IMO’s work on prevention of air pollution IMO’s work on prevention of air pollution and control of GHG emissions from shipsand control of GHG emissions from ships
Adoption of mandatory Energy Efficiency measures for shipsAdoption of mandatory Energy Efficiency measures for ships
Eivind S. VagslidTechnical Adviser to the Secretary-General
Secretary-General’s OfficeIMO
Visit to IMO by Norwegian Shipping ForumLondon 18 October 2012
2
IMO – specialised UN agency• 170 Member States• IGOs and NGOs• London headquarters• Annual budget £30+ M• Secretariat: 300+ staff• 50+ Nationalities• Secretary-General: Koji Sekimizu, Japan
Safe, secure and efficient shipping on clean oceans!Safe, secure and efficient shipping on clean oceans!
53 treaties covering all aspects of international shippingDesign – Construction - Equipment – Operation – Maintenance – Manning
Prevention – Response – Liability – Compensation
3
IncidentIncident Proposal to IMOProposal to IMO CommitteeCommittee
Discussion, refer Discussion, refer to Sub-Committee, to Sub-Committee,
Working GroupWorking Group
Development of draft Development of draft Regulation, circular, Regulation, circular,
Code or resolutionCode or resolutionAdoption of Adoption of
new regulationnew regulation
Idea,Idea,developmentdevelopment
Progress of measures at IMO - exampleProgress of measures at IMO - example
4
Safety and SecuritySafety and SecuritySOLAS, STCW, Load lines, COLREGS, SUA
Pollution PreventionMARPOL Annexes I to VI, Dumping (LC/LP),
Intervention, AFS, [Ballast Water Management,] [Recycling]
Response and ReactionSAR, OPRC, HNS Protocol,
[Wreck removal]
Liability and CompensationCLC, IOPC Fund, Athens, Bunkers, HNS
IMO’s Treaty Instruments
5
IMO’s Treaty Instruments
Instrument Date of entry into forceNo. of Contracting States / Parties % world tonnage*
IMO Convention 17-Mar-58 170 97.16SOLAS 1974 25-May-80 162 99.20SOLAS Protocol 1978 01-May-81 117 96.86SOLAS Protocol 1988 03-Feb-00 103 95.67Stockholm Agreement 1996 01-Apr-97 11 8.59LL 1966 21-Jul-68 161 99.19LL Protocol 1988 03-Feb-00 98 95.96TONNAGE 1969 18-Jul-82 152 99.06COLREG 1972 15-Jul-77 155 98.71CSC 1972 06-Sep-77 78 60.95 1993 amendments Not yet in force 9 6.18SFV Protocol 1993 Not yet in force 17 19.78STCW 1978 28-Apr-84 156 99.22STCW-F 1995 29-Sep-12 15 4.75SAR 1979 22-Jun-85 103 62.45STP 1971 02-Jan-74 17 23.98SPACE STP 1973 02-Jun-77 16 23.33IMSO 1976 Convention 16-Jul-79 97 94.92 1998 amendments 31-Jul-01 40 26.91 2008 amendments**
Not yet in force** 10 3.65
FAL 1965 05-Mar-67 115 90.77
6
MARPOL 73/78 (Annex I/II) 02-Oct-83 152 99.20
MARPOL 73/78 (Annex III) 01-Jul-92 138 97.59
MARPOL 73/78 (Annex IV) 27-Sep-03 131 89.65
MARPOL 73/78 (Annex V) 31-Dec-88 144 98.47
MARPOL Protocol 1997 (Annex VI) 19-May-05 71 94.29
LC 1972 30-Aug-75 87 67.17
1978 amendments Not yet in force 20 17.49
LC Protocol 1996 24-Mar-06 42 35.64
INTERVENTION 1969 06-May-75 87 75.10
INTERVENTION Protocol 1973 30-Mar-83 54 50.36
CLC 1969 19-Jun-75 36 2.59
CLC Protocol 1976 08-Apr-81 53 56.41
CLC Protocol 1992 30-May-96 130 97.19
FUND Protocol 1976*** 22-Nov-94 31 47.33
FUND Protocol 1992 30-May-96 111 91.22
FUND Protocol 2000**** 27-Jun-01 - -
FUND Protocol 2003 03-Mar-05 28 20.44
NUCLEAR 1971 15-Jul-75 17 20.38
PAL 1974 28-Apr-87 34 44.34
PAL Protocol 1976 30-Apr-89 25 40.46
PAL Protocol 1990 Not yet in force 6 0.85
PAL Protocol 2002 Not yet in force 9 2.11
LLMC 1976 01-Dec-86 53 53.75
LLMC Protocol 1996 13-May-04 46 45.95
SUA 1988 01-Mar-92 160 94.63
SUA Protocol 1988 01-Mar-92 148 89.65
SUA 2005 28-Jul-10 22 30.27
SUA Protocol 2005 28-Jul-10 18 29.52
SALVAGE 1989 14-Jul-96 63 50.48
OPRC 1990 13-May-95 104 70.8
HNS Convention 1996 Not yet in force 14 13.61
HNS PROT 2010 Not yet in force - -
OPRC/HNS 2000 14-Jun-07 28 38.43
BUNKERS Convention 2001 21-Nov-08 66 90.00
AFS Convention 2001 17-Sep-08 62 80.33
BWM Convention 2004 Not yet in force 36 29.07
NAIROBI WRC 2007 Not yet in force 5 1.16
HONG KONG Convention Not yet in force - -
**** Entered into force by means of tacit acceptance procedure on 27 June 2011
*Source: IHS-Fairplay - World Fleet Statistics 31 December 2011
** At its twentieth session, the IMSO Assembly decided to apply the amendments provisionally, with effect from 6 October 2008, pending their formal entry into force
*** Consequent on the cessation of the 1971 Fund Convention on 24 May 2002 this Protocol is considered having ceased with effect from the same date.
