Leading the way; making a difference GHG EMISSIONS FROM SHIPS OPERATIONAL EFFICIENCY STANDARDS FOR...

Leading the way; making a difference

GHG EMISSIONS FROM SHIPS OPERATIONAL EFFICIENCY STANDARDS FOR INTERNATIONAL SHIPPING

LATIN AMERICAN PANEL

Buenos Aires5th November 2014

Dragos Rauta INTERTANKO


BACKGROUND Climate Change/GHG Emissions – HIGH level political item

Kyoto Protocol – Regulatory frame work through UNFCCC – Parties commit to emissions reductions targets:

• primarily through national measures . . . . . . but also • through additional Market Based Measures (MBMs)

Due to their international character, Aviation & Shipping not included in the Kyoto Protocol

UNFCCC agreed measures are taken through ICAO and IMO, respectively

ICAO decision: to suggest an Emission Trading Scheme (ETS) for aviation by 2016 with enforcement in 2020


IMO Decisions

• Mandatory Energy Efficiency Design Index (EEDI) for new buildings (1 January 2013) & Ship Energy Efficiency Management Plan (SEEMP) for all ships

• SEEMP does not set a target for GHG emissions reduction of ship in operations

• IMO considered Market Based Measures (MBMs) for shipping but thus far, no agreement

• Alternative: Amendments to MARPOL Annex VI to assess Energy Efficiency of ships in operation


OPERATIONAL EFFICIENCY STANDARDS FOR INTERNATIONAL SHIPPING

WHAT DOES IT MEAN?

IN PRINCIPLE, SHIPS IN OPERATIONS WOULD BE EXPECTEDTO MEET A LEGALLY – BINDING OPERATIONAL EFFICIENCY

ORLIMIT SHIPS’ ANNUAL FUEL CONSUMPTION

KEEP IN MIND: THIS IS JUST A PROPOSAL


OPERATIONAL EFFICIENCY STANDARDS

The Concept: Three step phase-in legislation

• Phase I – data monitoring, reporting and verification

• Phase II – trial period for verification of enforceability of the set target

• Phase III – enforcement

The Proposals:

@ IMO by: USA, Japan, Germany and EU(item called: further technical and operational measures for enhancing energy efficiency of int. shipping)

Regional: European Commission (proposed regulation called Monitoring, Reporting and Verification (MRV))


PROPOSED SCHEMES at IMO

USA - Ship Efficiency Credit Trading (SECT)Data to be used: (a) joules of energy of fuel used & (b) ships’ service hoursMeasure: Efficiency measured on joules/service hours; Target: to be defined

Japan - Annual Efficiency Ratio (AER)Data to be reported: (a) fuel consumption & (b) distanceMeasure: Annual AER value calculated with a “standard cargo” (vessel’s max. DWT)

AER = total (annual) fuel consumption / total (annual) distance / DWTTarget: to be defined

Germany - Fuel Oil Reduction Strategy (FORS)Data to be used: (a) installed power (b) average SFOC (c) average annual operational time & (d) average annual cargo carried.Measure: Reference Fuel Consumption for a ship type and size:RFC = (Installed Power) x (~ SFOC) x (~ operational time) x (~ cargo carried)Target: Standard required = RFC x (1 – Reduction Target in %)reduction target in% yet to be defined

What if not compliant? not addressed by any of the proposals


CURRENT SITUATION @ IMO

No agreement for the development of an operational efficiency model for ships

This will be discussed at a later stage, after assessing the data collected

Continue to work on a draft text for a mandatory data collection

The further work to be done by a correspondence group (CG)



Data collection from ships of > [5,000] DWTData which could be collected:

identify the ship (name of the ship, IMO number, flag State and registered owner)provide technical characteristics of the ship (ship type, GT, NT, DWT, engine power, reference/design speed, EEDI (if applicable) and ice class (if applicable))provide total annual fuel consumption per fuel type Agreed to not include any other data such as total distance travelled, total service hours and total cargo carried over one yearA decision on this type of data to be taken after IMO/MEPC has had a full policy debate in order to explore possible consensus of any additional measures except fuel consumption data reporting



