AIR EMISSIONS FROM SHIPPING

Revision of MARPOL Annex VI:The Distillate Option

Paris

24 May 2007

Peter M. Swift

Air Emissions from ShipsGoverning Regulations

• MARPOL Annex VI entered into effect in 2005 (Global Sulphur 4.5%, 1.5% in SECAs)

• Baltic Sea - SECA from May 2006 • North Sea - SECA in November  2007

• Europe Sulphur Directive (1999 & Rev) governs inter alia emissions in port (0.1% S at berth)

• California (CARB) new regulations which took effect Jan 2007

• Various ports - local regulations on Ship Emissions, which are inhibiting future expansion/development  - introducing differentiated port fees

Of particular concern to tramp sectors, trading internationally, lifting bunkers in ports worldwide

Problem of air pollution from ships - Well Recognised in Europe

European Parliament resolutions 2002 and 2006 set the direction :

- tighter international standards for NOx emissions - designate Atlantic coast and Mediterranean as SECAs- reduce sulphur level in SECAs to 0.5%- introduce financial incentives for low emission operations- encourage use of shore-side electricity for ships in port- develop marine fuel quality standard(s)- Commission to encourage level playing field and action at IMO

European Council adopted similar position

EU Thematic Strategy on Air EU Thematic Strategy on Air PollutionPollution COM(2005) 446 & SEC(2005) 1132

and 1133

(Adopted Sept. 2005)

&&

Role of Maritime Emissions

DG Environment, European Commission

Impacts addressed by the Strategy

• Health: Fine Particles (PM2.5) & Ozone (NOx and VOCs)– Range of problems from minor respiratory effects to premature

death; also cardiovascular effects. No known thresholds for effects

• Acid rain (SO2, NOx, NH3)– Affects freshwaters and terrestrial ecosystems leads to loss of

flora & fauna; reduced growth of forests, leaching of toxic metals into soil solution

• Eutrophication (NOx, NH3)– Excess nutrient nitrogen causes species composition change

& loss of biodiversity. Increases susceptibility to other stresses such as drought

• Ozone (non-health, NOx and VOCs)– Damages trees and plants including agricultural crops;

damages buildings/materials

Fine particles PM2.5

Life expectancy:8.1 months in

2000, 5.5 months in

2020

Life years lost:3.6M in 20002.5M in 2020

Premature deaths350,000 in 2000 272,000 in 2020

1997 Met. year

months

Problem of too much nitrogen

deposited to

ecosystems in 2020

Percentage of ecosystem area in each model grid cell with nitrogen deposition above “safe level”

Total Ecosystem Total Ecosystem area exceeded from area exceeded from

eutrophication eutrophication 590 000 km590 000 km22

%

1997 met. year

Summary of “Business as Usual”(includes current ship measures)

• Emissions continue to decline

• But in 2020– Premature deaths related

to fine particulates still 270,000

– Loss of statistical average life still 5 months in the EU

– Ozone premature mortality equal to 20,800 cases

– 119,000 km2 of forest at risk from acid rain

– 590,000 km2 of ecosystems at risk from nutrient Nitrogen

– 760,000 km2 of forest at risk from ozone

• Cost-effective improvements are possible

kT/annum

2000 2020 %

SO2 8736 2806 -68%

NOx 1158 5889 -49%

VOCs 1066 5918 -44%

PM2.5 1749 971 -44%

NH3 3824 3686 -4%

Ships will represent 125% and 101% of land based SO2 and NOx emissions in 2020.

Emissions

Air Pollution from Ships

• Many measures taken on land based sources to reduce polluting emissions (Large Combustion Plant, road vehicles, fuels etc.)

• Community Marine Emissions Strategy of 2002 lead to the adoption of Directive 2005/33/EC on the sulphur content of marine fuels– SOx emission control areas – 1.5% S fuels– Marine gas oils used at berth from 2010 (0.1%)

• This has already been factored into Commission’s analyses for the Thematic Strategy

EU: Further information

• Ship emissions policy and technical studieshttp://ec.europa.eu/environment/air/transport.htm

• Thematic Strategy on air pollution & CAFEhttp://ec.europa.eu/environment/air/cafe/index.htm

• National emissions ceilings directivehttp:/ec.europa.eu/environment/air/ceilings.htm

EXISTING Sulphur Emission Control Areas (SECAs)

NOV. 2007

MAY2006

SOURCE:

http://maps.google.com/

Global Concerns Widely Expressed (1)

US Environmental Protection Agency:

“..in last 15 years..little, if any, reduction in sulphur emissions”

“..this fuel sulphur cap is set at a level 3,000 times higher than is commonly used now inland transportation”

“..Ocean Going Vehicles (OGVs) are now one of the largest anthropogenic sources of air pollution… Recent estimates in the scientific community indicate OGVs represent approx.18-30% of the world’s NOx pollution & 9% of global SOx emissions.” “IMO Member States now hold a unique opportunity to revise the MARPOL Annex VI engine and fuel standards in a manner that will provide a long-term solution to the significant air emissions generated by ships.”

