Canadian Experience in Implementing the North American Emission Control Area (ECA)

Mexico City, Mexico

May 19, 2015

1. Human and Environmental Impacts of Maritime Emissions

2. Implementing the NA-ECA Internationally and Domestically

3. Stakeholder Engagement and Views

4. Alternative Compliance Options

5. Results and Enforcement

OVERVIEW

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• Emissions of sulphur oxides (SOX) are a significant contributor to health impacts associated with air pollution

• A key source of SOX emissions is sulphur in fuel

• Other modes of transportation already subject to stringent sulphur in fuel regulations

• Without mitigation, maritime shipping would represent a dominant share of transport-related SOX emissions in Canada by 2020

BACKGROUND: ADDRESSING MARINE EMISSIONS

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42%

58%

2002 2020

• Marine air pollutant emissions contribute to smog levels (O3 and PM2.5) in all Canadian provinces with commercial marine activities British Columbia Ontario Quebec Maritimes (East Coast)

• Since the majority of the Canadian population lives within these regions, human health and environmental impacts are significant

HUMAN AND ENVIRONMENTAL IMPACTS

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Influence of marine emissions on summertime ozone levels (top) and sulphur deposition levels (bottom) in Canada

2006: NA-ECA first agreed between Canada and USA at Head of State level

Following criteria of Appendix III to MARPOL Annex VI: Government of Canada modeled emissions and deposition over Canada Assessed public health impacts based on atmospheric modeling

IMPLEMENTING THE NA-ECA

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2009: ECA Proposal to Marine Environment Protection Committee (MEPC 59) USA, Canada and France (on behalf of the islands of St. Pierre and Miquelon) See IMODocs: MEPC 59/6/5 and MEPC 59/INF.13 USA led proposal as Canada was not yet a Party to MARPOL Annex VI

2010: MEPC 60 adopts Resolution MEPC.190(60) establishing the NA-ECA Canada ratifies MARPOL Annex VI at same meeting NA-ECA becomes enforceable internationally on August 1, 2012

2013:Vessel Pollution and Dangerous Chemicals Regulations amended to implement the NA-ECA in Canadian jurisdiction

IMPLEMENTING THE NA-ECA

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Transport Canada conducted extensive consultations with marine industry stakeholders throughout policy development and implementation process

• Cruise Sector Continually operate in ECA, concern for fuel bill increase Canada and USA worked together to evaluate alternative compliance proposals

• Ports and Port Communities Support health benefits of local ambient air quality improvement Concern for competition between ports for trade and cruise destinations Shipping companies have taken advantage of alternative compliance options

• International Shipping Limited time spent within ECA, general acceptance, concern for fuel availability Canada and USA developed policies on fuel non-availability

• Domestic Shipping Internal waters of Great Lakes, concern for fuel bill increase Canada developed alternative domestic regulatory regime – Fleet Averaging

STAKEHOLDER ENGAGEMENT AND VIEWS

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• MARPOL Annex VI allows for Flag States to approve alternative compliance options:

Regulation 3 - technology trials example: installing LNG propulsion systems

Regulation 4 - equivalent performance example: exhaust gas scrubber installation,

fleet averaging

• Practicalities

While Flag State is approving entity, NA-ECA partners of the view that consultation with ECA states is key to approval

Industry and Flag States have worked effectively with NA-ECA partners to ensure smooth implementation of alternative compliance options

ALTERNATIVE COMPLIANCE OPTIONS

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• Regulatory impact analysis estimates ~$1billion/year in net health benefits 96% reduction of SOX emissions as of January 1, 2015 plus associated PM reductions

80% reduction of NOX emissions from newly built ships as of January 1, 2016

• Alternative Compliance Mechanisms Fleet Averaging flexibility enabling spending on fleet renewal – over 25% of domestic

Laker fleet will be replaced by 2020 57 cruise ships installing sulphur scrubber systems 2 vessels installing LNG propulsion systems, several more planned

• Fuel oil Non-Availability Reports (FONAR) Procedure established by Canada and USA enabling ships to notify PSC if they were

unable to source NA-ECA compliant low-sulphur fuel Canada received 46 FONAR on Atlantic coast and 29 on the Pacific coast in 2014

• PSC Enforcement Activities 1275 Port State Control inspections in 2014, 7 MARPOL Annex VI related deficiencies Transport Canada is working with other ECA-sponsoring countries to harmonize

enforcement activities

RESULTS AND ENFORCEMENT

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Jeffrey SmithPolicy AnalystClean Air Policy and AnalysisEnvironmental Policy DirectorateTransport Canadajeffrey.smith@tc.gc.ca

Thank you! ¡Gracias!

QUESTIONS

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