The Paris Agreement and the prospectus and challenges of

the Maritime sector

Theodoulos Mesimeris Senior Environment Officer Department of Environment Ministry of Agriculture, Rural Development and Environment

16.9.2016

The Paris Agreement – Prospects and Challenges

Introduction to Paris Agreement

At the Paris climate conference (COP21) in December 2015, 195 countries adopted the first-ever universal, legally binding global climate deal.

The Paris Agreement is a bridge between today's policies and climate-neutrality before the end of the century. The agreement is due to enter into force in 2020.

Governments agreed, among others to take serious efforts to mitigate Greenhouse gases emissions, the main one of which is the carbon dioxide.

2

Paris Agreement is “silent” on Shipping and Aviation

• The 195 nations at the COP21 climate change summit in Paris unanimously reached an agreement on carbon emissions on December 12 – without including directly the shipping and aviation industries.

• Shipping accounts for about 3 % of global warming, and aviation accounts for 5 %.

• In recent years their emissions have grown twice as fast as those of the global economy and they could make up around 40% of world CO2 emissions in 2050 if left unregulated, according to a scientific study published by the European Parliament.

The Paris Agreement Vis-a-vis Maritime

Maritime CO2 emissions are projected to increase significantly

in the coming decades

• Depending on future economic and energy developments, BAU

scenarios project increase by 50% to 250% in the period to 2050

• Further action on efficiency and emissions can mitigate emissions growth, although all scenarios but one project emissions in 2050 to be higher than 2012

• Demand for transport of unitized cargoes projected to increase

most rapidly in all scenarios

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Shipping needs to be regulated

• MRV Regulation

- EU Regulation 2015/757 on the monitoring, reporting and verification of carbon dioxide emissions from maritime transport, and amending Directive 2009/16/EC

• MRV Regulation aims

– Accurate Monitoring, Reporting and Verification of CO2 from ships (above 5000 GT) that are Arriving or Departing from EU ports in order to promote the reduction of CO2 emissions from maritime transport in a cost effective manner.

Scope of Regulation

• The Regulation applies to Ships above 5000 GT - CO2 emissions released during their voyages Among others, it regulates: • Complete and cover CO2 emissions from the combustion of

fuels, while the ships are at sea as well as at berth • Obtain, record, compile, analyse and document monitoring

data, including assumptions, references, emission factors and activity data, in a transparent manner that enables the reproduction of the determination of CO2 emissions by the verifier

• Enable reasonable assurance of the integrity of the CO2 emission data to be monitored and reported

Challenge of introducing LNG

• Emissions of carbon dioxide from aviation and shipping are growing at a combined rate of 3-5 percent annually.

• Efforts by the United Nations bodies overseeing these sectors to agree and adopt strategies to address climate change have moved forward but critical action areas remain to be fully addressed.

• The main challenge is the introduction of LNG as an alternative fuel

Why LNG as fuel for ships?

• LNG as a fuel is both a proven and available commercial solution. It offers huge advantages, especially for ships in the light of ever-tightening emission regulations.

• While different technologies can be used to comply with air emission limits, LNG technology is the only option that can meet existing and upcoming requirements for the main types of emissions (SOx, NOx, PM, CO2).

European Commissions' study on LNG as a shipping fuel

• In March 2015 EC presented preliminary results on the perception of the risks and opportunities of LNG as a shipping fuel

• The results show:

• Takes into account EU policy aiming at reductions of emissions from shipping and looking for alternative energy sources.

• The study took in to account the recent legislation on: - Directive on sulphur content in marine fuels 2012/33/EU; allows the

use of LNG - Directive of Deployment of alternative fuels infrastructure

2014/94/EU ; aims at ensuring minimum coverage of LNG refuelling points

Environmental advantages remain undisputed

• From the study it becomes clear that on the one hand, the major motivation for stakeholders to engage in LNG as a shipping fuel is to be compliant with Emission Controlled Area (ECA) zone requirements and the related positive environmental effects.

• On the other hand, the most critical issues for further deployment are the financing of LNG as a fuel and the pricing of LNG itself.

• For shipping companies, LNG is a challenging issue to be

exploit.

• The lack of existing bunkering infrastructure for LNG in ports is another quite important issue for consideration.

Conclusions

• The Paris Climate Change Agreement identifies a clear goal:

- “holding the increase in the global average temperature to well below 2°C above pre-industrial levels and to pursue efforts to limit the temperature increase to 1.5 °C above pre-industrial levels.”

• IMO has contributed, and will continue to contribute, to global GHG reduction goals. IMO and its Member States recognize the important need for international shipping, which accounts for 2.2% of CO2 anthropogenic emissions, to support global efforts to mitigate the impact of climate change.

• International shipping and aviation will have to cap their greenhouse gas emissions (GHG) soon for the world to meet the ambitious goals laid down in the Paris Climate Change Agreement.

• The International Civil Aviation Organization (ICAO) and International Maritime Organization (IMO) have the challenge of reducing global emissions from their respective sectors.

Conclusions

• The Commission's analysis shows the MRV system will be economically profitable for the shipping sector.

• The MRV system would also reduce emissions by up

to 2% compared with a 'business as usual' scenario. • While yielding environmental and economic

benefits, the EU MRV system is also designed to contribute actively to an IMO agreement on global measures to reduce shipping emissions based on MRV systems.

Conclusions

For further information:

tmesimeris@environment.moa.gov.cy

Tel. +357 22408948

Thank you for your attention!