latin american panel 13-14 september, 2010 lima, perú greenhouse gas emissions from shipping peter...
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Latin American Panel13-14 September, 2010
Lima, Perú
GREENHOUSE GAS EMISSIONSFROM SHIPPING
Peter M. Swift
Reducing Greenhouse Gas Emissions from Shipping
• Key Dates
• UNFCCC and IMO Programmes
• Market Based Mechanisms
• Industry Initiatives
UNFCCC = United Nations Framework Convention on Climate Change
Reducing Greenhouse Gas Emissions from Shipping
Selected Key Dates
12/2009 UNFCCC COP15 Meeting, Copenhagen
3/2010 IMO MEPC 602010 IMO MBM-Expert Group
IMO MEPC Intersessional (EEDI)2010 UNFCC Interim meetings------------
9/2010 IMO MEPC 6110/2010 INTERTANKO Council Meeting11/2010 UNFCCC COP16 Meeting, Cancun2010-2011 EU Council/Commission meetings----------5/2011 INTERTANKO Council Meeting7/2011 IMO MEPC 6212/2011 EU Deadline for IMO/International Agreement
2012 Kyoto Protocol expires
UNFCCC - COP15
What was the outcome ?
• NO targets• NO resolution of Kyoto/IMO Treaty conflict
• NO direct reference to international shipping in Copenhagen Accord
BUT in subsequent discussions:
Shipping is “expected” to make its “contribution” to Climate Change measures with $$$$ (UNFCCC et al)
International Aviation and Shipping should be regulated via UNFCCC and have targets as per other industries
(EU Parliament)
IMO Programme
To develop:
EEDI for new ships (Mandatory)
SEEMP (Mandatory) & EEOI (Voluntary) for all ships
and, if possible/needed:
Market Based Measures for shipping
IMO – UNFCCC Conflicting principles remains a major issue
IMO Principle:
“No More Favourable Treatment”
Versus
Kyoto Protocol principle:
“Common But Differentiated Responsibility”
IMO Intersessional Working Group
To improve the text for mandatory requirements of EEDI and SEEMP in terms of:
• coverage of ship types and ship sizes for the EEDI;• establishment of EEDI baseline(s); • frequency of reducing the mandatory value of EEDI
(reduction in 3 phases); • reduction rate from the baseline for the phases for the
EEDI;
To develop various guidelines:• on the method of calculation of EEDI;• for the calculation of baselines for attained EEDI;• to support the regulatory framework for verification of the
EEDI
IMO MBM – Expert Group
Group of MBM schemes which would require all ships to pay a contribution:
1. International Fund for Greenhouse Gas emissions from ships – suggested by Denmark and supported in principle by Cyprus, Marshall Islands and Nigeria
2. Global Emission Trading System for International Shipping, as proposed by Norway, France and Germany with general support from the UK
Group of MBM schemes which provide rewards to more energy efficient ships:
3. Leveraged Incentive Scheme based on the International GHG Fund - proposed by Japan.
4. Trading with Efficiency Credits based on Efficiency Standards for All Ships - proposed by the USA.
5. Vessel Efficiency System - proposed by the World Shipping Council.
Some are in sector, i.e. shipping only; others are out of sector
Why are MBMs Proposed ?
• Shipping is expected to become more energy efficient
• IMO will adopt technical measures for new ships (EEDI)
• Existing ships will also improve their energy efficiency
BUT
• CO2 emission reductions achieved through technical and operational measures may not be sufficient and their effect will not be seen in the short term
• The increasing demand for transportation at sea could well lead to a net increase in CO2 emissions from ships even though each ship may become more efficient
Why are MBMs Proposed ?
ETS or other MBM
Application of the GHG Fund
Offset (out of sector)
Actual emissions
BAU
Target line
EEDI
Application of ETS
Offsetting (in sector & out sector)Offsetting (in sector & out sector)
Actual emissionsActual emissions
BAUBAU
Target line
EEDI
Funds to UNFCCCFunds to UNFCCC
General comments on MBMs
• Proposals at different level of maturity
• All proposals need further development
• All lack policy details with regard to– enforcement– administration– carbon leakage– fraud– vessels registered with non-party flags– harmonisation
Reducing Greenhouse Gas Emissions from Shipping
Industry initiatives:
• Work on EEDI (including Tripartite workshops)• Developing and assessing GHG reduction measures for
new and existing ships (Tripartite)• Developing Marginal Abatement Cost Curves
- what is achievable ?• Developing operational measures, such as “Virtual Arrival”• Developing industry SEEMPs, such as INTERTANKO’s
TEEMP – Tanker Energy Efficiency Management Plan
plus• Active participation in MBM Expert Group
Mitigation Measures
Mitigation Measures
MAC Curves - Industry study
“Virtual Arrival “OCIMF /INTERTANKO project
Virtual Arrival is all about managing time and managing speed.
It’s not about blanket speed reduction to match current market conditions.
Virtual arrival is about identifying delays at discharging ports, then managing the vessel’s arrival time at that port/terminal through well managed passage speed, resulting in reduced emissions but not reducing capacity.
