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by Michele Witthaus |
Time is running out for the industry to meet the key greenhouse gas (GHG) emissions requirements. Emissions of carbon dioxide (CO2), sulphur oxides (SOx), nitrogen oxides (NOx), and particulate matter are all on the agenda for drastic reduction in the coming years.
Stricter IMO sulphur oxide controls are already starting to bite: by 2015 the sulphur limit in the Emission Control Areas (ECAs) of the English Channel, North Sea, Baltic and North America will drop to a tenth of what is acceptable today. By 2020, global sulphur limits will be reduced to 0.5 per cent. Cruise ship and ferry owners and others are already acting to optimise their emissions and comply with regulatory demands. Slower cruising speeds, better equipment and greener fuels are some of the solutions being implemented as owners, operators, cruise lines and equipment providers get to grips with the challenges ahead. Other stakeholders, such as oil refineries, ports and terminals, engine manufacturers, ship yards, naval architects, marine engineers and chartering brokers are also having to look closely at the issue.
A meeting of the IMO’s Marine Environment Protection Committee in July voted for mandatory measures for the reduction of emissions of GHGs from ships. Amendments to MARPOL Annex VI Regulations for the prevention of air pollution from ships now require new ships to implement the Energy Efficiency Design Index (EEDI) for new ships, and all ships must implement the Ship Energy Efficiency Management Plan to facilitate improvements in their energy use.
Those affected may be reassured by the fact that they can choose the technological approach that suits them to comply with the EEDI, as it is a performance-based mechanism. This creates many new opportunities for solution providers to help design ships that reach the required energy efficiency level. Owners of ships of 400 gross tons and over now have until 2013 to prepare for the regulations, which will be enforced from the start of that year. IMO Secretary-General Efthimios Mitropoulos said of the vote: “Let us hope that the work to follow on these issues will enable all members to join in, so that the service to the environment the measures aim at will be complete.”
Market-based measures
This watershed decision follows lengthy debates over the possible implementation of market-based measures (MBMs) for international shipping. Proposals being considered include a levy on all CO2 emissions from international shipping (or from those ships falling foul of the EEDI requirement), emission trading systems and schemes based on the actual efficiency of vessels.
The IMO has exhaustively studied the options for MBMs, carrying out a feasibility study and impact assessment with the participation of governments and observer organisations. Criticised by many as unfair and difficult to put into practice, MBMs nevertheless seem to be a way forward for the industry at a time when key players need to be seen to be taking constructive action.
One MBM under discussion is of a bunker levy to tackle emissions. The prospect of such a levy has been well received by some sections of the shipping industry, with the International Chamber of Shipping stating its support for a levy rather than emissions trading, which it regards as too complex to succeed.
The incoming president of BIMCO used his inaugural address in June this year to underline the importance of emissions reduction. Identifying energy as a key element of the sustainability agenda, Yudhishthir Khatau said that ship owners face difficult choices as they weigh up the choice between scrubbers, distillates and options such as LNG. He called for practical, commercially viable and sustainable solutions which do not unfairly penalise shipping.
Whether measures are seen as fair or not, the shipping industry can no longer escape its obligations to reduce emissions, according to Helena Athoussaki, CEO of emissions reduction consultancy, Carbon Positive. “Despite the fact that most cruise and ferry companies have good environmental standards, cruising is a significant contributor to shipping emissions,” she says. “A cruise liner such as the Queen Mary 2 emits 0.43kg of CO2 per passenger mile, compared with 0.257kg for a long-haul flight.” Carbon Positive is in favour of a market based measure to encourage cooperation on emissions.
The World Shipping Council (WSC) has supported the IMO’s initiatives to reduce CO2 emissions, but says it will be hard to enforce action on a global basis. The WSC and its members have argued for improved fuel efficiency and lowered carbon footprints for individual ships, rather than carbon offset schemes, and the council has stated that ‘any international carbon regime for shipping should result in the sector being more carbon efficient, not just more expensive to operate’.
Global and local
Regional changes are already impacting on key shipping areas. The EU wants greenhouse gas emissions from all forms of transport to be at least 60 per cent lower by 2050 than they were in 1990. According to a European Commission White Paper on the Future of Transport, EU CO2 emissions from maritime transport need to be cut by up to 50 per cent by 2050 compared to 2005 levels. Suggested measures to achieve this include policies to improve the energy efficiency of vehicles, development of new sustainable fuels, moving more freight by seas and rivers and improving traffic management and infrastructures.
Since January 2011, craft using Europe’s inland waterways have been bound by the new marine diesel fuel standards outlined in EU Directive 2009/30/EC, which came into force in the UK in January 2011. The new law enforces changes to engine functioning, in turn requiring owners and operators to make potentially costly changes to their fleets.
The fact that not all shipowners are currently feeling the effects of higher fuel prices exacerbates the problem, says Finn Arne Rognstad, segment manager, cruise and ferries for Rolls Royce. “In many sectors of the industry, the owner does not pay for the fuel, due to old and outdated charter rules, so they have little gain from investing in fuel saving equipment. Initial capital expenditure is also sometimes hard to find even with known fuel savings after investment.”
Globally, government agencies are stepping up to tackle the problem. In April, the IMO and the Korea International Cooperation Agency agreed to work together on implementation of a pioneering technical cooperation project to address GHGs from ships. Activities will focus on enhancing the capacities of developing countries in East Asia to develop and implement appropriate actions on CO2 emissions from shipping, while promoting sustainable development.
This is an abridged version of an article that appeared in the Autumn/ Winter 2011 edition of International Cruise & Ferry Review. You can subscribe to the magazine in printed or digital formats.