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IMO’s work on prevention of air pollution and control of GHG emissions from ships Adoption of mandatory Energy Efficiency measures for ships. Eivind S. Vagslid Technical Adviser to the Secretary-General Secretary-General’s Office IMO. Visit to IMO by Norwegian Shipping Forum

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Eivind s vagslid technical adviser to the secretary general secretary general s office imo

IMO’s work on prevention of air pollution and control of GHG emissions from shipsAdoption of mandatory Energy Efficiency measures for ships

Eivind S. Vagslid

Technical Adviser to the Secretary-General

Secretary-General’s Office

IMO

Visit to IMO by Norwegian Shipping Forum

London 18 October 2012


Imo specialised un agency
IMO – specialised UN agency

  • 170 Member States

  • IGOs and NGOs

  • London headquarters

  • Annual budget £30+ M

  • Secretariat: 300+ staff

  • 50+ Nationalities

  • Secretary-General: Koji Sekimizu, Japan

53 treaties covering all aspects of international shipping

Design – Construction - Equipment – Operation – Maintenance – Manning

Prevention – Response – Liability – Compensation

Safe, secure and efficient shipping on clean oceans!


Progress of measures at imo example
Progress of measures at IMO - example

Proposal to IMO

Committee

Incident

Idea,

development

Discussion, refer

to Sub-Committee,

Working Group

Development of draft

Regulation, circular,

Code or resolution

Adoption of

new regulation


Eivind s vagslid technical adviser to the secretary general secretary general s office imo

IMO’s Treaty Instruments

Safety and Security

SOLAS, STCW, Load lines, COLREGS, SUA

Pollution Prevention

MARPOL Annexes I to VI, Dumping (LC/LP), Intervention, AFS, [Ballast Water Management,] [Recycling]

Response and Reaction

SAR, OPRC, HNS Protocol,

[Wreck removal]

Liability and Compensation

CLC, IOPC Fund, Athens, Bunkers, HNS



Eivind s vagslid technical adviser to the secretary general secretary general s office imo

Ship emissions one of the last major ship pollutants to be regulated

Work started at IMO in the late 1980’s

Annex VI adopted in 1997, in force in May 2005,

Substantially revised 2005 – 2008

Revised Annex VI in force 1 July 2010

  • Prohibits ODS in line with the Montreal Protocol

  • Regulates exhaust gas: NOx & SOx (PM), and cargo vapours from tankers (VOC)

  • Energy Efficiency covered in new chapter 4 in force 1 January 2013


Eivind s vagslid technical adviser to the secretary general secretary general s office imo

Crude regulated

LNG

General Cargo

Reefer

Chemical

Bulk

Container

LPG

Product

RoRo/Vehicle

Rail

Road

0

50

100

150

200

250

300

g CO2 / ton*km

Range of typical CO2 efficiencies for various cargo carriers

Data: Second IMO GHG Study 2009


Efficiency improvements

World seaborne trade 1968-2008 regulated

Efficiency improvements

Fuel Consumption World Fleet

Source: Fearnley's Review


Second imo ghg study 2009
Second IMO GHG Study 2009 regulated

Tank

Tank

Tank

Tank

Bulk

Bulk

Bulk

Bulk

General Cargo

General Cargo

General Cargo

General Cargo

Container

Container

Container

Container

RoRo

RoRo

RoRo

RoRo

/Vehicle

/Vehicle

/Vehicle

/Vehicle

Deep sea ships

Deep sea ships

Ocean going

Ropax

Ropax

Ropax

Ropax

Cruise

Cruise

Cruise

Cruise

Regional ships

Regional ships

Coastwise

Other

Other

Other

0

0

0

50

50

50

100

100

100

150

150

150

200

200

200

250

250

250

CO

CO

CO

emissions (million tons / yr)

emissions (million tons / yr)

emissions (million tons / yr)

2

2

2

2007 shipping CO2 emissions 870 million tons

  • Future CO2 emissions:

    • Significant increase predicted: 200 - 300% by 2050 in the absence of regulations

    • Demand is the primary driver

    • Technical and operational efficiency measures will provide significant improvements but will not be able to provide real reductions if demand continues


Potential reductions of co2 emissions
Potential regulatedreductions of CO2 emissions


Eivind s vagslid technical adviser to the secretary general secretary general s office imo

