PANAMA MARITIME IX

Initiatives to reduce toxic gas emissions: Initiatives to reduce toxic gas emissions: perspective of the shipping companies.perspective of the shipping companies.

Iniciativas para reducir las emisiones de Iniciativas para reducir las emisiones de gases tóxicos: perspectiva de las navierasgases tóxicos: perspectiva de las navieras

Peter M. Swift, MD, INTERTANKO

TANKERS

US“Я”

INTERTANKO – the Voice of the Tanker Industry INTERTANKO – the Voice of the Tanker Industry International Association of Independent Tanker Owners

INTERTANKO represents approximately 80% of the international oil and chemical fleet

MISSION• To provide leadership to the Tanker Industry in serving the world

with safe, environmentally sound and efficient seaborne transportation of oil, gas and chemical products

VISION FOR THE TANKER INDUSTRY• A responsible, sustainable, respected Tanker Industry,

committed to continuous improvement and constructively influencing its future

ONE OF THE ASSOCIATION’S PRIMARY GOALS• Lead the continuous improvement of the Tanker Industry’s

performance in striving to achieve the goals of:Zero fatalities, Zero pollution, Zero detentions

Round Table of international shipping associationsRound Table of international shipping associations BIMCO, ICS, INTERCARGO, INTERTANKOBIMCO, ICS, INTERCARGO, INTERTANKO

Congratulate the

Panama Maritime Authority

on

Achieving ISO 9001:2000 certification

and

Successful completion of the

IMO voluntary Flag State Audit

PANAMA MARITIME IX

Industry delivering on the Industry delivering on the

Environmental ChallengesEnvironmental Challenges

A GOOD NEWS STORY A GOOD NEWS STORY

TANKER SHIPPING A GOOD NEWS STORYTANKER SHIPPING A GOOD NEWS STORY

OIL POLLUTION IN 2008A RECORD LOW

Since records began in 1970

TANKER SHIPPING A GOOD NEWS STORYTANKER SHIPPING A GOOD NEWS STORY All tanker incidents and accidental pollution

Number of incidentsNumber of incidents

0

210

420

630

840

1050

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

08

0

120

240

360

480

600

Misc

Security

Fire/Expl

Hull & Machinery

Grounded

Coll/Contact

Oil pollution

000 ts spills000 ts spills

Upward trend in number of incidents reversed, while trade continues to rise

TANKER SHIPPING A GOOD NEWS STORYTANKER SHIPPING A GOOD NEWS STORY

Gasoline price at the pump (Dec08/Jan09)

Dollars per litreDollars per litre

Freight cost remains a fraction of delivered cost of oil

0.00

0.30

0.60

0.90

1.20

1.50

USA Japan Germany UK

Long haul freight rate

Marketing*

Oil price

Tax

.

Sources: IEA/Baltic Exchange

Initiatives to Reduce Air EmissionsInitiatives to Reduce Air Emissions

The Good News ContinuesThe Good News Continues

• IMO MARPOL Annex VI Revisions and NOx Technical Code adopted in 2008

• Good progress at IMO on measures to reduce Green House Gas emissions

Annex VI Revisions andAnnex VI Revisions andNOx Technical Code 2008NOx Technical Code 2008

• SOx , and hence also Particulate Matter, emissions will be lowered progressively: 0.5% fuel limit globally by 2020 (latest 2025) from current 4.5% and 0.1% in Emission Control Areas from current 1.5 % by 2015

• New NOx limits on existing engines and progressively stricter limits on new engines

Marine fuel oil quality will be further improvedMarine fuel oil quality will be further improved

Further initiatives – More ECAs (?)

Planned new ECA for 2013

Could be extended to entire N. A.

Up to 200 nm on the West Coast

Plan to require 0.1% or 0.2% S fuels

Revision of MARPOL Annex VI (Pollutants)DRIVERS FOR CHANGE

• Driven by governments– IMO member states “prepared” since Convention adopted

in 1997– Environmental impact often local/regional rather than

global– EU Sulphur Directive in 1999 & Thematic studies (2000+)

set unilateral challenge– California (2005) led US programmes– Local legislation emerged in Norway et al, and pending in

Japan et al• Environmental Lobby coordinated and effective• Shipping Industry support initially very limited

– Only a few pro-active, most reactive, some very negative• Economic drivers mostly negative

– Extra costs for refiners and owners

AND MORE GOOD NEWSAND MORE GOOD NEWSReductions in VOC Emissions

• Tanker industry introduced voluntary measures to reduce VOC emissions from cargo on passage in 2002 – cutting these by approximately 80%

• MARPOL Annex VI revisions incorporated these in 2008, and take effect in 2010

Initiatives to ReduceInitiatives to ReduceGreen House Gas EmissionsGreen House Gas Emissions

Shipping has a head start as the most Shipping has a head start as the most energy efficient means of transportenergy efficient means of transport

15

COCO22 Emissions per Unit Load Emissions per Unit Load

by Transport Modeby Transport Mode

Source: Ministry of Land, Infrastructure and Transport (Japan): The Survey on Transport Energy 2001/2002 MOL (Japan): Environmental and Social Report 2004

Large Tanker

Large Containership

Railway

Coastal Carrier

Small-size Commercial Truck

Airplane

Standard-size Commercial Truck

100 200 300 400

398

226

49

11

6

3

1

0

Units Relative

Shipping energy efficient

TANKER SHIPPING A GOOD NEWS STORYTANKER SHIPPING A GOOD NEWS STORY Shipping’s GREEN Credentials

• This car, weighing one tonne, uses 1 litre of fuel to move 20 kms

• This oil tanker uses 1 litre of fuel to move one tonne of cargo 2,500 kms

– more than twice as far as 20 years ago

One particular challenge for the shipping industry- i.e. seaborne trade will continue to grow strongly