Ship emissions one of the last major ship Ship emissions one of the last major ship pollutants to be regulatedpollutants to be regulated
Work started at IMO in the late 1980’s
Annex VI adopted in 1997, in force in May 2005,
Substantially revised 2005 – 2008
Revised Annex VI in force 1 July 2010 Prohibits ODS in line with the
Montreal Protocol
Regulates exhaust gas: NOx & SOx (PM), and cargo vapours from tankers (VOC)
Energy Efficiency covered in new chapter 4 in force 1 January 2013
Range of typical CO2 efficiencies for various cargo carriers
Road
RoRo/Vehicle
LPG
Bulk
Reefer
LNG
Crude
Container
General Cargo
Chemical
Product
Rail
0 50 100 150 200 250 300g CO2 / ton*km
Data: Second IMO GHG Study 2009
Source: Fearnley's Review
World seaborne trade 1968-2008 World seaborne trade 1968-2008
Baseline efficiency improvement in historic prespective
0
40
80
1950 1970 1990 2010 2030 2050
Year of construction
g C
O2
/ to
n-n
m (
ind
ica
tive
va
lue
) '
Gen cargoContainerBulkTanker
0
50
100
150
200
250
300
350
400
450
1950 1960 1970 1980 1990 2000 2010
Fue
l Con
sum
ptio
n (M
illio
n to
ns)
This study
IMO Expert Group (Freight-Trend), 2007
Endresen et al., JGR, 2007
Endresen et al (Freight-Trend)., JGR, 2007
EIA Total marine fuel sales
Point Estimates from the Studies
This study (Freight trend)
Efficiency improvements
Fuel Consumption World Fleet
Second IMO GHG Study 2009Second IMO GHG Study 2009
Scenarios for CO2 emissions from International Shipping from 2007 to 2050 in the absence of climate policies
0
1000
2000
3000
4000
5000
6000
7000
8000
2000 2010 2020 2030 2040 2050
CO
2 em
issi
ons
from
shi
ps (m
illio
n to
ns C
O2
/ yr)
'
A1FI
A1B
A1T
A2
B1
B2
Max
Min
B2
B1
A2
A1T
A1B
A1F
I
Other
Bulk
General Cargo
Container
RoRo /Vehicle
Ropax Cruise
Tank
0 50 100 150 200 250
CO 2emissions (million tons / yr)
Deep sea ships
Regional shipsOther
Bulk
General Cargo
Container
RoRo /Vehicle
Ropax Cruise
Tank
Other
BulkBulk
General CargoGeneral Cargo
ContainerContainer
RoRo /VehicleRoRo /Vehicle
Ropax CruiseRopax Cruise
TankTank
0 50 100 150 200 250
CO 2emissions (million tons / yr)
Deep sea ships
Regional ships
0 50 100 150 200 250
CO 2emissions (million tons / yr)
Ocean going
Coastwise
2007 shipping CO2 emissions 870 million tons
Future CO2 emissions: Significant increase predicted: 200 - 300%
by 2050 in the absence of regulations Demand is the primary driver Technical and operational efficiency
measures will provide significant improvements but will not be able to provide real reductions if demand continues
Manufacturing Industries and Construction
18,2 %
Other Energy Industries
4,6 %
Unallocated Autoproducers
3,7 %
Main Activity Electricity and
Heat Production35,0 %Transport
21,7 %
Other Sectors 11,6 %
International Shipping
2,7 %
International Aviation1,9 %
Domestic shipping &
fishing0,6 %
Potential Potential reductions of CO2 emissionsreductions of CO2 emissions
DESIGN (New ships) Saving of
CO2/tonne-mile
Combined
Concept, speed & capability 2% to 50%+
Hull and superstructure 2% to 20%
Power and propulsion systems
5% to 15%
Low-carbon fuels 5% to 15%*
Renewable energy 1% to 10%
Exhaust gas CO2 reduction 0%
10% to 50%+
OPERATION (All ships)
Fleet management, logistics & incentives
5% to 50%+
Voyage optimization 1% to 10%
Energy management 1% to 10%
10% to 50%+
12
Examples of efficiency measures:Technical:
-Improved hull design and engine efficiency
-More efficient propellers and rudders
-Larger ships, combination carriers
-Reduce installed power (speed)
-Wind and solar power
-Alternative fuels
Operational:
-Speed and energy management
-Improved routeing & less waiting
-Enhanced fleet management and better utilization
2030 – abatement potential
-100
-60
-20
20
60
100
140
