Transcript Document 7510624

Anti-Trust/Competition Law
Compliance Statement
INTERTANKO’s policy is to be firmly committed to maintaining a fair and
competitive environment in the world tanker trade, and to adhering to all
applicable laws which regulate INTERTANKO’s and its members’ activities in
these markets. These laws include the anti-trust/competition laws which the
United States, the European Union and many nations of the world have
adopted to preserve the free enterprise system, promote competition and
protect the public from monopolistic and other restrictive trade practices.
INTERTANKO’s activities will be conducted in compliance with its Antitrust/Competition Law Guidelines.
GREENHOUSE GASES FOR SHIPS
UPDATE FROM IMO
INTERTANKO North American Panel
April 2010
IMO STATUS QUO
• MEPC 59 (July 2009) agreed on:
– Interim Guidelines on the method of
calculation of the EEDI for new ships
– Interim Guidelines on voluntary
verification of the EEDI
– Ship Energy Efficiency Managment
Plan (SEEMP)
– Guidelines for voluntary use of EEOI
– Time line for MBMs
IMO STATUS QUO
• MEPC 60 (March 2010) progress:
– Provisional draft for a mandatory
regulation on Design and Operational
measures (EEDI & SEEMP)
– Provisional agreement on the EEDI
verification scheme
– Intersessional meeting to progress on
the EEDI and SEEMP regulation
– Expert Group on MBM
ENERGY EFFICIENCY DESIGN INDEX
Attained EEDI 
ENVIRONMENTAL COST POWER x SFC

 ENERGY SAVINGS
BENEFIT FOR SOCIETY
Capacity x Vref
- Cost: Emission of CO2
- Benefit: Cargo capacity transported a certain distance
(Relates to a seagoing maximum condition)
- Mandates: New ships; Attained EEDI < Required EEDI
- Mandates: Required EEDI value to be reduced in time
(frequency and reduction rates to be considered)
- Application: Ships > 400 GT; ship type to be decided
- Possible exemptions: diesel-electric ships (new formula)
- Inaccuracies: RoRo; RoPax; short-sea; LNG; LPG
- Issues: Underpowered ships – safety limits
”Capping” of speed – safety margins
EEDI Required
Base Line
EEDI
Phase
1
Years
[2013-2017]
Reduction
[15%]
2
3
[2018-2022]
[2023-2027]
[25%]
[37%]
aa%
Phase 1
X yrs.
Phase 2
bb/%
Y yrs.
Phase 3
cc%
DWT
PREDICTIONS (?) FOR TANKERS
BASE LINE FOR TANKERS
INTERTANKO TEEMP
INTERTANKO’s Guide for a Tanker Efficiency and
Emission Management Plan
1.
2.
3.
4.
5.
6.
7.
Introduction
Establishing Company & Ship Management Plans
Voyage Optimisation Programme
Propulsion Resistance Management Programme
Machinery Optimisation Programme
Cargo Handling Optimisation
Energy Conservation Awareness Plan
OPERATIONAL MEASURES
• Monitoring Efficiency - Energy Efficiency
Operational Indicator (EEOI)
CO2 EMISSIONS
EEOI 
UNIT OF TRANSPORT WORK
– CO2 emitted measured from fuel consumption
– Transport work = cargo mass x distance (nm)
• EEOI Rolling Average – Proposed by
INTERTANKO & agreed by IMO
MARKET BASED MECHANISMS
• Commonalities of MBMs:
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–
–
–
apply to ships in service
demand targets
ships’ CO2 emissions will need to be measured
creating funds
• Suggestions classed in three main categories
– all ships pay (GHG FUND; ETS)
– all ships pay but some get rewards (Japan)
– some ships pay (US and WSC models)
• None has a control mechanism to measure the
environmental benefit for the funds used
PRINCIPLES FOR
INCENTIVES/PENALTIES
• GHG Fund
– all ships pay a levy
– contribution by fuel consumption (fixed price)
– efficient ships receive a reward (Leverage Incentive
System - Japan)
• ETS (Norway/Germany/France; UK)
– all ships buy allowances
– difference by number of allowances purchased
(market price)
• US & WSC MBMs
– no costs for ships complying with a required
efficiency standard . . . but
– US MBM - standards based on EEDI base line with a
projected increase of efficiency required
– WSC MBM – milder standard than EEDI base line
GHG COMPENSATION FUND
• Ships make a set contribution to the
Fund
• Collection by registered Bunker
Suppliers
• Bunker Delivery Note as evidence
• Mandatory registration of Bunker
Suppliers
• Revenues used for
- Mitigation, Adaptation and Technology Projects
- Non-vessel Specific R&D Projects
- Technological Cooperation within IMO