Examples of efficiency measures: regulated

  • Technical:

    • Improved hull design and engine efficiency

    • More efficient propellers and rudders

    • Larger ships, combination carriers

    • Reduce installed power (speed)

    • Wind and solar power

    • Alternative fuels

  • Operational:

    • Speed and energy management

    • Improved routeing & less waiting

    • Enhanced fleet management and better utilization


2030 abatement potential
2030 – abatement potential regulated

Average marginal CO2 reduction cost per option - World shipping fleet in 2030 (existing and newbuilds)

Note; abatement potential for individual ship types and size segments vary widely


Eivind s vagslid technical adviser to the secretary general secretary general s office imo

  • IMO’s work on GHG control and Energy efficiency regulated

  • Work on air pollution prevention from late 1980s

  • In 1991 IMO’s Assembly called for the development of MARPOL Annex VI

  • The 1997 MARPOL Conference’s on Annex VI called for GHG action by IMO

  • First IMO GHG Study published in 2000 (1.8% - rapid and massive growth)

  • IMO’s GHG policy adopted by Assembly 23 in December 2003 (res.963(23))

  • Development of T&O measures, including EEOI, EEDI, SEEMP: 2000 – 2009

  • Voluntary application and testing by administrations and industry: (2005) 2009 ----

  • Basic principles adopted by MEPC 57 (April 2008)

  • Regulatory text developed 2009 – 2011

  • 2011: Adoption of new chapter 4 to MARPOL Annex VI: mandatory T&O measures

  • Second IMO GHG Study 2009 published (2.7%, significant reduction potential)

  • Development of an MBM from 2007, Expert Group reported in 2010

Technical - mainly applicable to new ships – EEDI

Operational - applicable to all ships in operation – SEEMP and EEOI

Market-based Measures (MBM) – carbon price for shipping, offsetting, incentive, may generate funds


Eivind s vagslid technical adviser to the secretary general secretary general s office imo

Breakthrough at IMO regulated

MEPC 62 (11 – 14 July 2011)

Mandatory technical and operational

measures adopted

Mandatory energy efficiency measures

Adopted (EEDI and SEEMP) for all ships

by inclusion of new chapter 4 in MARPOL Annex VI

Further development of supporting guidelines on:

Calculation of EEDI

EEDI Reference Lines (average of ships built 1999 – 2009)

EEDI Survey and Certification

Development and implementation of SEEMP

EEOI - Energy Efficiency Operational Indicator (MRV tool and benchmark)

Work on EEDI formulas for ship types not yet covered

Intersessional meeting in January 2012 prepared guidelines


New chapter 4 to annex vi
New Chapter 4 to Annex VI regulated

  • Regulation 19 – Application

  • Ship types: bulk carriers, tankers,

    container ships, general cargo ships,

    gas carriers, reefers and combination carriers

    - Covers 71% of international shipping CO2

    - 4 years waiver clause for Administrations

    in need of more time

  • Regulation 20 Attained EEDI

  • Regulation 21 Required EEDI

  • Regulation 22 SEEMP for all ships (400 GT)

  • Regulation 23 Promotion of technical co-operation and transfer of technology relating to the improvement of energy efficiency of ships


Eivind s vagslid technical adviser to the secretary general secretary general s office imo

Energy Efficiency Design Index - EEDI regulated

g of CO2 emitted

  • Attained EEDI ≦ Required EEDI values

cargo capacity x speed

-10% ships built between 2015 – 2020

-20% ships built between 2020 – 2025

-30% ships built between 2025 – [2030]


Required eedi regulation 21
Required EEDI – Regulation 21 regulated

Reduction factors (in percentage) for the EEDI relative to the EEDI Reference line


Ship energy efficiency management plan seemp onboard management tool
Ship Energy Efficiency Management Plan SEEMP - regulated Onboard management tool

  • Monitoring of emissions and energy performance of individual ships and encouraging continues improvement, using the operational indicator (EEOI) as monitoring tool and benchmarking

  • Improved voyage planning (Weather routeing/Just in time)

  • Speed and power optimization (single most important issue)

  • Optimized ship handling(ballast/trim/use of rudder and autopilot)