180
220
0 100 200 300 400 500 600 700 800
CO2 reduction (million tons per year)
Co
st p
er t
on
CO
2 a
vert
ed (
$/to
n)
Voyage execution
Engine monitoring
Steam plant operational improvements
Propulsion efficiency devices
Contra-rotating propellers
Trim/draft
Propeller conditionFrequency converters
Air cavity/lubricationWeather routing
Hull condition
Reduce auxiliary power
Kite
Speed reduction (port efficiency)
Cold ironingExhaust gas boilers on aux
Fixed sails/wingsSpeed reduction (fleet increase)
Fuel cells as aux engineLight system
Electronic engine controlGas fuelled
Waste heat recovery
Solar panel (not shown)Wind generator (not shown)
2
Baseline: 1,530 million tons per year
Average marginal CO2 reduction cost per option - World shipping fleet in 2030 (existing and newbuilds)
Note; abatement potential for individual ship types and size segments vary widely
IMO’s work on GHG control and Energy efficiency
Work on air pollution prevention from late 1980s
In 1991 IMO’s Assembly called for the development of MARPOL Annex VI
The 1997 MARPOL Conference’s on Annex VI called for GHG action by IMO
First IMO GHG Study published in 2000 (1.8% - rapid and massive growth)
IMO’s GHG policy adopted by Assembly 23 in December 2003 (res.963(23))
Development of T&O measures, including EEOI, EEDI, SEEMP: 2000 – 2009
Voluntary application and testing by administrations and industry: (2005) 2009 ----
Basic principles adopted by MEPC 57 (April 2008)
Regulatory text developed 2009 – 2011
2011: Adoption of new chapter 4 to MARPOL Annex VI: mandatory T&O measures
Second IMO GHG Study 2009 published (2.7%, significant reduction potential)
Development of an MBM from 2007, Expert Group reported in 2010
Technical - mainly applicable to new ships – EEDI
Operational - applicable to all ships in operation – SEEMP and EEOIMarket-based Measures (MBM) – carbon price for shipping, offsetting, incentive, may generate funds
Breakthrough at IMOBreakthrough at IMOMEPC 62 MEPC 62 (11 – 14 July 2011)(11 – 14 July 2011)
Mandatory technical and operational measures adopted
Mandatory energy efficiency measures Adopted (EEDI and SEEMP) for all ships by inclusion of new chapter 4 in MARPOL Annex VI
Further development of supporting guidelines on:Calculation of EEDI EEDI Reference Lines (average of ships built 1999 – 2009)EEDI Survey and CertificationDevelopment and implementation of SEEMP EEOI - Energy Efficiency Operational Indicator (MRV tool and benchmark)
Work on EEDI formulas for ship types not yet covered
Intersessional meeting in January 2012 prepared guidelines
New Chapter 4 to Annex VI• Regulation 19 – Application- Ship types: bulk carriers, tankers,
container ships, general cargo ships,
gas carriers, reefers and combination carriers
- Covers 71% of international shipping CO2
- 4 years waiver clause for Administrations
in need of more time
• Regulation 20 Attained EEDI • Regulation 21 Required EEDI • Regulation 22 SEEMP for all ships (400 GT)• Regulation 23 Promotion of technical co-operation
and transfer of technology relating to the improvement of energy efficiency of ships
g of CO2 emitted
cargo capacity x speed Attained EEDI ≦ Required EEDI values
Energy Efficiency Design Index - EEDI
-10% ships built between 2015 – 2020-20% ships built between 2020 – 2025-30% ships built between 2025 – [2030]
Required EEDI – Regulation 21
Ship Type SizePhase 0
1 Jan 2013 –31 Dec 2014
Phase 11 Jan 2015 –31 Dec 2019
Phase 21 Jan 2020 –31 Dec 2024
Phase 31 Jan 2025
and onwards
Bulk Carrier
20,000 DWT and above
0 10 20 30
10,000 – 20,000 DWT n/a 0-10* 0-20* 0-30*
Gas carrier
10,000 DWT and above
0 10 20 30
2,000 – 10,000 DWT n/a 0-10* 0-20* 0-30*
Tanker
20,000 DWT and above
0 10 20 30
