ASIAN MARKETS China, Korea, Singapore, Japan David Craig – GM Asia.
Asian Regional Panel 6 March 2008 Singapore Peter M. Swift.
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Transcript of Asian Regional Panel 6 March 2008 Singapore Peter M. Swift.
Asian Regional Panel
6 March 2008
Singapore
Peter M. Swift
MD report
INTERTANKOInternational Association of Independent Tanker Owners
2008 Dates
April ISTANBUL
20 Golf tournamentAssociate Members’ meeting
21 ExCom, CouncilFocus sessions
22-23 Tanker Event22 Poseidon Challenge
AGM23 Oil & Market session
22 Tanker Chartering seminar
Nov LONDON
17-18 ExCom/Council, London
Future for Single Hulls
Options today
• Conversion to
- DH Tanker
- FSU/FPSO
- Bulk Carrier
• Recycling
• Continued Trading
Continued Trading
• Subject to (i) Flag state and (ii) Coastal state acceptability after 2010
• But now uncertainty over- Korea- Japan- China- India- Others
Load lines South Africa
16 Apr – 15 Oct = WINTER16 Oct – 15 Apr = SUMMER
20 NM
Load Line Chart Zone
Blue Sky Thinking
• Business Environment• Industry Developments• Regulatory and Governance Environment• Environmental and Social Pressures• Human Element (Personnel) & Operational
Challenges• Other
Blue Sky Thinking
Business Environment• Cyclical business• Rising costs• Tanker accident• ……………………….
Blue Sky Thinking
Industry Developments• Consolidation• New business opportunities• ……………
Blue Sky Thinking
Regulatory and Governance Environment• Weaker/stronger IMO• More/less regional
pressures/legislation• Role of flag states• Role of class• Higher standards set by… ?• Challenges to Limitation of Liability • …………….
INTERNATIONALCONVENTIONS
WHO GOVERNS SHIPPING ?
COMMUNITY INTERESTS- LOCAL LAWS / REGULATIONS
REGIONALREGULATIONS
INTERNATIONAL SHIPPING
INTERNATIONALCONVENTIONS
MARPOL Annex VI
Who governs Shipping ?- Environmental pressures
COMMUNITY INTERESTS
-LOCAL LAWS / REGULATIONS
California,West Coast/Canadian
Ports,Rotterdam, Antwerp,
Helsinborg,Other
REGIONALREGULATIONSEU / USA (EPA)
INTERNATIONAL SHIPPING
Blue Sky Thinking
Environmental and Social Pressures• Climate change / global warming and air
pollution pressures on shipping industries• Development of (zero emission) eco-ships• Tankers singled out – not cold ironing, large
ballast water transporters, difficult recycling • “Green legislation” grows – higher entry
barriers, knowledge and experience more valued
• Corporate Social Responsibility practices and programmes are the “norm”
• ……………..
Blue Sky Thinking
Human Element (Personnel) & Operational Challenges• Availability and quality of officer pool will get worse
before it gets better• Solutions will be
- through regulatory changes and/or market mechanisms- at both macro and micro level ?
• Sourcing will be even more from “new” Asian countries• Greater participation of women• Tanker industry could lose out to other sectors• Standards in some sectors will slide• More activity by management companies• ……………
Blue Sky Thinking
Other
?
Blue Sky Thinking
BLUE SKIES
or
STORM CLOUDS
?
Update on the revision of MARPOL ANNEX VI
& GHG reduction
Asian Regional Panel
6 March 2008
Singapore
IMO Annex VI Revision Process
• End 2007 Group of Experts Report published
• February - BLG finalised its contributions
• April - MEPC 57 to develop and approve the revision
• October - MEPC 58 to adopt the revision
• Enforcement (tacit agreement) – earliest February 2010
Outcome from IMO BLG 12
Hybrid Solutions starting to emerge
Green House Gas Reductions
IMO/Internationally• Not part of Annex VI• IMO 2000 study – continuing correspondence
group• Shipping not covered within Kyoto• Now all changing – IMO 2009 deadline?
EU - ?• 20% reduction by 2020 (Baseline 1990) ?• Shipping included ?
US ?
Green House Gas Reductions
Many issues• Fleet growth as economies and trade grows• Post Kyoto• IMO or other• External pressures – charterers, shippers,
society, politicians• Focus is already on Aviation• Existing ships / new ships• Indexing of units, fleets, industry• CO2 trade-offs ?• Emission trading scheme – Europe/international• ??