  • Improved fleet and ship management - utilization

  • Improved cargo handling

  • Energy management


Energy efficiency operational indicator eeoi

Fuel Consumption in Operation regulated

Actual Fuel

Consumption

Index

=

Cargo Onboard x (Distance traveled)

Energy Efficiency Operational Indicator - EEOI

  • MRV tool and benchmark for individual ships

  • A ship specific efficiency indicator to be used by all ships in operation (new and existing) obtained from fuel consumption, voyage data (miles) and cargo data (tonnes)


Guidelines adopted by mepc 63 march 2012
Guidelines adopted by MEPC 63 regulated(March 2012)

  • 2012 Guidelines on the method of calculation of the attained Energy Efficiency Design Index (EEDI) for new ships

  • 2012 Guidelines for the development of a Ship Energy Efficiency Management Plan (SEEMP)

  • 2012 Guidelines on survey and certification of the EEDI

  • Guidelines for calculation of reference lines for use with the EEDI

    MEPC 64 continued work in accordance with the work plan for technical and operational measures for ship types and propulsion systems not covered by the current EEDI formula


Eedi and seemp effects
EEDI and SEEMP Effects regulated

2020 - Combined effects

103 – 200 mill tonnes CO2

10 – 17% reduction over BAU

$20 – 80 bill fuel savings

Results of analytical study by Lloyds Register and DNV, commissioned by IMO. Document MEPC 63/INF.2


Eedi and seemp effects1
EEDI and SEEMP Effects regulated

2030 - Combined effects

237 – 423 mill tonnes CO2

18 – 26% reduction over BAU

$90 –310 bill fuel savings

Results of analytical study by Lloyds Register and DNV. Doc MEPC 63/INF.2


Eedi and seemp effects2
EEDI and SEEMP Effects regulated

Combined effects

over BAU

2020: 10 - 17%

2030: 18 – 26%

[2050: 35 – 41%]

Results of analytical study by Lloyds Register DNV. Document MEPC 63/INF.2


Effects of amendments
Effects of amendments regulated

Following the adoption, IMO commissioned a study from LR/DNV to estimate the effects, document MEPC 63/INF.2

  • 2020 – combined effects of EEDI and SEEMP

    103 - 200 million tonnes of CO2

    10 – 17% reduction over BAU

    US$ 20 – 80 billion annual fuel cost savings

  • 2030

    237 - 423 million tonnes of CO2

    18 – 26% over BAU

    US$ 90 – 310 fuel cost savings

  • 2050

    706 – 1320 million tonnes of CO2

    35 – 41% reduction over BAU


Eivind s vagslid technical adviser to the secretary general secretary general s office imo

Breakthrough at IMO regulated

“This is a landmark for the Organization, which has now made a positive contribution to worldwide efforts to stem climate change and, indeed, a landmark for the international community since, for the first time in history, it has been possible to legislate GHG emission reductions for an entire industry sector”

E.E. Mitropoulos

IMO Secretary-General

“…..this underscores the fact that IMO is best positioned to play a leadership role in addressing greenhouse gas emissions from international shipping.”

Ban Ki-Moon

UN Secretary-General

“I would like to congratulate IMO on this outstanding result….The adoption of mandatory efficiency standards for international shipping is a major step and a substantial contribution….”

Christiana Figueres

UNFCCC Executive Secretary


Capacity building needs
Capacity building needs regulated

  • Preliminary assessment presented to MEPC 61

  • Training of flag State and port State control officers

  • Training of seafarers in use of new technologies

  • Instil in the industry an energy efficiency culture

  • IMO’s Integrated Technical Co-operation Programme for the 2012-2013 biennium allocated funding for the first round of training activities to be undertaken before the entry into force of the amendments


Capacity building activities
Capacity building activities regulated

Workshops on CO2 emissions from shipping

  • Regional and national workshops on awareness raising and knowledge sharing to enhance global implementation and to enable States to take appropriate actions

  • Regional and national workshops on energy efficient ship operation for ship and shore based personnel

  • Regional and national workshops on energy efficient ship design for administrations, academia and industry

  • Regional workshops on port State control procedures and regulations related to energy efficiency and air pollution regulations under MARPOL Annex VI


Eivind s vagslid technical adviser to the secretary general secretary general s office imo
Technical Cooperation and Capacity Building activities planned for 2011 – 2013 related to EEDI and SEEMP

Model course for energy efficient ship operation developed by WMU – Finalized and issued in 2011. To be used for officers training by education institutes and the industry, important for future training

Capacity building:

$650,000 for training activities (e.g. EEDI verifiers)

$200,000 for fellowships and $200,000 for workshops

First awareness raising workshop in Durban 24 – 25 November

Agreement with KOICA for a South East Asian Climate Capacity Building Partnership in Maritime Transport - $700.000 for 2011 - 2013.

