Russian Maritime Register of Shipping XIII International Seminar Quality Shipping: 21st Century Standards

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Russian Maritime Register of Shipping XIII
International Seminar Quality Shipping 21st
Century StandardsHumans and the Sea a Long
Way towards HarmonyFuture Means of Reducing
GHGEmissions

• Peter M. Swift
• MD INTERTANKO
• 20-21 October 2010
• St Petersburg

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INTERTANKO Today

• 260 members operating ca. 3,100 ships
• gt 75 of the independent oil tanker fleet and gt
  85 of the chemical carrier fleet
• 300 associate members
• in oil and chemical tanker related businesses
• With strict membership criteria
• 15 Committees 5 Regional Panels
• Principal Offices London and Oslo
• Representative Offices in US, Asia and Brussels
• Observer Status at IMO, IOPC, UNFCCC, OECD and
  UNCTAD
• International Association of Independent Tanker
  Owners
• The Voice of the Tanker Industry

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INTERTANKOs Strategic Objectives

• To develop and promote best practices in all
  sectors of the tanker industry, with owners and
  operators setting the example.
• To be a positive and proactive influence with key
  stakeholders, developing policies and positions,
  harmonising a united industry voice, and engaging
  with policy and decision makers.
• To profile and promote the tanker industry,
  communicating its role, strategic importance and
  social value.
• To provide key services to Members, with
  customised advice, assistance and access to
  information, and enabling contact and
  communication between Members and with other
  stakeholders.

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Humans and the Sea Long Way towards Harmony!
Seafarer Concerns Today

• Criminalisation Fair Treatment
• Piracy
• Isolation
• On board living conditions
• Fatigue
• Bureaucracy, including
• - excessive paperwork
• - too many inspections
• - equipment and designs not fit for purpose
• The seafarer has to make it work - or risk being
  penalised if it doesnt !

More consideration should be given to the
ramifications for the seafarer of new regulations
and legislation at IMO and elsewhere e.g.
ballast water, multi-fuels, emission abatement
technologies, etc.
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The Sea and HumansConcerns for Humankind

• Protection of the Marine Environment
• Climate Change
• (GHG emissions)

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Shipping is energy efficient

• - environmentally responsible, reliable and cost
  efficient

Source Danish Shipowners Association
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Shipping is energy efficient, BUT

• CO2 emissions by country (2007)

CO2 emissions from shipping 2.7 of global total
(2007) and predicted to grow as trade expands
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Future Means of Reducing GHGEmissions from
Shipping

• Regulatory Processes Timetables
• IMO Programme
• Industry Initiatives

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The Regulatory Processes

• UNFCCC 1992
• IMO since 1997
• Kyoto Protocol, adopted 1997 entered into force
  2005
• Copenhagen Accord 2009
• UNFCCC United Nations Framework Convention on
  Climate Change

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Kyoto Protocol

• Established under UN Framework Convention on
  Climate Change (UNFCCC) adopted in 1997
• Ratified by 181 countries not the USA
• Categorises Annex 1 (Developed) Countries and
  Non-Annex 1 (Developing) Countries
• Annex 1 Countries are committed to make GHG
  reductions with set targets, but also flexible
  mechanisms
• Runs through to 2012, - Conference of Parties
  endeavouring to develop a successor
• Kyoto recognises common but differentiated
  responsibilities, i.e. developed countries
  produce more GHGs and should be more
  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

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Recent and future timetableSelected Key Dates

• 12/2009 UNFCCC COP15 Meeting, Copenhagen
• 3/2010 IMO MEPC 60
• 2010 IMO MEPC MBM-Expert Group
• IMO MEPC Intersessional (EEDI)
• 2010 UNFCC Intersessional meetings
• 9/2010 IMO MEPC 61
• ------------
• 11/2010 UNFCCC COP16 Meeting, Cancun
• ------------
• 7/2011 IMO MEPC 62
• 12/2011 EU Deadline for IMO/International
  Agreement
• 2012 Kyoto Protocol expires

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IMO UNFCCC Conflicting principles - a major
issue

• IMO Principle
• No More Favourable Treatment
• Versus
• Kyoto Protocol principle
• Common But Differentiated Responsibility

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Future Means of Reducing GHGEmissions from
Shipping

• Technical measures
• Operational measures
• Market based measures

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Future Means of Reducing GHGEmissions from
Shipping