Outcome from BLG 12 SOx and PM emissions
• Three options
• Option 1 – Global Sulphur cap– 4.50% – 1.00% as from 1 January 201[2]– 0.50% as from 1 January 201[5]– Prior to 1 January 201[2] only:
• SECAs provision will apply with a S cap of 1.50%• Procedures for fuel change over should be
available and the timing recorded • Scrubbers/abatement technologies could be used
as a means of compliance
Outcome from BLG 12 SOx and PM emissions
• Option 2 – Global/Regional – Global S cap 4.50%– SECA S cap
• 1.50%• 0.10% as from 1 January 201[2]
– Scrubbers/abatement technologies allowed with the limits:
• 6.0 g SOx/kWh• 0.4 g SOx/kWh as from 1 January 201[2]• waste streams cannot be discharged in ports
unless documented it would not have an adverse impact on the local eco-systems (IMO issues guidelines with criteria for such an assessment)
Outcome from BLG 12 SOx and PM emissions
• Option 3 – Global/Regional with Micro-Emissions Control Areas– Global S cap
• 4.50%• 3.0% from 1 January 201[2]
– SECA S cap• 1.50%• 1.00% from 1 January 201[0]• 0.50% from 1 January 201[5]
– Scrubbers/abatement technologies allowed with the limits:• 6.0 g SOx/kWh• 4.0 g SOx/kWh as from 1 January 201[0]• 2.0 g SOx/kWh as from 1 January 201[5]• waste streams cannot be discharged in ports unless documented
it would not have an adverse impact on the local eco-systems (IMO issues guidelines with criteria for such an assessment)
Outcome from BLG 12 SOx and PM emissions
• Option 3 – Global/Regional with Micro-Emissions Control Areas
• Micro-Emission Control Areas– up to [24] nm off the coast; better definition yet to
be developed– conditions for declaring a Micro - ECA yet to be
developed– S cap 0.10% (no date given so far) – scrubbers/abatement technologies allowed with the
limit at 0.4 g SOx/kWh– waste streams cannot be discharged in ports unless
documented it would not have an adverse impact on the local eco-systems (IMO issues guidelines with criteria for such an assessment)
Opinions submitted to MEPC 57 SOx and PM emissions
• INTERTANKO supports Option 1• INTERTANKO also suggests that as from 1
January 201[5], Annex VI should also add limitiations to lower the PM emissions such as– carbon residue content in the fuel used by ships– ash content in the fuel used by ships
• OCIMF, ICS and BIMCO support Option 3• IPIECA supports Option 2 but with a S cap in
SECA set at 1.00%• Governments we believe support Option 1:
Norway, Germany, Sweden, Finland, Italy, Ireland, Greece, European Commission.
Possible outcome from MEPC 57? SOx and PM emissions
• Possible agreement on a hybrid solution
• It starts with Option 2
• It then translates into Option 1
• Other comments:– Greece indicated at BLG 12 they disagree
that scrubbers are identified as a specific alternative compliance
– Marshall Islands seem to share that opinion– Australia and Canada seem also to support
Option 1
Outcome from BLG 12 NOx emissions – Pre-2000 engines
• Measures on engines installed onboard ships constructed between 1 January 1990 and 31 December 1999
• The NOx emissions at Tier I level• Applicaton date
– at the first intermediate or renewal survey; or– [1 January 2010], which one occurs later
• Compliance through:– in engine modification (MEPC 57 has to
choose between two options); or– abatement technologies
Outcome from BLG 12 NOx emissions – Pre-2000 engines
• Option 1– applies to all (i.e. 1990 – 1999) engines– if compliance through in-engine
modifications not possible, a Port State could:
• require the ship to use distillate fuel; or• deny port entry
• Option 2– applies to larger (1990 – 1999) engines only
([displacement of and over [30/60/90] liters] or [power output of > 5000 kW])
– use of a certified ”upgrade kit”
Outcome from BLG 12 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
Outcome from BLG 12 NOx emissions-Tier III (new engines)
• Tier III standards – 80% emission reductions from Tier I limits
• Tier III limits apply ONLY to engines installed on ships constructed on & after 1 January 2016
• (a Party to Annex VI can apply the above limits to new engines of 130 kW and above)
• Tier III limits in ECAs only• Outside ECAs - Tier II limits • 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
Outcome from BLG 12Fuel Oil Quality
• Small but important changes and pending discusions
• The fuels required to be ”fit for purpose”• MEPC 57 to clarify the meaning of ”fit for
purpose” from a quality point of view• IMO to invite ISO to revise marine fuels
specifications in ISO 8217• Define fuel specification for a Global solution• Possible inclusion of limitations of other
parameters to reduce PM emissions• BLG developed a standard procedure to
interpret the actual test results of the sulphur content of the MARPOL sample
CONCLUSIONS
• Possible hybrid solution for SOx and PM emissions– starting with Option 2 (with a higher S cap in
SECAs, say 1.00% from say 201[2])– followed by Option 1
CONCLUSIONS
• NOx limits for existing engines - not an easy task• Use of MDO would give an easy NOx reduction by 10%
to 15%. BUT without a global use of MDO, the penalty on old ships would be too high
• NOx Tier II - possible and rests with manufacturers• NOx Tier III implies use of SCRs/abatement
technologies• Prudent that new ships consider compliance with Tier
III and install SCRs/abatement technology prior to 2016• Still to be assessed
– SCRs - the only technology to give an 80% reduction; . . . BUT– existing SCR technology not efficient at low engine loads– can compliance be achieved in ECAs irrespective the engine
load (close to port, through estuaries and straits ships slow down)?