First workshop held in Singapore 16 – 18 November 2011

A total of 12 workshops in the region 2012 – 2013

Dialog with donors for a global project: $10 – 40 millions


Eivind s vagslid technical adviser to the secretary general secretary general s office imo

Transfer of technology, technical assistance and capacity building on energy efficiency

Transfer of technology covered in many IMO instruments, regulation 23 of new Chapter 4 goes beyond similar obligations in other treaties as it encourages cooperation bilaterally, through IMO or other organizations

Transfer of technology outside IMO’s ITCP

Work on draft resolution together with the regulatory text with the intention to adopt them as a package, not possible to reach consensus, still pending, needs to be resolved urgently


Eivind s vagslid technical adviser to the secretary general secretary general s office imo

MARPOL Annex VI coverage building on energy efficiency


Eivind s vagslid technical adviser to the secretary general secretary general s office imo

Breakthrough at IMO building on energy efficiency

Adopted by majority as full consensus could not be reached despite strenuous efforts, however no division between developing and developed countries (Non-Annex I/Annex I).

The majority of developing countries eligible to vote supported the adoption, including all LDC and SIDS


Eivind s vagslid technical adviser to the secretary general secretary general s office imo

Will the EEDI and SEEMP be enough? building on energy efficiency

  • They probably would if demand for shipping stopped growing. BUT…

    • -World trade is likely to keep increasing

    • -Emerging economies generate need for shipping

    • -Developing countries depend on sea transport for development

  • So, the reductions achieved by EEDI and SEEMP may be offset by increase in world trade and need for sea transport

  • That’s why we need a market-based measures


Market based reduction measures mbm
Market-based reduction measures – MBM building on energy efficiency

An MBM under IMO would serve two main purposes

  • An economic incentive for enhanced energy-efficient both trough design and operation (in-sector reductions)

  • Off-setting in other sectors (out-of-sector reduction)

    10 MBM proposals by governments and NGOs under review

    Charges, ETS, Efficiency based, Incentive Schemes, Rebate Mechanism

    Three main streams:

    GHG Fund: Offsetting above a target line

    ETS: 100% auctioning (global/national)

    - remaining proceeds: R&D, TC, improve port/maritime infrastructure in developing countries, Climate Finance

    Efficiency based (EEDI): Closed trading of credits


Mbm expert group established by mepc 60
MBM Expert Group established by MEPC 60 building on energy efficiency

  • The analysis of the proposed MBM addressed, inter alia:

    Environmental effectiveness, cost-effectiveness and potential impact on trade and sustainable development

    Incentives to technological change and innovation

    Practical feasibility and the need for technology transfer to and capacity building within developing countries, mobilizing climate financing

    Relation with other conventions (UNFCCC, Kyoto Protocol and WTO) and compatibility with international law and IMO’s regulatory framework

    Additional administrative burden and legal aspects for National Administrations

    The potential additional workload, economic burden and operational impact for individual ships, the shipping industry and the maritime sector


Mbm expert group established by mepc 601
MBM Expert Group established by MEPC 60 building on energy efficiency

Developed methodology to asses, inter alia, possible impacts on end consumers and selected industries, in particular in developing countries, and analyzed 10 MBMs proposed by Governments/ NGOs

Selected commodities and trades:

Iron ore (Dirty Bulk) – Crude oil (Tankers) – Grains (Clean Bulk) – Clothing and furniture (Container)

Assumptions and growth scenarios:

Size and composition of world fleet – growth scenarios (IPCC A1B: 1.65% and B2: 2.8%) – fuel and carbon prices – uptake of technology – etc.

