“ “ Revision of Marpol Annex VI and its Revision of Marpol Annex VI and its implications for the Gulf regionimplications for the Gulf region ””

Peter M. Swift, MD, INTERTANKO

15 December 2008, Dubai

“ “ Revision of Marpol Annex VI and its implications Revision of Marpol Annex VI and its implications for the Gulf regionfor the Gulf region ””

Air Emissions from ShippingAir Emissions from Shipping

- observations on process and - observations on process and practical aspectspractical aspects

Air Emissions from Shipping

• Classical Pollutants – SOx, NOx, PM

[MARPOL Annex VI]

• Green House Gases – GHGs, principally CO2

MARPOL Annex VI: Evolution (Regulatory)

• Origins in IMO in early 1990s• Annex VI adopted in 1997• Annex VI entered into force in 2005 –

revisions proposed immediately thereafter• EU Sulphur Directive in 1999 & Thematic

studies (2000+) set unilateral challenge• California (2005) led US programmes• Local legislation emerged in Norway et al,

and pending in Japan et al

MARPOL Annex VI: Evolution (Political)

• Environmental impact of SOx, NOx, PM often local / regional rather than global

• Environmental Lobby coordinated and effective

• Shipping Industry support for change initially very limited– Many reactive, few pro-active, some very anti

• Economic drivers mostly negative

– Extra costs for refiners and owners

Annex VI Amendments : in summary

• Compromise accepted by all with adoption in 2008 – tacit approval procedure means entry into force on 1 July 2010

• New regulation on SOx and by default on PM• Primary compliance through fuel• Alternative methodologies (e.g. scrubbers) accepted as

Equivalent Measures (but first to be approved by Administrations)

• Marine fuel oil quality to be further improved• No measures to be taken against ships that do not

receive adequate supply• Guidelines how to assess compliance if BDN data is

challenged by PSC or test results • NOx Tier I on large engines already from the 1990s• NOx Tier II and Tier III on new engines

MARPOL Annex VI Amendments

GLOBAL

S cap

ECA

S cap

Tier II Tier III

ECA only

2010(July 1 st)

4.50% 1.00% - - - - - - - - - -

2011 yes - - - - -

2012 3.50% - - - - -

2015 0.10% - - - - -

2016 yes

2020 /

2025

0.50%

Annex VI: SOx Regulations

New ECA areas could be?:USA West CoastMediterranean Others?

Particulate matter regulated by the sulphur content of the fuel or by scrubber technology

[3335624.19.05.2008 LS/KEA] 8

NOx emissions – Tier II (new engines)

• Tier II standards (emission reductions related to Tier I limits):– 15.5% reduction (engines with n<130 rpm) (i.e. 14.36

g/kWh)– reductions between 15.5% and 21.8% depending on the

engine’s rpm (engines with 130 rpm < n < 2000 rpm)– 21.8% reduction (engines n > 2000 rpm) (i.e. 7.66 g/kWh)

• Applies to engines installed on ships constructed on and after 1 January 2011

NOx emissions-Tier III (new engines)

• Tier III standards – 80% reductions from Tier I limits, applicable when ships in ECA only

• Tier III limits apply to engines:– installed on ships constructed on & after 1 Jan 2016– power output of > 130 kW

(but engines between 130 kW – 750 kW may be exempted by the Administration)

• Outside ECAs - Tier II limits only• Emission levels for Tier III are as follows:

– 3.40 g/kWh (engines with n<130 rpm)– 9*n(-0.2) g/kWh (engines with 130 rpm < n < 2000 rpm)– 1.96 g/kWh (engines n > 2000 rpm)

Annex VI Amendments: In summary

• Compromise - positive but not perfect

• Positives:–avoids fragmented regional legislation–contributes to a long-term and predictable

global regulatory regime–ensures a solid platform of requirements –is realistic and feasible–achieves a global, long-term and positive

reduction of air emissions from ships

But

Regional Requirements- Still a potential problem

Planned new ECAs (for 2013) ?

Could be extended to entire N. A.