- Rewarding most efficient ships (Japanese alternative)
EMISSION TRADING SCHEME
• CAP on net CO2 emssions for shipping
• CAP to be agreed by UNFCCC or IMO with
periodical declining trajectory
• Carbon allowance = 1t equivalent CO2
emission
• Allowances (distributed) or sold = CAP
• End of each period – ship owners surrender
allowances to correspond to the actual fuel
consumption:
– emissions < CAP – rest allowances can be sold
– emissions > CAP – buy additional allowances
EMISSION TRADING SCHEME
• Monitoring – BDN & engine log
• Reports (external audited) submitted to a
registry
• GHG Certificate for ships in compliance
• Incentive/penalty - costs of allowances
• Allowances for ships may be linked to
other carbon markets
• Cross over to other carbon markets
avoids constraints in growth of shipping
USA’s MBM ALTERNATIVE
Efficiency Index Standard
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Ships to meet required Efficiency Index standard (EIR)
EIR uses the EEDI base line formula as a model
New Ship delivery: EIR = mandatory EEDI value
Existing ships: EIR = EEDI base line value for the ship
type & size
EIR value gradually and periodically lowered – same %
for all
In time EIR < EEDI for a ship compliant with new rules!
Ship compliance:
– attained Efficiency Index (EIA) or
– direct and continuous fuel consumption monitoring
EIA – calculated; sea test; or continuous monitoring
(EEOI type of calculation)
USA’s MBM ALTERNATIVE
Efficiency Index Standard
• IMO establish Efficiency Credit (EC) trading for ships
• Measuring compliance: EC = (EIR – EIA) x Activity
• Activity (over a compliance monitoring period):
– actual cargo tonne-miles;
– tonne-miles / DWT or
– tonne-mile default value for each type and size of ship
• EC > 0 – ship sells credits; EC < 0 – ship buys credits
• Periodicity: maximum of 5 years with possible earlier
updates in case ships adopt technologies
• ”Activity” aimed to include efficiency in operations:
– operational measures
– fleet optimisation
• No CAP in activities but . . ..
• Potentially all ships will end up buying credits
WORLD SHIPPING COUNCIL
VESSEL EFFICIENCY SYSTEM (VES)
• Combination of US MBM & GHG Fund
• Emission targets:
– EEDI value and its reduction - new buildings
– Less stringent base line and targeted reduction for
ships in operations
• Ships meeting the target = no additional
charges
• Less efficient ships = charges/tonne of fuel
consumed over the target
• IMO establish a Fund to collect charges
• Charges proportional to shipping contribution
to the total human-made CO2 emissions
MBMs - OBSERVATIONS
• GHG FUND
– regarded as taxation – politically difficult
– complexity of bunker purchasing
– bunker suppliers need to be part of it
• ETS
– will require a definition of a ”Cap”
– complex enforcement and monitoring
– predicted expensive adminsitration
– government participation and data exchange
– trading administration by each ship owner
MBMs - OBSERVATIONS
• Japanese Leverage Incentive Scheme
– difficult standardisation for measurables
– difficult monitoring of each ship in operation
– uncertainty of the refund scheme
• US MBM
– EEDI compliant ships have little improvement
potentials
– strict & complicated enforcement and monitoring
– strict improvement requirements – all ships buy
credits
– how many credits will IMO generate?
• WSC MBM
– only for non-EEDI compliant ships?
– need of more details for full assessment
Shipping’s
GREEN
Credentials
What is
in it for
me?
• This car, weighing one tonne, uses
1 litre of fuel to move 20 kms
• This oil tanker uses 1 litre of fuel to
move one tonne of cargo 2,500 kms
– more than twice as far as 20 years ago
SHIPPING SHOULD ONLY PAY AND SHOULD
ONLY BE RESPONSIBLE FOR OWN EMISSIONS
POLITICAL DILEMMAS
• Need to reconcile:
– UNFCCC principle of Common But
Differentiated Responsibility (CBDR)
– IMO principle of uniform global rules for
shipping
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Design & Operational measures only?
Market Based Mechanisms added?
Global or IMO controlled MBM?
New IMO Convention or amendments to
MARPOL Annex VI?
THANK YOU
For more information please visit
www.intertanko.com
[email protected]