Elasticity estimates of freight rate to fuel price increase:


Nautical distance weighted by bilateral trade
Nautical distance weighted by bilateral trade building on energy efficiency

MBM-EG concluded that those countries most affected would be those furthest away from their trading partners

Ad valorem maritime transport cost Australia

Ad valorem maritime transport costs for Chile

Average global increase in freight costs equal to a 10% fuel price increase by introducing MBM


Eivind s vagslid technical adviser to the secretary general secretary general s office imo

Impact Study by MBM-EG building on energy efficiency

Cost pass-through range from 10% cent to over 100%

- Great variations between different trades, e.g., ore/containers


Emission reductions in 2030 modelled emission reductions across various scenarios
Emission reductions in 2030 building on energy efficiencyModelled emission reductions across various scenarios

* Included if the mandatory EEDI is adopted by the committee


Potential climate change financing modelled remaining proceeds across various scenarios
Potential climate change financing* building on energy efficiencyModelled “remaining proceeds” across various scenarios

* Excludes financing of out-of-sector emission reductions


Eivind s vagslid technical adviser to the secretary general secretary general s office imo

Impacts of an MBM – Conclusions: building on energy efficiency

Impacts on consumers depend on stringency of MBM, e.g. the carbon price, if it is equal to a 10% increase in fuel price, it means a 2 – 10% increase in transport costs and an increase of 0.0 – 0.2% on end prices

Trading distances - Market share Domestic Domestic production - Value-to-weight ratio

Impacts on developing countries will vary by country independent of level of economic development. As a result, developing countries, especially SIDS and LDCs, should not be treated as a collective bloc in assessing impacts

MEPC (65) will continue work on MBMs and on further impact studies with a view to select a suitable instrument in 2015


Eivind s vagslid technical adviser to the secretary general secretary general s office imo

The needs and circumstances of developing countries in the context of climate finance

There will be impacts from introducing and MBM, but they will be dwarfed by increases in energy and food prices

Compensating affected consumers and industries cent by cent is not possible, a workable proxy is needed

An MBM is intended to drive behavioural change

– any compensation will undermine this purpose

To use 25 – 40% of revenues to compensate all developing countries by the same key will deprive the most vulnerable countries/peoples for large climate finance opportunities

A targeted approach needed where only those most affected will be compensated (threshold/GDP per capita)


Imo s mbm impact study to continue
IMO’s MBM impact study to continue context of climate finance

MEPC 65 (May 2013) will continue work on MBMs and on further impact studies, selection of instrument 2015

Impact on import costs = 10% fuel price

MBM cost in relation to world imports


Eivind s vagslid technical adviser to the secretary general secretary general s office imo

What is the consensus view context of climate finance

of the world’s most eminent scientists?

IPCC Fourth Assessment Report (FAR)

  • - A 1ºC to 2C increase in temperature above 1990 levels will place many unique and threatened systems, including many biodiversity hotspots, at significant risk.

  • A global meantemperature increase of more that 2C will lead to increasing risk of species extinction and climate havoc

  • The CO2 concentration must not exceed 450 ppm to keep the global warming within 2C above 1990 level by 2100

  • To avoid this, CO2 emissions must peak

  • within 10 – maximum 15 years


Eivind s vagslid technical adviser to the secretary general secretary general s office imo

Expected in 2100 context of climate finance

The World’s challenge:Increasing CO2 concentrations

Today 2005

Source: IPCC FAR 2007


Eivind s vagslid technical adviser to the secretary general secretary general s office imo

What is the world community doing? context of climate finance

  • First step: Adoption of the United Nations Framework Convention on Climate Change (UNFCCC) in 1992.

    • - Aimed at stabilizing atmospheric concentrations of greenhouse gases to avoid “dangerous anthropogenic interference” with the climatesystem.

  • Second step: Adoption of the Kyoto Protocol in 1997

    • Commits developed countries (Annex I Parties) to reduce their overall emissions by an average of 5.2% below 1990 levels between 2008-2012.

