World Bunkering > News > Winter 2010 > A tidal wave of regulation for shipping?

Quote of the quarter

International Chamber of Shipping (ICS) secretary general Peter Hinchliffe said in October that a “tidal wave” of environmental regulation was racing towards shipping and would coincide , “or perhaps collide is a better word”, over the next six or so years and initiate major cost increases.

Sulphur emissions

Governments at IMO have agreed with a formal ICS proposal that early consideration should be given to developing a suitable mechanism for review of the availability of low-sulphur marine fuels. ICS says: “The changes to MARPOL Annex VI, agreed in 2008, represent a heroic compromise between governments, the shipping industry, oil producers and environmental interests.

However, implementation will be far from easy, particularly when the sulphur permitted in fuel is reduced to 0.1% in Emission Control Areas (ECAs) in 2015.” ICS notes that while there is a formal mechanism in the IMO agreement to review progress in meeting the demand for fuel with the 0.5% sulphur content that is meant to be used outside of ECAs by 2020, the shipping industry body has been pressing IMO to start work now on developing a methodology that can consider all of the major changes required by the radical new regime. “Encouragingly,” ICS comments, “IMO has established a correspondence group for this purpose.”

When MARPOL Annex VI measures on sulphur and nitrogen oxides (NOx and SOx) were being debated, some industry voices argued that the need to reduce carbon dioxide (CO2) emissions should be taken into account when deciding allowable sulphur levels in marine fuel. Factors raised by the industry included the extra carbon emissions generated in producing distillate fuel and the cooling effect of sulphur particles in the atmosphere. This assessment didn’t really happen, but in October climate change adviser for Shell, David Hone, drew attention in his blog to the cooling effect issue.

He reported a discussion at a conference held by Canadian think tank Centre for International Governance Innovation. The discussion started with the “current reality” of sulphur being artificially pumped into the troposphere through the worldwide use of high-sulphur fuel Oil (HSFO) in ships (and from other sources). Mr Hone noted that a recent analysis showed that while the global annual average cooling effect of shipping is currently some -0.6 W/m2 (compared to the current additional radiative forcing from post-industrial CO2 now approaching 2 W/ m2), this would reduce to -0.3 W/m2 in the case of a global 0.5% sulphur specification. That is to say, achieving IMO’s sulphur cap target would add to global warming by 0.3 W/m2 of warming.

Scrubbers “can work”

Exhaust Gas Cleaning Systems Association director Don Gregory told delegates at October’s Interferry Conference: “After a rocky start, six or seven ships now have real systems that are taking out real emissions. We’ve demolished the myth that it’s a good idea that will never work.”

He predicted a $500 per tonne price premium for 0.1% fuel and compared this with the $1 million to $4 million cost of abatement equipment. Mr Gregory said: “There’s no doubt that technology has a cost but it’s a one-off and then you have the benefit of flexibility on fuels.”

Greenhouse Gases – MEPC

IMO’s Marine Environment Protection Committee (MEPC) met for its 61st session in London from 27 September to 1 October. The committee spent much of its time debating market-based measures (MBMs) for emissions reduction without achieving any real progress. In contrast, work on developing measures to improve the energy efficiency of ships did move this process along.

Continued opposition to market based measures which do not follow the Kyoto concept of common but differentiated responsibility to reduce greenhouse gas emissions from several major countries, including Brazil, China and Saudi Arabia, ensured no proposals will be ready for the 2010 United Nations Climate Change Conference to be held in Cancún, Mexico, from 29 November to 10 December.

The MEPC agreed Terms of Reference for an intersessional meeting of the Working Group on GHG Emissions from Ships, to be held in March 2011, tasking the group with providing an opinion on the compelling need and purpose of MBMs as a possible mechanism to reduce GHG emissions from international shipping and further evaluating the proposed MBMs considered by the Expert Group, including the impact of the proposed MBMs on, among others, international trade, the maritime sector of developing countries, LDCs and SIDS, as well as the corresponding environmental benefits. A report from the intersessional group will be submitted to MEPC 62 in July 2011.

While there was progress on development of the Energy Efficiency Design Index (EEDI) and the Ship Energy Efficiency Management Plan (SEEMP), both of which have been previously disseminated for voluntary use, there was disagreement over whether these should become mandatory for new ships

Greenhouse Gases – Cancun

Reuters reported that Norwegian Prime Minister Jens Stoltenberg, who is co-chair of the panel advising on how to raise $100 billion a year for funding measures to counter climate change, confirmed that it would recommend a form of carbon pricing. He told Reuters that it would be “challenging but feasible” to raise $100 billion a year from 2020 onwards to help developing countries tackle climate change.

This report increased concern within the shipping industry that IMO’s failure to be in a position to present market-based measures at Cancun could lead to a levy being imposed outside the auspices of IMO. Speaking at the Greek Shipping Summit in early October, ICS chairman Spyros Polemis said that ICS and the shipping industry fully support continuing work at IMO to address shipping’s CO2 emissions.

“However,” he warned, “while we strongly support a bankable deal being negotiated at IMO, we also have to be aware of the parallel discussions taking place within UNFCCC circles, following the ‘Copenhagen Accord’ last year, which will be much harder for us to influence. Within UNFCCC circles, as opposed to IMO, we are greatly concerned that environment ministries may give much more attention to the money that could be raised from international shipping, as opposed to the emissions reductions that might be achieved.”

He continued: “It is most important that we resist any notion that shipping is some kind of ‘cash cow’ which might pay more than its fair share for the sake of political expediency in order to bring along the developing nations into a global agreement on climate change.”

Greenhouse Gases – Unilateral Action

Following the lack of progress on market based measures to curb ship-sourced CO2 emissions, US-based non-profit environmental law firm Earthjustice called on the US government to unilaterally strengthen regulations governing climate change pollution from ships.

Earthjustice attorney Sarah Burt said: “Global warming is a global problem, to which a global solution would be ideal. But the United States should not wait for strong mandatory requirements by the IMO when that body seems unable to act. Rather, we should push forward with domestic regulations that address a significant portion of the greenhouse gas emissions at issue. If the other nations object to the United States’ domestic action, we should challenge them to catch up to and surpass us in addressing this problem. Once they’ve done so, our regulations may no longer be necessary. But until then, domestic regulation is the best tool we’ve got.“

And finally...

US-based researchers say they have developed a method that uses aluminium and a liquid alloy to extract hydrogen from seawater to run marine engines. Purdue University professor of electrical and computer engineering Jerry Woodall says the technique had previously worked only for freshwater, but a new formulation also enables the method to generate hydrogen from seawater. Hydrogen generated by the technology could be fed directly to an internal combustion engine.

The new method makes it unnecessary to store or transport hydrogen – two major challenges in using hydrogen in ships and vehicles. Prof Woodall says: “We generate the hydrogen on demand, as you need it.”

The aluminium splits water by reacting with the oxygen atoms in water molecules, liberating hydrogen in the process. The waste product, aluminium hydroxide, can be recycled back to aluminium using existing commercial processes.