4,000 – 20,000 DWT n/a 0-10* 0-20* 0-30*
Container ship
15,000 DWT and above
0 10 20 30
10,000 – 15,000 DWT n/a 0-10* 0-20* 0-30*
General Cargo ships
15,000 DWT and above
0 10 15 30
3,000 – 15,000 DWT n/a 0-10* 0-15* 0-30*
Refrigerated cargo carrier5,000 DWT and above 0 10 15 30
3,000 – 5,000 DWT n/a 0-10* 0-15* 0-30*
Combination carrier
20,000 DWT and above
0 10 20 30
4,000 – 20,000 DWT n/a 0-10* 0-20* 0-30*
Reduction factors (in percentage) for the EEDI relative to the EEDI Reference line
19
Ship Energy Efficiency Management Plan Ship Energy Efficiency Management Plan SEEMP -SEEMP - Onboard management tool
Monitoring of emissions and energy performance of individual ships and encouraging continues improvement, using the operational indicator (EEOI) as monitoring tool and benchmarking
Improved voyage planning (Weather routeing/Just in time)
Speed and power optimization (single most important issue)
Optimized ship handling (ballast/trim/use of rudder and autopilot)
Improved fleet and ship management - utilization
Improved cargo handling
Energy management
Energy Efficiency Operational Energy Efficiency Operational Indicator - EEOIIndicator - EEOI
• MRV tool and benchmark for individual ships
A ship specific efficiency indicator to be used by all ships in operation (new and existing) obtained from fuel consumption, voyage data (miles) and cargo data (tonnes)
Cargo OnboardCargo Onboard x x (Distance traveled)(Distance traveled)
Fuel Consumption in OperationFuel Consumption in Operation=
Actual FuelActual FuelConsumptionConsumption
IndexIndex
Guidelines adopted by MEPC 63 (March 2012)
2012 Guidelines on the method of calculation of the attained Energy Efficiency Design Index (EEDI) for new ships
2012 Guidelines for the development of a Ship Energy Efficiency Management Plan (SEEMP)
2012 Guidelines on survey and certification of the EEDI Guidelines for calculation of reference lines for use with the EEDI
MEPC 64 continued work in accordance with the work plan for technical and operational measures for ship types and propulsion systems not covered by the current EEDI formula
EEDI and SEEMP EffectsEEDI and SEEMP Effects
Results of analytical study by Lloyds Register and DNV, commissioned by IMO. Document MEPC 63/INF.2
2020 - Combined effects103 – 200 mill tonnes CO210 – 17% reduction over BAU$20 – 80 bill fuel savings
EEDI and SEEMP EffectsEEDI and SEEMP Effects
2030 - Combined effects237 – 423 mill tonnes CO218 – 26% reduction over BAU$90 –310 bill fuel savings
Results of analytical study by Lloyds Register and DNV. Doc MEPC 63/INF.2
EEDI and SEEMP EffectsEEDI and SEEMP Effects
Results of analytical study by Lloyds Register DNV. Document MEPC 63/INF.2
Combined effectsover BAU2020: 10 - 17%2030: 18 – 26%[2050: 35 – 41%]
Effects of amendments
• 2020 – combined effects of EEDI and SEEMP
103 - 200 million tonnes of CO2
10 – 17% reduction over BAU
US$ 20 – 80 billion annual fuel cost savings• 2030
237 - 423 million tonnes of CO2
18 – 26% over BAU
US$ 90 – 310 fuel cost savings• 2050
706 – 1320 million tonnes of CO2
35 – 41% reduction over BAU
Following the adoption, IMO commissioned a study from LR/DNV to estimate the effects, document MEPC 63/INF.2
Breakthrough at IMOBreakthrough at IMO“This is a landmark for the Organization, which has now made a positive contribution to worldwide efforts to stem climate change and, indeed, a landmark for the international community since, for the first time in history, it has been possible to legislate GHG emission reductions for an entire industry sector”
E.E. MitropoulosIMO Secretary-General
“…..this underscores the fact that IMO is best positioned to play a leadership role in addressing greenhouse gas emissions from international shipping.”
