Thank you
For more information, please visit:
www.intertanko.com
www.shippingfacts.com
www.maritimefoundation.com
London, Oslo. Washington, Singapore and Brussels
Kyoto Protocol
• Established under UN Framework Convention on Climate
Change (UNFCCC) and adopted in 1997
• Ratified by 181 countries – not the USA
• Categorises Annex 1 (Developed) Countries and NonAnnex 1 (Developing) Countries
• Annex 1 Countries are committed to make GHG reductions
with set targets, but also flexible mechanisms
• Runs through to 2012, with Conference of Parties (COP15)
to meet in Copenhagen in Dec 2009 to develop successor
• Kyoto recognises “common but differentiated
responsibilities”, i.e. developed countries produce more
GHGs and should be “responsible” for reductions
• Kyoto looks to IMO to address Shipping and ICAO to
address Aviation, and as such these emissions are
currently excluded from Kyoto targets
MBM Proposals
• Out of shipping sector mechanisms
– International GHG Fund (Denmark et al.)
– Emission Trading Scheme (Norway et al.)
– Rebate Mechanisms (IUCN)
• In shipping sector mechanisms
– Leverage Incentive Scheme (Japan)
– Ship efficiency & Credit Trading (USA)
– Vessel Efficiency System (WSC)
– Port State Levy (Jamaica)
– Penalty on Trade and Development (Bahamas)
Ship Efficiency and Credit
Efficiency Credit = (EIr – EIa) x Activity
US EEDI (EIr)
Efficient Credit >0 = Sells Credits
Efficient Credit < 0 = Buys Credits
Existing hip (EIa)
New ship IMO EEDI (US EIa)
IMO EEDI
Leverage Incentive Scheme
EEDI
Attained
Ship 1
Ship 2
Ship 3
Req. EEDI 1
0%
Req. EEDI 2
50%
Req. EEDI 3
100%
50%
EEOI
NEW BUILDING
benchmark
PATERN 1
Actual
Initial EEOI
PATERN 2
EXISTING SHIPS
Reduced EEOI
Possible Abatement Measures
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Gas fuelled engines
Electronic engine control
Waste heat recovery
Air cavity lubrication
Contra-rotating propeller
Fuels cells as auxiliary
engines
Frequency converters
Exhaust gas boilers on
auxiliary engines
Energy efficient light
systems
Wing generator
Wind power – kite
Wind power – fixed sails or
wings
Solar panels
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Solar panels
Trim/draft optimising
Weather routing
Voyage execution
Steam plant operational
improvements
Speed reduction due to port
efficiency
Propeller condition
Speed reduction due to fleet
increase
Hull condition
Propulsion efficiency devices
Cold ironing
Engine monitoring
Reduced auxiliary power
usage