Data reported to a centralised database managed and paid for by IMOReporting system to be established by the FlagAnnual Report in electronic formatDefinition of the “annual reporting period” to be developed by the CG Ships maintain annual reports onboard and make it available to their Flag, if requestedCG will not discuss whether data should be made public; this will be discussed further by MEPC at a later stage


Industry Submission @ MEPC 67

Agreeing with data collectionChallenging the need, the justification and the feasibility of a legally-binding operational efficiency for shipsFuel efficiency standards for entire transportation sectors applied at design stage; IMO adopted EEDINo other transportation sector subjected to operational efficiency standards Operational efficiency standards account for many and complex criteria: not practical as a regulatory standard Costs of fuels, costs for compliance with ECA and global S cap are great incentives for fuel emissions reductionsList of key questions IMO should answer before deciding


Applicability: All ships > 5,000 GRT calling to EU ports

Reporting CO2 emissions when ships travel:

• between EU ports, • an incoming voyage from a non-EU to an EU port• an outgoing voyage from an EU port to a non-EU port

Data to be reported: fuel consumption, distance and cargoReporting in accordance with a Ship’s Monitoring Plan

Measure: monitor the ship’s average energy efficiency at least with the following criteria:

Total annual CO2 emissions / total annual distance travelled

Total annual CO2 emissions / total annual transport work

EU REGIONAL PROPOSAL on MRV


EU REGIONAL PROPOSAL on MRV

Proposed Dates for implementation:

1 July 2015 – enter into force

31 August 2017 – companies submit Monitoring Plan to “verifiers”

1 January 2018 – starts first annual reporting period

2019 and after

– by 30 April each year, companies shall submit a verified emissions report to the European Commission and to the flag State

– by 30 June each year, the European Commission will make the emissions reported by ships publicly available

EU Commission, EU Parliament and EU Council initiated the trialogue negotiations on 15 October

The proposed MRV regulation could be ready for adoption for July 2015 but . . . . . . . mostly on data collection


INTERTANKO COMMENTS ON MRV

MRV should be discussed at IMO - Regional MRV will bring marginal benefit (shipping contribution to total GHG in EU < 0.50%)

Regulators must consider thoroughly data collected and assessment results before taking next step

There is no model to define a fair and concrete legal binding operational standard for ships

No problems with some data collection (aggregate annual values) Simplicity in data collection

Verifiers to be licensed and have shipping experience


MR

Aframax

Suezmax

VLCCs

0.00% 5.00% 10.00% 15.00% 20.00% 25.00%

19.45%

13.25%

15.82%

11.05%

Average improvements from the EEDI base line (new ships)

Source: IMO – MEPC 67/INF:4

TANKERS PERFORMANCE


2007 2008 2009 2010 2011 6.00

7.00

8.00

9.00

10.00

11.00

12.00

9.97

8.98 8.42

8.83

7.99

Cargo EEOI

Yearly improvement (index 2007) 9.86% 15.50% 11.40% 19.80%

SEEMP RESULTS


2007 2008 2009 2010 2011 20120.00%

0.50%

1.00%

1.50%

2.00%

2.50%

3.00%

3.50%

2.80%

2.90%2.70%

2.30%

2.40%

2.20%

INT. SHIPPING CONTRIBUTIONS TO GLOBAL CO2

Source: IMO 3rd GHG Study (2014)

Ships reduce GHG emissions at a higher rate than land


ACTUAL FUEL CONSUMPTIONS ON SISTER SHIPS

Ships can report annual aggregate fuel consumptions and aggregate values of some few other relevant transportation data

Naïve to believe it is realistic to establish fair and efficient legally-binding, fleet-wide operational efficiency standards


muchas gracias

[email protected]

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