Ban Ki-MoonUN Secretary-General
“I would like to congratulate IMO on this outstanding result….The adoption of mandatory efficiency standards for international shipping is a major step and a substantial contribution….”
Christiana FigueresUNFCCC Executive Secretary
Capacity building needs
Preliminary assessment presented to MEPC 61 Training of flag State and port State control officers Training of seafarers in use of new technologies Instil in the industry an energy efficiency culture IMO’s Integrated Technical Co-operation Programme
for the 2012-2013 biennium allocated funding for the first round of training activities to be undertaken before the entry into force of the amendments
Capacity building activities Workshops on CO2 emissions from shippingRegional and national workshops on awareness raising and knowledge sharing to enhance global implementation and to enable States to take appropriate actionsRegional and national workshops on energy efficient ship operation for ship and shore based personnelRegional and national workshops on energy efficient ship design for administrations, academia and industryRegional workshops on port State control procedures and regulations related to energy efficiency and air pollution regulations under MARPOL Annex VI
Technical Cooperation and Capacity Building activities planned for 2011 – 2013
related to EEDI and SEEMPModel course for energy efficient ship operation developed by WMU – Finalized and issued in 2011. To be used for officers training by education institutes and the industry, important for future training
Capacity building:
$650,000 for training activities (e.g. EEDI verifiers)
$200,000 for fellowships and $200,000 for workshops
First awareness raising workshop in Durban 24 – 25 November
Agreement with KOICA for a South East Asian Climate Capacity Building Partnership in Maritime Transport - $700.000 for 2011 - 2013.
First workshop held in Singapore 16 – 18 November 2011
A total of 12 workshops in the region 2012 – 2013
Dialog with donors for a global project: $10 – 40 millions
Transfer of technology, technical assistance Transfer of technology, technical assistance and capacity building on energy efficiencyand capacity building on energy efficiency
Transfer of technology covered in many IMO instruments, regulation 23 of new Chapter 4 goes beyond similar obligations in other treaties as it encourages cooperation bilaterally, through IMO or other organizations
Transfer of technology outside IMO’s ITCP
Work on draft resolution together with the regulatory text with the intention to adopt them as a package, not possible to reach consensus, still pending, needs to be resolved urgently
MARPOL Annex VI coverageMARPOL Annex VI coverageNumber of flag States
Gross tonnage Total
World total 162 957,981,010 100%Annex VI countries
64 861,474,101 89.96%
Breakthrough at IMOBreakthrough at IMOAdopted by majority as full consensus could not be reached Adopted by majority as full consensus could not be reached despite strenuous efforts, however no division between despite strenuous efforts, however no division between developing and developed countries (Non-Annex I/Annex I).developing and developed countries (Non-Annex I/Annex I).
The majority of developing countries eligible to vote The majority of developing countries eligible to vote supported the adoption, including all LDC and SIDSsupported the adoption, including all LDC and SIDS
Number of countries
Gross tonnage Total
Yes 49 757,412,533 79.06%No 5 97,083,482 10.13%
Abstain 2 4,877,396 0.51%Not present 8 4,448,076 0.46%
Non-Annex VI countries
98 96,506,909 10.04%
World total 162 957,981,010 100%
33
Will the EEDI and SEEMP be enough?They probably would if demand for shipping stopped growing. BUT…
-World trade is likely to keep increasing
-Emerging economies generate need for shipping
-Developing countries depend on sea transport for development
So, the reductions achieved by EEDI and SEEMP may be offset by increase in world trade and need for sea transport
That’s why we need a market-based measures
Market-based reduction measures – MBMMarket-based reduction measures – MBM
An MBM under IMO would serve two main purposes• An economic incentive for enhanced energy-efficient both
trough design and operation (in-sector reductions)• Off-setting in other sectors (out-of-sector reduction)
10 MBM proposals by governments and NGOs under reviewCharges, ETS, Efficiency based, Incentive Schemes, Rebate Mechanism
Three main streams:Three main streams:
GHG Fund: Offsetting above a target line
ETS: 100% auctioning (global/national)
- remaining proceeds: R&D, TC, improve port/maritime infrastructure in developing countries, Climate Finance
Efficiency based (EEDI): Closed trading of credits
MBM Expert Group established by MEPC 60MBM Expert Group established by MEPC 60
The analysis of the proposed MBM addressed, inter alia:
Environmental effectiveness, cost-effectiveness and potential impact on trade and sustainable development
Incentives to technological change and innovation
Practical feasibility and the need for technology transfer to and capacity building within developing countries, mobilizing climate financing
Relation with other conventions (UNFCCC, Kyoto Protocol and WTO) and compatibility with international law and IMO’s regulatory framework
Additional administrative burden and legal aspects for National Administrations
The potential additional workload, economic burden and operational impact for individual ships, the shipping industry and the maritime sector
MBM Expert Group established by MEPC 60MBM Expert Group established by MEPC 60
Developed methodology to asses, inter alia, possible impacts on end consumers and selected industries, in particular in developing countries, and analyzed 10 MBMs proposed by Governments/ NGOs
Selected commodities and trades:
Iron ore (Dirty Bulk) – Crude oil (Tankers) – Grains (Clean Bulk) –
Clothing and furniture (Container)
Assumptions and growth scenarios:
Size and composition of world fleet – growth scenarios (IPCC A1B: 1.65% and B2: 2.8%) – fuel and carbon prices – uptake of technology – etc.