Move to Double Hulls
• More than USD 500 billion invested since 2000 with the result that ~95% of tanker fleet double hulled in 2010
622
5159
67 68 73 78 84 91 9694
78
4941
33 32 27 22 16 9 4
0
20
40
60
80
100
1991
1997
End
02
End
03
End
04
End
05
End
06
End
07
End
08
End
09
End
10
SH/DB/DS
DH
% dwt share:
Assumed all SH tankers phased out by 2010
Average age tankers above 10,000 dwt(1970-2007)
Years
6
8
10
12
14
16
197019731976 197919821985 1988199119941997 200020032006
Tanker incidents 2007 by type and accidental pollution
1000 ts oil pollutionNo. incidents
0
200
400
600
800
1000
78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07
0
100
200
300
400
500
600
700
War
Hull & Machinery
Fire/Expl
Grounded
Coll/Contact
Misc.
Pollution - bars
Source: INTERTANKO/LMIU/ITOPF/various
Accidental oil pollution into the sea
Source: ITOPF/Fearnleys
10001000ts spiltts spilt
bn bn tonne-mtonne-m
0.0
0.7
1.4
2.1
2.8
3.5
1970s 1980s 1990s PR00s
0
26
52
78
104
130
1000 ts spilt
'0000 bntonne-miles
- 63% -6% -78%
-45% -33% -82%-45% -33% -82%Reduction per tonne milesReduction per tonne miles
Reported tanker incidents
Number
0
200
400
600
800
1000
78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07
0
84
168
252
336
420
00 01 02 03 04 05 06 07
War
H & M
F & E
Grounding
Collis.
M isc
Source: INTERTANKO/LMIU/various
Tanker incidents 2007 by type
Source: INTERTANKO/LMIU/various
1%
27%
13%
29%
9%
20%
Collision/contact
Grounding
Fire/Explosion
Hull & machinery
Misc/unknown
Hostilties
Collision Grounding
Hull & Machinery 95 of which 56 engine related
Misc.
Fire & Expl.
Reported tanker 325
incidents 2007
Tanker incidents 2007 by size
24%
17%
15%
44%
>10,000
10-29,999
30-99,999
<100,000 dwt
325 incidents
Tanker incidents 2007 by age
Built 1970s -
Built 1980s
Built 1990s
Built 2000s
Incidents/no tankers:
0.000 0.200
Built1970s
Built1980s
Built1990s
Built2000s
325 incidents
13%
21%
33%
33%
Incidents 2007 by type tanker
Number
0 10 20 30 40 50 60 70 80 90
Other
OBO
Non specific
Gas
Chemical
Crude oil
Chem/oil
Product
Source: INTERTANKO/LMIU/various
Tanker engine related incidents
No
Source: INTERTANKO/LMIU/various
0 10 20 30 40 50 60
2002
2003
2004
2005
2006
2007
Below 10,000
10-29,999 dwt
30-99,999 dwt
Above 100,000 dwt
2007 incidents by
% of fleet per 000 dwt category:
0.0% 0.2% 0.4% 0.6%
<10
10-30
30 -100
>100
Tanker incidents: engine related
No
Source: INTERTANKO/LMIU/various
0 10 20 30 40 50 60
2002
2003
2004
2005
2006
2007
1970s1980s1990s2000s
NK
Built:
0.0% 0.2% 0.4% 0.6%
1970s
1980s
1990s
2000s
2007 incidents by
% of fleet per decade of build:
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