The INTERTANKO option for the revision of Annex VI - IMO regulation for the Prevention of Air Pollution from shipsbyErik.Ranheim@INTERTANKO.comManager Research and ProjectsCMAC NATIONAL MEETING Ottawa 5 November 2007‘
INTERTANKOfor safe transportation, cleaner seas and free competitionAccidental oil pollution into the sea bn tonne-m 1000 ts spilt Source: ITOPF/Fearnleys
Shipping and the environment • ~60,000 ships (above 400 GT) • 7,507,000,000 ts goods / year • average distance 4,400 miles • >90% of total world trade • Consumes 9% of world oil • CO2 emission share < 1/2 oil consumption shareSimple infrastructure • Economics of scale: One VLCC = 8,000 tank trucks • 1 ltr of fuel on a modern Very Large Crude Carrier moves 1 tonne of cargo > 2,800 km but
Trends – Co2 emission, energy use, global trade Index Source: Fearnleys/INTERTANKO
Shipping and the environment • Fuelled by the dirtiest part of the barrel • resulting in emission of: • SOx • NOx • uncombusted hydrocarbon • Heavy metals • Soot
Reducing harmful emissions from ships • Onboard abatement technology • Scrubbers, filters, separators, catalysts • SECAs/NECAs • Sulphur/Nitrogen Emission Control Areas • Type and quality of fuel • Heavy fuel oil = a blending of refinery residues and distillate (up to 30% dist.) • Distillates = gasoil and diesel
The world is moving away from HFOOil consumption by product - % share mbd % share Source: INTERTANKO/BP Review
Refineries are moving away from HFO • The new line at Neste’s Porvoo refinery will use residue oil to produce 1 m ts per year sulphur-free, clean motor fuels, particularly diesel fuel. • The fuel will meet the latest environmental requirements in Europe and N America. The refinery will be capable of considerably increasing the refining of very profitable products, such as sulphur-free diesel fuel.
Refineries are moving away from HFO • ……..company’s early commitment in the mid-1990s to making cleaner fuels, and by being proactive about finding the technology needed to achieve this.
Refineries are moving away from HFO • Residue upgrading benefits both the refinery and the community: • “Enhance financial performance • Eliminate high sulphur fuel projects • Replace obsolete utility faculties • Meet future product specifications • Reduce total refinery emission • Provide cost-effective H2 production based on converting residue • Produce power for refinery use and export • Increase feedstock flexibility – chance to use low-cost crude oils. • Secure or even expand and business opportunities” Enhance financial performance reduceemission more business opportunities Source: http://www.shell.com/home/content/globalsolutions-en/knowledge_centre/pres_speeches_papers/2006/refinery_residuals_010206.html Dr. Joachim Wolff: license and service manager for liquid and gas gasification for Shell Global Solutions. PhD from university of Dresden in thermodynamics. Piete Zuideveld: departmental manager of the gasification and hydrogen manufacturing technical department in Shell Global Solutions. Working for Shell for 27 years and has experience in gasification, gas treating, gas to liquids and gas business development.
Shipping needs INTERTANKO seeks • Significant reduction of harmful emission • Long-term, predictable and solid IMO standards • A feasible, realistic and sustainable solution • No unilateral nor regional regulations
Why not scrubbers? • Still under testing (2 ship limited scale) • Large • Expensive • Difficult (impossible?) to install • CO2 emission (buffering effect) • Leaves hazardous waste • Waste disposal – no-one wants it • Tonnes of seawater need to be processed/added We are involved in transportation – not waste treatment
Why not SECAs? • Air pollution knows no borders • Most ships operate close to shore • International shipping needs global regulations • Switching fuels – a safety problem • More SECAs on the way- and more problems • LSFO availability • “ ..refineries have a clear incentive for further conversion of its entire residual streams to distillate products compared to residue desulphurisation to produce more LSFO” (CONCAWE) Nov 2007 May 2006 SECAS Confusions, Complexities, Criminalisation ? Sulphur Emission Control Areas, the Baltic and the North Sea
Why switching to distillates? • A simple solution : • 1. Significant global reduction of emission • SOx, - 60 - 80%, • PM, - 80 - 90%, • NOx, - 15%, • No heavy metals, • Less soot • 2. A more healthy environment for crew and dockworkers • 3. No onboard waste • 4. Reduces overall fuel consumption (and CO2) • 5. Better and easier control or monitoring of ships Cleaner, Simpler and more Efficient ships
Why switching to distillates? • ..continue: • 6. Fewer engine breakdowns and potential pollution accidents • 7. Less pollution when spilled • 8. Provides opportunity for the development of more efficient engines (w. less emission) • 9. Applies to all ships and all • current engines • 10. No safety problem in connection with switching fuels Cleaner, Simpler and more Efficient ships
Switching to distillates CO2 balance • +CO2 emission when continuing to burn HFO: • buffering from scrubbers • higher fuel consumption NOx control • running of scrubbers • heating of HFO • burning handling of waste • running of abatement equipment • +CO2 emission when burning distillates: • conversion of HFO to distillates - which may be balanced by increased power production • construction of conversion plants • handling of waste from conversion plants • less fuel consumption
Status • IMO Group of Experts – report end 2007 • Basic data needed • Status quo- fleet, emission • Costs - investment in refinery upgrading, scrubbers • Costs to the environment and society – pollution, health • Council’s conclusion –2008 • U.S. considers own legislation if the IMO does not deliver IMO Group of Experts will provide figures and need input
Cleaner shipping • INTERTANKO: a long-term practicable measure to reduce emission necessary • Shipping is energy efficient - but burning the dirtiest part of the barrel causes pollution • The oil industry is moving towards cleaner fuels • There are 10 good reasons for switching to distillates • Large investments necessary over a prolonged period - no matter the solution • The costs involved are the costs to the society which will mainly be the impact on the environment (cost effect of increased freight will be marginal)
Bunker price $/tonne