Elasticity estimates of freight rate to fuel price increase:Source Clean Bulk Dirty Bulk Tanker Container
IMO (MBM-EG) 0.25 0.959 0.324 0.116UNCTAD - 1.0 0.28 0.19 – 0.36
OECD 0.28 - - -
SIDS
SIDSSIDS
SIDSSIDS
SIDS
SIDSSIDS
SIDS
SIDS
SIDS
0 2,000 4,000 6,000 8,000
Czech RepublicMalta
AustriaHong Kong
TurkeyBarbados
United KingdomNicaragua
AzerbaijanHungary
SwitzerlandAlgeria
El SalvadorIceland
MaldivesCape Verde
PolandCyprus
ItalyGuatemala
GeorgiaColombia
Syrian Arab RepublicMexicoGreece
SlovakiaIreland
SwedenTrinidad and TobagoDominican Republic
SpainJamaica
MoroccoArubaBelize
NetherlandsHondurasDenmarkBulgariaCroatiaEstonia
DominicaGreenland
NorwayFranceSerbia
BelgiumSlovenia
MongoliaMontserrat
CanadaMacedonia (the former …
PortugalTunisia
Russian FederationAlbania
LatviaLithuania
Faroe IslandsBermuda
Turks and Caicos IslandsLuxembourg
Moldova, Rep.ofBelarus
Bosnia and HerzegovinaBahamas
nautical miles
Nautical Distance Weighted by Bilateral Trade (#2 of 2)
Nautical distance weighted by bilateral trade
LDC
LDC
LDC
LDC
LDC
LDC
LDCLDC
LDC
LDCLDC
LDCLDCLDC
LDC
LDC
LDC
SIDSSIDS
SIDS
SIDS
SIDS
SIDS
SIDS
SIDS
0 2,000 4,000 6,000 8,000
French PolynesiaNew Caledonia
ChileSouth Africa
AustraliaBrazil
BangladeshNew Zealand
NigeriaMadagascar
QatarArgentina
GhanaMauritius
TogoPeru
Saudi ArabiaUnited Arab Emirates
ChinaJapan
BoliviaNigerIndia
Sri LankaThailandPakistan
KoreaKenyaIsrael
UruguayTanzania, United Rep. of
OmanFiji
EthiopiaMalaysia
SudanYemen
PhilippinesGuinea
Viet NamUgandaZambia
SingaporeCôte d'Ivoire
Macau (Aomen)United States of America
MozambiqueSenegal
MaliSolomon Islands
NamibiaMalawi
LebanonJordan
Costa RicaBurundiEcuador
VenezuelaRwandaGuyanaPanama
ArmeniaFinland
VanuatuGermany
nautical miles
Nautical Distance Weighted by Bilateral Trade (#1 of 2) MBM-EG concluded that those countries most affected would be those furthest away from their trading partners
Cereals Ores Crude Oil Manufactured Impact 0.16%11% 20% 13% 5%
Ad valorem maritime transport cost Australia
Ad valorem maritime transport costs for ChileCereals Ores Crude Oil Manufactured Impact 0.26%
27% 20% 6% 5%
Average global increase in freight costs equal to a 10% fuel price increase by introducing MBM
Clean Bulk Dirty Bulk Tanker Container2.7% 9.8% 3.0% 2.0%
Impact Study by MBM-EG
Cost pass-through range from 10% cent to over 100% - Great variations between different trades, e.g., ore/containersProduct market
Cost pass-through (%)
Product market
Cost pass-through (%)
Wheat South Africa
10–40Iron ore China*
52
Wheat Kenya 50–75 Furniture EU 60–90
Wheat Algeria
50–75 Apparel EU 10–40
Barley China 10–25Crude oil
South Korea*111
Rice Philippines
5–20Crude Oil
US*73
Maize Saudi Arabia
90–100
Shipping market
Vivid Economics estimates
(average for all routes)
UNCTAD estimates
Panamax grain 0.19 N/A
Capesize ore 0.96 1.00
Containers 0.12 0.19-0.36
VLCC 0.37 0.28
Emission reductions in 2030 Emission reductions in 2030 Modelled emission reductions across various scenarios
SECT VES Bahamas GHG Fund
LIS PSL ETS (Norway France)
ETS (UK)
RM
Mandatory EEDI (Mt)
123 -299
123 -299
123 -299*
MBM In sector (Mt)
106 -142
14 -45
1 -31
32 -153
29 -119
27 -114
27 -114
29 -68
MBM Out of Sector (Mt)
152 -584
190 -539
190 -539
124 -345
Total reductions (% BAU)
19 -31%
13 -23%
10 -20%
13 -40%
3 -10%
2 -8%
13 -40%
13 -40%
13 -28%
Potential supplementary reductions (Mt)
45 -454
104 -143
232 -919