• IMO Programme developing
• Technical Measure (EEDI for new ships)
• Operational Measure (SEEMP EEOI for new and
  existing ships)
• Market Based Measure (if needed)

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Technical Measures
Energy Efficiency Design Index (EEDI)

• Environmental cost Emission of CO2
• Benefit Cargo capacity transported a certain
  distance
• measures energy efficiency of new ships
• encourages design and technical developments
• Initially only the calculation of the Attained
  EEDI was planned to be mandatory, but the drive
  is to establish a mandated requirement, such that
  the Attained EEDI lt Required EEDI

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EEDI RequiredTankersgt20,000 DWT
Reference Line Phase 0 no reduction (2013
2014)
EEDI
Attained EEDI lt Required EEDI
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Phase 1 2015 - 2019
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Phase 2 2020 - 2024
Phase 3 on and after 2025
DWT
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Operational Measures

• Ship Energy Efficiency Managment Plan (SEEMP)
• encourages improvement energy efficiency of ships
  in operation
• best measurable practices on operational
  procedures setting goals
• plan implementation strategy
• monitoring Energy Efficiency Operational
  Indicator (EEOI)
• procedures for self-evaluation and improvement
  towards set goals
• Energy Efficiency Operational Indicator (EEOI)
• CO2 emitted per unit of transport work
• CO2 emitted measured from fuel consumption
• Transport work cargo mass x distance (nm)
• EEOI is voluntary a management tool

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Market Based Measures

• MBMs under review at MEPC
• Emissions Trading Schemes
• GHG Fund and Leveraged Incentive Schemes
• Ship Efficiency Credit Trading
• and Vessel Efficiency System
• Rebate Mechanism
• Some would require all ships to pay a
  contribution
• Some provide rewards to more energy efficient
  ships
• Most include a support mechanism to developing
  countries

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Why are MBMs Proposed ?

• Ships have a long life EEDI takes time /
  operational measures not readily
  quantifiable further incentives may be needed
• International trade and shipping will continue
  to grow
• A deemed need to fund offsetting in other
  sectors

or ETS or other MBM
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Future Means of Reducing GHGEmissions from
Shipping

• Industry activities and initiatives

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Means of Reducing GHGEmissions from Shipping

• Industry initiatives
• Work on EEDI formula and reference line
  (workshops)
• Developing and assessing additional GHG reduction
  measures for new and existing ships (workshops)
• Developing Marginal Abatement Cost Curves
• - to determine what is achievable (study groups)
• Developing and implementing operational measures,
  such as Optimal speed (Liners) and Virtual
  Arrival (Tankers and Bulkers)
• Developing industry SEEMPs, such as INTERTANKOs
  TEEMP Tanker Energy Efficiency Management Plan
• plus
• Active participation in MBM Expert Group

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Technical and Operational Mitigation Measures
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Technical and Operational Mitigation Measures
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Marginal Abatement Cost Curves
PRELIMINARY DRAFT, Not for circulation
Developed in conjunction with DNV
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Virtual ArrivalOCIMF / INTERTANKO project

• THE CONCEPT
• Virtual arrival is about identifying delays at
  discharging ports, then managing the vessels
  arrival time at that port/terminal through well
  managed passage speed, resulting in reduced
  emissions but not reducing capacity.
• It is NOT not about blanket speed reduction to
  match current market conditions.
• Virtual Arrival is all about managing time and
  managing speed.

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Virtual ArrivalOCIMF / INTERTANKO project

• THE MECHANICS
• Cooperation agreement between Charterer
  (Terminal Operator) and Owner
• Speed is optimised when ships 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

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Virtual Arrival- additional benefits

• In addition to directly reduced emissions, other
  benefits include
• Reduced congestion toxic emissions in the port
  area
• Improved reliability/safety
• Potentially increased use of weather routing
• Important pre-conditions
•   The safety of the vessel remains paramount
• The authority of the vessels Master remains
  unchanged
• The basic terms of trade remain the same

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Is an MBM needed for Shipping ?
With bunker costs frequently 60-80 of total
operating costs, does shipping need any further
market incentive to reduce GHG emissions ?
Bunker prices 2000 2010 USD/tonne HFO 380
cst / MDO / MGO, Fujairah
USD/tonne
MGO since Dec 2008
Source Bunkerworld
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THANK YOU ???????! For more information, please
visit www.intertanko.com www.shippingfacts.com
www.maritimefoundation.com