Up to 200 nm on the West Coast

Plan to require 0.1% or 0.2% S fuels

Global / Regional Sulphur cap

GLOBAL ECA EU (in port)

California

(24 nm)

2010

(July 1st)

4.50% 1.00% 0.10% 0.50%

2012 3.50%

2015 0.10%

2020/2025 0.50%

Some practical problems remain

• Still need to use 2/3 fuels per voyage for few more years

• Need for two differing cylinder lube oil systems (one for HSFO and one for LSFO/Distillate)

• Fuel quality issues, especially with blending of LS fuels

• Incompatability and other problems during change overs

• Safety and cross-contamination issues when switching from HFO to MDO in boilers (EU and California)

Green House Gas (CO2) Emissions

• Driven primarily by a limited number of governments– Supported mostly by EU governments, plus Japan,

Australia and a few others– Only limited support in US (mostly environmental

interests)– Very little enthusiasm in much of the developing world

• Environmental Lobby growing– Not yet fully coordinated

• Maritime industries showing considerable support– Proactive involvement – Although “hesitant” on market based instruments

• Economic incentives strong– High cost of bunker fuel / softening freight markets

16

The Good News : CO2 Emissions per Unit Loadby Transport Mode

Source: Ministry of Land, Infrastructure and Transport (Japan): The Survey on Transport Energy 2001/2002MOL (Japan): Environmental and Social Report 2004

Large Tanker

Large Containership

Railway

Coastal Carrier

Small-size Commercial Truck

Airplane

Standard-size Commercial Truck

100 200 300 400

398

226

49

11

6

3

1

0

Units Relative

The Good News:Shipping’s GREEN Credentials

• This car, weighing one tonne, uses 1 litre of fuel to move 20 kms

• This oil tanker uses 1 litre of fuel to move one tonne of cargo 2,500 kms

– more than twice as far as 20 years ago

The Good News : VOC EmissionsVoluntary/Regulatory Measures

• Tanker industry introduced voluntary measures to reduce VOC emissions from cargo on passage in 2002 – cutting these by approximately 80%

• IMO MARPOL Annex VI revisions will incorporate these in 2008, and take effect in 2010

GHG reductions: Voluntary Measures already underway

• Speed optimisation

• Voyage optimisation

• Capacity optimisation

GHGs : IMO Regulatory Development

IMO voluntary operating index since 2004

Ship Performance Index: CO2 / work done

IMO developing:

For New Ships : Design Index (Mandatory)

Best practice guidance on measures to reduce CO2 emissions (Ship Efficiency Management Plan)

and

For Ships in Service : Operational Index (Non-mandatory)

IMO initiated GHG work in 1998IMO2000 GHG study, updated 2008

SEMP Drafted

1. Programme for Measuring and Monitoring Ship Efficiency2. Voyage Optimization Programme

1. Speed selection optimization2. Optimised route planning3. Trim Optimization

3. Propulsion Resistance Management Programme1. Hull Resistance2. Propeller Resistance

4. Machinery Optimisation Programme1. Main Engine monitoring and optimisation2. Optimisation of lubrication as well as other machinery and equipment

5. Cargo Handling Optimization1. Cargo vapours control procedure on all crude tankers (80-90% reduction of

cargo vapours)2. Cargo temperature control optimization

6. Energy Conservation Awareness Plan1. On board and on shore training and familiarisation of company’s efficiency

programme2. Accommodation-specific energy conservation programme

162

168

174

20 30 40 50 60 70 80 90 100 110 % SMCR

Engineshaft power

SFO

C

ME/ME-C 100% SMCR optimised

MC/MC-C 100% SMCR optimised

ME/ME-C Part load optimised

3-4g/kWh

Economy mode:

3-4g/kWh

Optimising speed and voyage schedule

http://www.ocimf.com/view_document.cfm?id=1147

• Liaison encouraged between owners and charterers to optimise vessel speed and voyage schedules

Market Based Instruments

• Bunker Levy / Compensation Scheme• Emissions Trading Scheme• Other, e.g. differentiated charges

Guiding principles: any measure should:• Be effective in reducing global GHG emissions• Be binding on and applicable to all flag states• Be cost effective• Not (significantly) distort competition• Support sustainable environmental development without

penalising trade growth• Promote technical innovation and leading technologies• Be practical, transparent, fraud-free, easy to administer

THANK YOU

“Proud of our people, Proud of our ships”

For more information, please visit:

www.intertanko.com www.maritimefoundation.com

www.poseidonchallenge.comwww.shippingfacts.com

Hebei Spirit – A plea for justice

Captain Jasprit Chawla & Chief Officer Syam Chetan

of Hong Kong-based tanker Hebei Spirit

Regulation 4 – Equivalent measures

• An Administration may allow any alternative method only if this is at least as effective in terms of emissions reductions as the emission reductions by using LSFO

• This means the Administration (and not the ship) have to acknowledge that alternative methods:– have equivalent efficiency in terms of SOx, PM &

NOx– do not harm the environment – operate within the requirements of the IMO

guidelines

Regulation 15Volatile Organic Compounds

• All tankers carrying crude oil shall have on board an approved VOC-Management Plan describing all the procedures the ship is applying in order to minimize the emissions of VOC

• Apart from that, there is no requirement for equipment or technical installations to limit the emissions

• Work is underway to a draft VOC Management Plan model to be submitted to IMO