917 -1232
696 -870
187 -517
* Included if the mandatory EEDI is adopted by the committee
Potential climate change financing* Potential climate change financing*
Modelled “remaining proceeds” across various scenarios MBM 2020 ($ billion) 2030 ($ billion)
GHG Fund 2 - 5 4 - 14
LIS 6 - 32 10 - 87
PSL 24 - 43 40 - 118
SECT 0 0
VES 8 - 41 5 - 18
ETS (Norway, France) 17 - 35 28 - 87
ETS (UK) 0 0
Bahamas 0 0
RM 10 - 13 17 - 23
* Excludes financing of out-of-sector emission reductions
Impacts on consumers depend on stringency of MBM, e.g. the carbon price, if it is equal to a 10% increase in fuel price, it means a 2 – 10% increase in transport costs and an increase of 0.0 – 0.2% on end prices
Trading distances - Market share Domestic Domestic production - Value-to-weight ratio
Impacts on developing countries wImpacts on developing countries will vary by country independent of level of economic development. As a result, developing countries, especially SIDS and LDCs, should not be treated as a collective bloc in assessing impacts
MEPC (65) will continue work on MBMs and on further impact studies with a view to select a suitable instrument in 2015
Impacts of an MBM – Conclusions:
The needs and circumstances of developing The needs and circumstances of developing countries in the context of climate financecountries in the context of climate finance
There will be impacts from introducing and MBM, but they will be dwarfed by increases in energy and food prices
Compensating affected consumers and industries cent by cent is not possible, a workable proxy is needed
An MBM is intended to drive behavioural change – any compensation will undermine this purpose
To use 25 – 40% of revenues to compensate all developing countries by the same key will deprive the most vulnerable countries/peoples for large climate finance opportunities
A targeted approach needed where only those most affected will be compensated (threshold/GDP per capita)
IMO’s MBM impact study to continue IMO’s MBM impact study to continue
Emissions(Mt)
Costs($billion)
Seaborne Imports($billion)
Costs/Imports(%)
870 17.4 9.393 0.19%
MEPC 65 (May 2013) will continue work on MBMs and on further impact studies, selection of instrument 2015
Australia Chile0.16% 0.26%
Impact on import costs = 10% fuel price
MBM cost in relation to world imports
44
IPCC Fourth Assessment Report (FAR)
- A 1ºC to 2C increase in temperature above 1990 levels will place many unique and threatened systems, including many biodiversity hotspots, at significant risk.
- A global mean temperature increase of more that 2C will lead to increasing risk of species extinction and climate havoc
-The CO2 concentration must not exceed 450 ppm to keep the global warming within 2C above 1990 level by 2100
To avoid this, CO2 emissions must peak
within 10 – maximum 15 years
What is the consensus view of the world’s most eminent
scientists?
150
200
250
300
350
400
450
500
550
600
650
700
Years Before Present(B.P. -- 1950)
CO
2 C
on
cen
tra
tio
n (
pp
mv)
Current(2001)
0100,000200,000300,000400,000
The World’s challenge:Increasing CO2 concentrations
150
200
250
300
350
400
450
500
550
600
650
700
150
200
250
300
350
400
450
500
550
600
650
700
Today 2005
Expected in 2100
Source: IPCC FAR 2007
46
What is the world community doing?First step: Adoption of the United Nations
Framework Convention on Climate Change (UNFCCC) in 1992.