Source: MEPC 56/4 – IMO Secretariat

Global Concerns Widely Expressed (2)

Japanese Ministry of Land, Infrastructure & Transport:- declared intention to propose stricter sulphur regulations and that “NOx emissions from ships should be reduced as much as possible”

State of California – setting the pace, by:- mandating the use of distillates in auxiliary engines from 2007 and targeting emissions of particulate matter, nitrogen oxides, and sulphur oxides from ship main engines by 2010

Air Emissions from Ships

• Covered by Annex VI–Oxides of Nitrogen (NOx) – create Ozone–Sulphur Oxides (SOx) – create acidification–Hydrocarbons (HC) – gas, soot and some particulates–Volatile Organic Compounds (VOC)–Refrigerant Gases

• Not covered (currently) by Annex VI–Carbon Dioxide (CO2) –Carbon Monoxide (CO)

Engine exhaust gases are dependent upon engine type, engine settings and fuel type

New Parameter for Air Pollution Control ?

• Particulate Matter Emission control• What are these Particulates?

– Sulphates from SOx– Nitrates from NOx– VOC from uncombusted hydrocarbons– Heavy Metals e.g. Vanadium, Nickel,

Aluminium, Sodium, Calcium, Zinc; from Heavy Fuel oil and Lube Oil

– Soot – from the aromatics in heavy fuel oil

Tanker Owners Committed to ReducePollution (of Oceans and Atmosphere)

INTERTANKO members are committed to continuous improvement in environmental

performance.

Pollution of oceans – three straight years of record low quantity of oil spilled, and “striving for zero”

Pollution of atmosphere:Similarly committed to achieving a dramatic reduction in harmful air emissions

INTERTANKO Approach

Principles behind the INTERTANKO position:

– ensure a solid platform of requirements– be realistic and feasible– seek a long term and positive reduction of air

emissions from ships, and– contribute to a long term and a predictable

regulatory regime

– a global standard for at sea, coastal and at berth operations (no SECAs)

The Distillate Option

INTERTANKO has proposed:

1. Use of distillate fuel (i.e. MDO), with:• sulphur content of 1.0% from [2010]• sulphur content of 0.5% from [2015] for

newer engines

2. Worldwide application, thus effectively a global SECA

3. Establishment of an international specification standard for distillate fuel

The Rationale for Distillate Option

The use of distillate would achieve:

1. Reductions of:SOx by up to 80%, Particulate Matter by 80-90%, NOx by approx. 15% (initially)

2. Reduction in fuel consumption on ships and thus reduction in CO2

3. Facilitates further reductions in NOx

Applicable to virtually ALL existing ships and engines, with only minor modifications and costs

Distillate/MDO :ADDITIONAL BENEFITS

• ENVIRONMENTAL:– Reduces onboard fuel generated waste– No fuel heating/pre-treatment or waste incineration = energy saving– ALL ships become “greener” – “Cleaner” waste & free of hazardous elements contained in residual

fuels– Avoids use of abatement technologies = no further additional waste

& no need of further waste disposal– [Any bunker spill significantly less harmful]

• SAFETY:– Less incidents with engine breakdowns caused by poorer quality

fuels / lower maintenance load – No need of complex fuel change-over operations– No risk of incompatibility of blended fuels– Safer working environment for crews

Implications & Implementation

• Cleaner fuels, such as distillates or lower sulphur residual, will be more expensive than high sulphur residuals – costs will be passed through to the shipowner

• The costs of manufacturing, fitting and running of abatement systems will similarly be borne by the shipowner

• In the case of the former the responsibility for the supply of the clean fuel lies with the refiner,• in the latter case the responsibility for clean exhaust gas AND the disposal of the scrubbed waste products lies with the shipowner.

Shifting the burden !

Scrubbers place the burden of handling and disposal of the waste by-products (solid and liquid) on the shipowner !

What we must avoid is another “oily water separator” issue, where the shipowner has to process the “waste”, and where the equipment is often unreliable, suitable reception facilities are not available, and the on-board processing is very burdensome.