Virtual Arrival - Summary
• Cooperation between Charterer (Terminal Operator) and Owner
• Speed is “optimised” when ship’s 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
Next Steps:• OCIMF-INTERTANKO running joint workshops• Charter Parties being reviewed
(INTERTANKO/BIMCO/BP/Chevron) – indemnity and liability issues, including bills of lading
• Individual oil majors and owners “trialling” system• Bulk carrier sector examining feasibility
Virtual Arrival
by taking advantage of known inefficiencies in the supply chain andreducing speed when the terminal is not ready to discharge the cargo In addition to directly reduced emissions, other benefits are:• Reduced congestion and emissions in the port area • Improved safety• Potentially increased use of weather routing Important pre-conditions:• The safety of the vessel remains paramount• The authority of the vessel’s Master remains unchanged• The basic terms of trade remain the same
What is needed to do to make Virtual Arrival work?
1. A known delay at the discharge port2. A mutual agreement between two (or more) parties to
adapt the ship’s arrival time to take advantage of the delay3. An agreed Charter Party clause that establishes the terms
for reducing the speed to adapt to the new arrival time4. An agreement on how to calculate and report the Virtual
Arrival and the performance of the vessel5. This may involve a Weather Analysis Provider (WAP)6. OCIMF/INTERTANKO and class are producing transparent
standards for verification of WAPs
But mainly it’s a win–win situation for all,based on trust and transparency
Council Discussion/Policy Review GHG reductions – INTERTANKO positions
Support in principle for:• Mandatory EEDI – subject to acceptable formula• Targeted reductions in EEDI over time – subject to realistic assumptions• Mandatory SEEMP – subject to applicability of final version and EEOI remaining “voluntary”
Regulation/legislation of GHG emission reductions to be coordinated through the IMO and to be flag neutral; i.e. applicable to ALL ships
Council Discussion/Policy Review
Market Based Instruments:
• As a MINIMUM must meet IMO and INTERTANKO principles
Do we need an MBM for Shipping ?
• Cost of fuel is already sufficient economic incentive (frequently 60-80% of total operating costs)
• Without agreed “targets” for GHG reductions from shipping, how is any shortfall quantified and how is the “purpose” of an MBM defined?
IMO Principles
1. Effective in contributing to the reduction of total global GHG emissions
2. Binding & equally applicable to all flag States3. Cost-effective4. Able to limit or effectively minimize competitive
distortion5. Based on sustainable environmental development
without penalizing global trade and growth6. Based on a goal-based approach and not prescribe
specific methods7. Supportive of promoting and facilitating technical
innovation and R&D in the entire shipping sector8. Accommodating to leading technologies in the field of
energy efficiency 9. Practical, transparent, fraud free and easy to
administer
Muchas GraciasThank you
For more information, please visit:www.intertanko.com www.shippingfacts.com
www.maritimefoundation.com
London, Oslo. Washington, Singapore and Brussels
Kyoto Protocol
• Established under UN Framework Convention on Climate Change (UNFCCC) and 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, with Conference of Parties (COP15)
to meet in Copenhagen in Dec 2009 to develop successor• Kyoto recognises “common but differentiated
responsibilities”, i.e. developed countries produce more GHGs and should be “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
MBM Proposals
• Out of shipping sector mechanisms– International GHG Fund (Denmark et al.)– Emission Trading Scheme (Norway et al.)– Rebate Mechanisms (IUCN)
• In shipping sector mechanisms– Leverage Incentive Scheme (Japan)– Ship efficiency & Credit Trading (USA)– Vessel Efficiency System (WSC)– Port State Levy (Jamaica)
– Penalty on Trade and Development (Bahamas)
Ship Efficiency and Credit
US EEDI (EIr)US EEDI (EIr)
IMO EEDIIMO EEDI
New ship IMO EEDI (US EIa)
Efficiency Credit = (EIr – EIa) x Activity
Existing hip (EIa)
Efficient Credit >0 = Sells CreditsEfficient Credit < 0 = Buys Credits
Leverage Incentive Scheme
Req. EEDI 1
Req. EEDI 2
Req. EEDI 3
EEDIAttained
0%0%
50%50%
100%100%
50%50%
Ship 2
Ship 1
Ship 3
EEOI
benchmark
Actual
PATERN 1
PATERN 2
Initial EEOI
Reduced EEOI
NEW BUILDINGNEW BUILDING
EXISTING SHIPSEXISTING SHIPS
Possible Abatement Measures
• Gas fuelled engines• Electronic engine control• Waste heat recovery• Air cavity lubrication• Contra-rotating propeller• Fuels cells as auxiliary
engines• Frequency converters• Exhaust gas boilers on
auxiliary engines• Energy efficient light
systems• Wing generator• Wind power – kite• Wind power – fixed sails
or wings• Solar panels
• Solar panels• Trim/draft optimising• Weather routing• Voyage execution• Steam plant operational
improvements• Speed reduction due to port
efficiency• Propeller condition• Speed reduction due to fleet
increase• Hull condition• Propulsion efficiency devices• Cold ironing• Engine monitoring• Reduced auxiliary power
usage
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