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What are the viable options for the shipping industry by Erik.Ranheim@INTERTANKO.com Manager Research and Projects London 12 November 2008. The Challenges. The world demands greener shipping Emission from shipping is dirty and harmful for the health and the environment

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What are the viable options for the shipping industrybyErik.Ranheim@INTERTANKO.comManager Research and ProjectsLondon 12 November 2008

the challenges
The Challenges
  • The world demands greener shipping
  • Emission from shipping is dirty and harmful for the health and the environment
  • GHGs emission from shipping is not directly regulated under the Kyoto protocol
  • IMO assumed to regulate GHG emission
  • Must react swiftly
co 2 emissions per unit load by transport mode
CO2 Emissions per Unit Loadby Transport Mode

Large Tanker

1

Large Containership

3

Railway

6

Coastal Carrier

11

Standard-size

Commercial Truck

49

Small-size

Commercial Truck

226

Airplane

398

0

100

200

300

400

Units Relative

Shipping energy efficient

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

4

trends co2 emission energy use global trade
Trends – Co2 emission, energy use, global trade

Index

There has been strong growth in shipping

Source: Fearnleys/INTERTANKO

engine break specific fuel consumption
Engine break specific fuel consumption

g per kWh

Source: Lloyd’s Register

Fuel efficiency in shipping has has improved

measures for current ships essential fleet
Measures for current ships essential Fleet

Cleaner, Simpler and more Efficient ships

Above 400 GT:

63,600 ships

11,200 on order

26,000 <15 years

Source: LRFairplay

switching to cleaner fuel will
Switching to cleaner fuel will

Reduce overall global emissions from ship funnels

and will therefore

in addition leading to a much cleaner and sounder environment

Reduce the amount of GHGs, due to

Less fuel consumption,

and

The switch to cleaner fuelwill provide better opportunities for developing more fuel efficient engines

Cleaner, Simpler and more Efficient ships

Revision of Annex VI will also reduce CO2 emission

industry initiatives ship efficiency management plan semp
Industry initiativesShip Efficiency Management Plan SEMP
  • SEMP for each ship in operation
  • SEMP to contain:
    • Best practices to save energy
    • Voluntary Operational Index (for each voyage & over a period of time/voyages)
    • Other voluntary operational measures
    • Energy inventory
  • INTERTANKO, ICS, BIMCO, INTERCARGO work on a model SEMP guideline for IMO
industry initiatives ship efficiency management plan
Industry initiativesShip Efficiency Management Plan
  • INTERTANKO Best Practices – to be approved by the Council (Nov. 2008)
  • OCIMF “Energy Efficiency and Fuel Management” – an appendix to TMSA 2
  • OCIMF opens for consideration of c/p terms to optimise the voyage and other operations to save energy during transportation
best practice on tanker emissions energy efficiency
Best Practice on tanker emissions & energy efficiency

1. Programme for measuring and monitoring ship efficiency

2. Voyage optimization programme

  • Speed selection optimization
  • Optimised route planning
  • Trim optimization

3. Propulsion Resistance Management Programme

  • Propeller Resistance
  • Hull Resistance
best practice on tanker emissions energy efficiency1
Best Practice on tanker emissions & energy efficiency

4. Machinery optimisation Programme

  • Main Engine monitoring and optimisation
  • Optimisation of lubrication as well as other machinery and equipment

5. Cargo handling optimization

  • Cargo vapours control procedure on all crude tankers (80-90% vapour reduction) Cargo temperature control optimization

6. Energy conservation awareness plan

  • On board and on shore training and familiarisation of company’s efficiency programme
  • Accommodation-specific energy conservation programme
best practices
Best Practices

Advice, input:

*Class

*Charterers

*Yards

*Other owners

*Others

Participation from a wide range of tankers

Applicability/effectiveness

Dynamic continuous improvement

INTERTANKO

Membership

3,100 tankers

Various, individual measures

Monitoring, assessment

Adjustment/corrective action

Depend on fleet characteristics

INTERTANKO a forum for exchange of information and experience

fuel efficiency design index
Fuel efficiency design index
  • Measuring stick for shipbuilders to assess fuel efficiency/CO2 emissions
  • Incentive for shipyards will create energy efficient designs to be competitive
  • Wide support in IMO, except
  • Some developing countries*
  • Need baseline (what constitutes the best ship today)

Sea trial Esther Spirit

  • All suggestions by INTERTANKO on design index formula were agreed at MEPC 58:
    • Use value of ME power at 75% MCR
    • Use AE power at 50% MCR
    • SFCs at these values are given by the engine’s EIAPP Certificates
    • Sea trails to be part of the verification
the co 2 operational index
The CO2 operational index
  • MEPC 58: voluntary tool to monitor each ship’s fuel consumption
  • An instrument for evaluating quantitatively the effect of operational fuel efficiency measures, such as speed reduction or optimum navigation
  • No direct link to design index
  • Monitored over time by a Rolling Average of the fuel consumption per tonne mile for last 10 voyages (as proposed by the industry)
average co2 emission aframax
Average CO2 emission Aframax

Grams/tonne mile

Voyage 13: 152 grams per tonne-mils

a market based instruments mbi should
A Market Based Instruments (MBI) should
  • Reduce CO2 emission levels in real terms by additional amounts to normal reductions
  • Not unduly distort competition
  • Ensure simple allocations of emission allowances
  • Be non-discriminating of ship types and flags
  • Be difficult to evade.
  • Be acceptable to Kyoto Annex I as well as developing countries.
  • Be legally, politically and institutionally acceptable.
  • Be easy to administer, monitor and enforce.
  • Preferably be global and regulated by IMO
levy on bunkers danish proposal
Levy on bunkers - Danish proposal

Challenges:

  • Legal, competence to establish such a scheme
  • Administrative who sets, collect, disburses and monitors revenues, and
  • For what purpose, and
  • Will it lead toactual emission reduction?

Met with resistance and regarded as tax

  • Possible application of an independent international GHG fund:
    • Acquisition of emission quotas/credits generated in other industrial sectors
    • Funding projects in developing nations
    • Funding IMO Technical Cooperation program
international compensation fund for ghg emissions from ships
International Compensation Fund for GHG Emissions from Ships
  • International Compensation Fund to be passed on to the customers, i.e.
  • No direct effect on the operators
  • Independent of the value of the goods being transported
  • Must be global, independent of flag
  • Based on United Nations Convention on the Law of the Sea (UNCLOS)
  • Principle of no more favourable treatment of ships applied through Port State Control
  • Based on UNFCCC principle of common but differentiated responsibilities and capabilities
  • Should be allocated to specific compensation aims to be decided by the contracting parties
  • Proposed by Denmark, Ref International Oil Pollution Compensation Funds (IOPC)
shipping set for reduction in emission to air
Shipping set for reduction in emission to air
  • Cleaner, reduced emission from shipping under way, by
  • Sharing of information to develop Best Practices will reduce emission, and
  • Technical advances to improve fuel efficiency and reduce CO2 emission will be made
  • Market based instruments are controversial and complicated – but may be introduced on regional basis (ref. Europe)
  • INTERTANKO prepared to continue to take the lead and to be a driver in terms of practical and realistic measures for the industry