- Aimed at stabilizing atmospheric concentrations of greenhouse gases to avoid “dangerous anthropogenic interference” with the climate system.
Second step: Adoption of the Kyoto Protocol in 1997
- Commits developed countries (Annex I Parties) to reduce their overall emissions by an average of 5.2% below 1990 levels between 2008-2012.
Third step: Bali Action Plan – Copenhagen Accord – Cancun Agreements – Durban Platform (2011)
- Universal legal treaty covering all parties, to be adopted by 2015 and in force by 2020
47
UNFCCC debate on allocation of emissions from international shipping 1992 - 1997
1 No allocation
2 Proportional to national emissions
3 Fuel sales
4 Nationality of company
5 Flag
6 Route of vessel
7 Route of cargo
8 Country of origin of cargo
9 Emissions in territorial waters
Kyoto Protocol Article 2.2“The Parties included in Annex I
shall pursue limitation or reduction of emissions of greenhouse gases not controlled by the Montreal Protocol from … marine bunker fuels, working through … the International Maritime Organization, …”
Flag States Number of ships GT DW
Annex I 33.4% 26.1% 22.82%
Non-Annex I 66.6%) 73.9% 77.18%
Distribution of the world fleet March 2008Distribution of the world fleet March 2008 ships above 400 GT
Article 1(b) of the IMO ConventionEncourage removal of discriminatory actions … promote the
availability of shipping without discrimination … not be based on measures designed to restrict the freedom of shipping of all flags ..;
Shipping under UNFCCC
•How should the balance between the basics principles under the two conventions be expressed in the new treaty text (UNFCCC and its fundamental CBDR principle, and on the other hand, the IMO constitutive Convention with its non discriminatory approach)?
•Should the new UNFCCC treaty state how revenues from a market-based instrument for international shipping under IMO should be distributed and used (climate change purposes in developing countries)?
•Should a reduction target be set for international shipping, and if so, what should the target be and should it be set by UNFCCC or IMO?
No text on international shipping in the Durban outcome other than to continue address the issue
Consultations in UNFCCC is slow and has not lead to an agreed text as there are three challenging obstacles:
Links with and effects on UNFCCC negotiations
As the regulations address ships and not States, and as they do not impose any reduction obligations, quantified or otherwise, on States, as well as the fact that the cost of introducing EEDI/SEEMP will be borne by the industry, there are no incompatibility issues with UNFCCC
Kyoto Protocol’s Article 2.2 is still interpreted differently by Parties
Did adoption of mandatory T&O by MEPC 62 settle the issue?
Disbursement of revenues from an MBM for international shipping under IMO is seen by many as a way to accommodate both sets of principles under the two conventions:
- CBDR under UNFCCC and non-discrimination under IMO
An MBM for international shipping could be a predictable source to the Green Climate Fund and thereby facilitate the UNFCCC negotiations
Climate Finance under UNFCCC
The Copenhagen Accord noted the need for climate finance$30 billions annually 2010 – 2019 and $100 billions annually from 2020
The AGF report highlighted international shipping as a suitable and predictable source for climate change funding.$ 3 – 8 billions from international shipping – work should continue in IMO
The Cancun Agreements agreed a process to establish the Green Climate Fund which was formally established in Durban and made operational by 2012 under the World Bank, process to identify funding sources in 2012
G-20 requested WB/IMF to explore potential sourcesReport to be considered by Ministers of Finance early November for submission to Durban. Elaborates on possible approaches but focuses on taxation not on the combined effect of an MBM: reduction and finance
Durban outcome affecting IMO’s work Durban outcome affecting IMO’s work
Reported in MEPC 63/5/5
The mandate of AWG-LCA extended by another yearInternational transport part of mitigation under Sectoral ApproachesSeven options for text on international transport in new treaty or COP decision
Establishment of the Green Climate FundWork programme under LCA to identify sources (public and private)Several proposals to use international shipping as source (AGF and G20)Direct links with IMO’s MBM work – proposed text on “no net incidence”
Agreement on Carbon Capture and Storage as CDMSub-seabed carbon storage regulated by the London Protocol
Summary - IMO’s GHG Work
• Mandatory technical and operational measures adopted in July 2011 – in force 1 January 2013
Important step - Energy efficiency standard for new ships, operational measures for all ships - Significant reductions
• MBM for international shipping under IMO
Continued development - Possible adoption of treaty in 2015 • Climate Finance and the Green Climate Fund may
be the key to unlock the UNFCCC/IMO deadlock
Application to all ships via IMO is the only way to raise revenues from international maritime transport (precedence in IOPC)
www.imo.org