Source: Fearnleys/INTERTANKO

IndexIndex

80

100

120

140

160

180

19

80

19

81

19

82

19

83

19

84

19

85

19

86

19

87

19

88

19

89

19

90

19

91

19

92

19

93

19

94

19

95

19

96

19

97

19

98

19

99

20

00

20

01

20

02

20

03

20

04

20

05

20

06

20

07

Population

Energy use

Seaborne trade

CO2 emission

There has been strong growth in shipping

Trends – Population, Energy Use, Seaborne trade & CO2 emissions

Reductions in GHG (CO2) EmissionsDRIVERS FOR CHANGE

• Driven hardest by a limited number of governments– Supported mostly by EU governments, plus Japan,

Australia, Canada and a few others– Until recently only limited support in US (mostly

environmental interests)– Relatively little enthusiasm in much of the developing

world, but now changing ?• Environmental Lobby growing

– But not yet fully coordinated• Maritime industries showing considerable support

– Proactive involvement – Although “hesitant” on market based instruments

• Economic incentives strong– Fuel savings translate into potentially significant cost

savings; plus incentives for innovation & new technologies

Initiatives underway at the IMOInitiatives underway at the IMO

1998: IMO initiated work on Green House Gas emissions 2003: IMO Assembly adopted Resolution A.963(23): Policies and Practices Related to the Reduction of GHG from ShipsToday: Work continues through the MEPC

This year: we can confidently expect MEPC 59 to adopt -

• Mandatory Design Index for new ships (long term measure)

• Ship Efficiency Management Plan – existing ships:- Best practices to save energy used by the ship- Use of voluntary Operational Index (for each voyage & over a period of time/voyages)

Initiatives underway at the IMOInitiatives underway at the IMO

Ship Performance Index: CO2 / work done

e.g. tonnes of CO2 produced per tonne mile of cargo

• Energy efficiency design index for new ships incentivises designers and builders. At the next stage: The ship’s design index should be less than a maximum limit to be set by regulations.The maximum value will then be lowered over time.

• Voluntary operating index measures efficiency of ship in service.A management tool for owners and charterers to measure energy efficiency on a voyage. Incentivises the owner to keep hull and machinery “clean” and charterer to use the ship efficiently – capacity, routing and speed.

SEMP: Examples of Best PracticesSEMP: Examples of Best Practicesfor tanker emissions & energy efficiencyfor tanker emissions & energy efficiency

1. Programme for Measuring and Monitoring Ship Efficiency2. Voyage Optimization Programme

1. Speed selection optimization2. Optimised route planning3. Trim Optimization

3. Propulsion Resistance Management Programme1. Hull Resistance2. Propeller Resistance

4. Machinery Optimisation Programme1. Main Engine monitoring and optimisation2. Optimisation of lubrication as well as other machinery and equipment

5. Cargo Handling Optimization1. Cargo vapours control procedure on all crude tankers (80-90% reduction of

cargo vapours)2. Cargo temperature control optimization

6. Energy Conservation Awareness Plan1. On board and on shore training and familiarisation of company’s efficiency

programme2. Accommodation-specific energy conservation programme

162

168

174

20 30 40 50 60 70 80 90 100 110 % SMCR

Engineshaft power

SFO

C

ME/ME-C 100% SMCR optimised

MC/MC-C 100% SMCR optimised

ME/ME-C Part load optimised

3-4g/kWh

Economy mode:

3-4g/kWh

IMO is also reviewing possible economic IMO is also reviewing possible economic measures to reduce COmeasures to reduce CO22 emissions emissions

• Bunker Levy /Compensation Scheme• Emissions Trading Scheme• Other, e.g. differentiated charges

Industry has established Guiding principles and believe any measure should:

• Be effective in reducing global GHG emissions• Be binding on and applicable to all ships• Be cost effective• Not distort competition• Support sustainable environmental development without

penalising trade growth• Promote technical innovation and leading technologies• Be practical, transparent, fraud-free, easy to administer

Initiatives already under wayInitiatives already under way- parallel voluntary measures- parallel voluntary measures

For most ship types, some form of :• Speed optimisation• Voyage optimisation• Capacity optimisation

is already in hand.

For Tankers:• Liaison is encouraged between owners and charterers to optimise vessel speed and voyage schedules

http://www.ocimf.com/view_document.cfm?id=1147

Other initiatives under discussionOther initiatives under discussion

Pending the setting of mandatory upper limits for the Energy Efficiency Design Index of new ships, the tanker industry is discussing:

• The Establishment of a Reference Value for a New Ship (i.e. a Target)

• Development of a Rating System relative to the Reference Value

Similar to the performance rating of white goods

Other initiatives already under wayOther initiatives already under way- parallel voluntary measures- parallel voluntary measures

Ports / terminals

• Incentivised to improve port efficiency• Reward environmentally friendly ships with lower port

dues

Industry is currently developing a Port Efficiency IndexA Performance Indicator* of ship-port efficiency

measuring: Total CO2/ Unit of Cargo handled from arrival to

departure

*i.e. an extension of the IMO New Ship Design Index / Operational Index [ & similarly for SOx, NOx & VOC emissions]

The Good News continues….The Good News continues….

The Shipping Industry is committed to playing its part in finding solutions to reduce Green

House Gas emissions.

Industry:• Taking a pro-active approach to reductions in CO2

emissions• Encouraging innovation to improve performance• Continues to support global trade• Encourages modal shift to shipping to reduce overall

emissions

THANK YOU / GRACIAS

“Proud of our people, Proud of our ships”

For more information, please visit:

www.intertanko.com www.poseidonchallenge.com

www.shippingfacts.comwww.maritimefoundation.com