  • Third step: Bali Action Plan – Copenhagen Accord – Cancun Agreements – Durban Platform (2011)

  • - Universal legal treaty covering all parties, to be adopted by 2015 and in force by 2020


  • Eivind s vagslid technical adviser to the secretary general secretary general s office imo

    UNFCCC debate on allocation of emissions from international shipping 1992 - 1997

    1 No allocation

    2 Proportional to national emissions

    3 Fuel sales

    4 Nationality of company

    5 Flag

    6 Route of vessel

    7 Route of cargo

    8 Country of origin of cargo

    9 Emissions in territorial waters

    • Kyoto Protocol Article 2.2

    • “The Parties included in Annex I shall pursue limitation or reduction of emissions of greenhouse gases not controlled by the Montreal Protocol from … marine bunker fuels, working through … the International Maritime Organization, …”


    Eivind s vagslid technical adviser to the secretary general secretary general s office imo

    Distribution of the world fleet March 2008 shipping 1992 - 1997

    ships above 400 GT

    Article 1(b) of the IMO Convention

    Encourage removal of discriminatory actions … promote the availability of shipping without discrimination … not be based on measures designed to restrict the freedom of shipping of all flags ..;


    Shipping under unfccc
    Shipping under UNFCCC shipping 1992 - 1997

    Consultations in UNFCCC is slow and has not lead to an agreed text as

    there are three challenging obstacles:

    • How should the balance between the basics principles under the two conventions be expressed in the new treaty text (UNFCCC and its fundamental CBDR principle, and on the other hand, the IMO constitutive Convention with its non discriminatory approach)?

    • Should the new UNFCCC treaty state how revenues from a market-based instrument for international shipping under IMO should be distributed and used (climate change purposes in developing countries)?

    • Should a reduction target be set for international shipping, and if so, what should the target be and should it be set by UNFCCC or IMO?

      No text on international shipping in the Durban outcome other than to continue address the issue


    Links with and effects on unfccc negotiations
    Links with and effects on UNFCCC negotiations shipping 1992 - 1997

    As the regulations address ships and not States, and as they do not impose any reduction obligations, quantified or otherwise, on States, as well as the fact that the cost of introducing EEDI/SEEMP will be borne by the industry, there are no incompatibility issues with UNFCCC

    Kyoto Protocol’s Article 2.2 is still interpreted differently by Parties

    Did adoption of mandatory T&O by MEPC 62 settle the issue?

    Disbursement of revenues from an MBM for international shipping under IMO is seen by many as a way to accommodate both sets of principles under the two conventions:

    - CBDR under UNFCCC and non-discrimination under IMO

    An MBM for international shipping could be a predictable source to the Green Climate Fund and thereby facilitate the UNFCCC negotiations


    Climate finance under unfccc
    Climate Finance under UNFCCC shipping 1992 - 1997

    The Copenhagen Accord noted the need for climate finance

    $30 billions annually 2010 – 2019 and $100 billions annually from 2020

    The AGF report highlighted international shipping as a suitable and predictable source for climate change funding.

    $ 3 – 8 billions from international shipping – work should continue in IMO

    The Cancun Agreements agreed a process to establish the Green Climate Fund which was formally established in Durban and made operational by 2012 under the World Bank, process to identify funding sources in 2012

    G-20 requested WB/IMF to explore potential sources

    Report to be considered by Ministers of Finance early November for submission to Durban. Elaborates on possible approaches but focuses on taxation not on the combined effect of an MBM: reduction and finance


    Eivind s vagslid technical adviser to the secretary general secretary general s office imo

    Durban outcome affecting IMO’s work shipping 1992 - 1997

    Reported in MEPC 63/5/5

    The mandate of AWG-LCA extended by another year

    International transport part of mitigation under Sectoral Approaches

    Seven options for text on international transport in new treaty or COP decision

    Establishment of the Green Climate Fund

    Work programme under LCA to identify sources (public and private)

    Several proposals to use international shipping as source (AGF and G20)

    Direct links with IMO’s MBM work – proposed text on “no net incidence”

    Agreement on Carbon Capture and Storage as CDM

    Sub-seabed carbon storage regulated by the London Protocol


    Summary imo s ghg wor k
    Summary - IMO’s GHG Wor shipping 1992 - 1997k

    • Mandatory technical and operational measures adopted in July 2011 – in force 1 January 2013

      Important step - Energy efficiency standard for new ships, operational measures for all ships - Significant reductions

    • MBM for international shipping under IMO

      Continued development - Possible adoption of treaty in 2015

    • Climate Finance and the Green Climate Fund may be the key to unlock the UNFCCC/IMO deadlock

      Application to all ships via IMO is the only way to raise revenues from international maritime transport (precedence in IOPC)

    www.imo.org