*Photo courtesy of Krystallon website

Estimating some of the costs

Additional SECAs requiring large quantities of LSFO (low sulphur residual fuel)

• According to CONCAWE study LSFO will be more expensive than adopting distillate

Global distillate option• According to Europia 200 mtpa of distillate required instead of residual

fuel oil, refinery investment :• USD 38 bn → USD 50 bn → USD 100 bn (varies at presentation)• SAY USD 100 bn for 200 mtpa capacity spread over say 10 years:• Additional cost USD 50 / tonne

Scrubbers• Unit cost ca. USD 1 million + docking, fitting, etc.• Up to 5 required per ship, but SAY total cost ca. USD 4 million per ship• Fitted to SAY 40,000 of world’s ocean going fleet• Total Cost ca USD 160 bn

Implications & Implementation

The manufacture & operation of abatement systems both produce CO2

The desulphurisisation of residual fuel to produce low sulphur residual requires significant energy and thus creates additional CO2

The production of additional distillates will similarly increase refinery CO2 emissions

However the use of distillates reduces ship’s total fuel consumption, makes redundant onboard fuel pre-treatment systems and reduces to a minimum energy for onboard waste treatment, all leading to lower CO2 emissions. Further improvements in engine efficiency are also possible with distillates and thus additional reductions in CO2 production.

When considering the overall benefits from a Green House Gases standpoint (CO2 and NOx), the switch to Distillates is a very attractive

option. At worst, the switch to distillates appears to be “CO2 neutral”, while other

options will produce additional CO2.

IF ONLY WE HAD A MAGIC BIN THAT WE COULD THROW STUFF IN AND MAKE IT DISAPPEAR FOREVER. WHAT WE CAN DO IS FIND CREATIVE WAYS TO RECYCLE. GREENHOUSES USE OUR WASTE CO2 TO GROW FLOWERS AND OUR WASTE SULPHUR TO MAKE SUPER STRONG CONCRETE.

REAL ENERGY SOLUTIONS FOR THE REAL WORLD

The Distillate Option

The Distillate Option is straightforward and simple to implement for virtually all existing ships and engines, with strong environmental benefits and effectively no other investment than a higher price for the bunker fuel.

The Distillate Option

• New refinery/expansion projects indicate increasing capacity to produce additional MDO

• Not easy, nor cheap but realistic & feasible

• Appears cost-effective versus alternatives

• Better to clean fuels onboard > 40,000 ships or to produce clean fuels in ca. 700 refineries?

• Overall the distillate option provides a viable solution for significant emission reductions from ships in both near and long term

The Options (Currently !)

• A. Status Quo – No change – the Reference Option

• B. Global and Local (SECA) options:• i) A global sulphur cap (unchanged or lower value) and SECA

sulphur cap lowered in two tiers: 1.0% in [2010] and 0.5% in [2015];

• ii) BIMCO proposal: lower global cap to 3% and use of Marine Diesel Oil (MDO) in SECAs but also allow for scrubbers in SECAs;

• iii) U.S. proposal: no change to global sulphur cap, but propose SECAs up to 200 nm off the coast where fuel to have sulphur content of 0.1% or for ships with scrubbers to have same SOx emission reduction.

• C. Global Sulphur cap options:• i) Change to distillate fuels (MDO) (no SECA);• ii) As i) but allows use of residual fuel + scrubbers.

What next?

• MEPC 56: 9-13 July 2007• IMO SG’s Expert Group: July-Dec 2007• BLG Intersessional Meeting: 29 Oct-2 Nov 2007• BLG: 4-8 Feb 2008 • MEPC 57: March/April2008

• EU Commission to take stock of progress– Review of Sulphur Directive – 2008– Scope for Community measures to reduce ship

emissions pursuant to Council’s conclusions – 2008

• US considers own legislation if IMO does not deliver - ?

Volatile Organic Compounds (VOC) Emissions & their Control

VOCs generated both during loading and on passage

Background:• Vapour return lines used in some ports• INTERTANKO developed VOC control procedure (VOCON) with

potential to reduce by more than 70% VOC emissions on passage• System further enhanced by adoption of the Pres-Vac VOCON P/V

valve• Further industry development with KVOC loading system• Ongoing work by INTERTANKO on VOC operational controls

related to cargo Reed Vapour pressure

Annex VI• Norway advocated incorporation of VOC Management Plan in to

Annex VI – industry generally supportive, subject some revisions• Some concerns that ships will be forced to have Vapour Return

but not ports

THANK YOU / MERCI

For more information, please visit:www.intertanko.com

www.shippingfacts.comwww.maritimefoundation.com