IMO energy efficiency project - 

EC funding provides a booster

In an earlier blog, dated 8th Jan, 2016 on, “Climate change and global warming – reductions in CO2 emissions by shipping industry”, the steps taken by the international shipping industry was highlighted. As this blog is a sequel, some of the salient points from the earlier blog are repeated for continuity.

 In December 2015, the Paris Climate Change Agreement (COP 21) had been adopted. It clearly identified a goal of “holding the increase in the global average temperature to well below 2Deg C above pre-industrial levels and to pursue efforts to limit the temperature increase to 1.5Deg C above pre-industrial levels”.

 IMO has contributed, and said it will continue to contribute, to global GHG reduction goals. IMO and its Member states recognize the important need for international shipping, which accounts for 2.2% of CO2 anthropogenic emissions, to support global efforts to mitigate the impact of climate change.

 Following the outcome of Kyoto Protocol (1997), IMO has worked on mandatory energy efficiency standards for new ships, and mandatory operational measures to reduce emissions from existing ships. These requirements have entered into force under an existing international convention (MARPOL Annex VI) in January 2013. By 2025, all new ships will be 30% more energy efficient than those built last year (2014).

 The Shipping industry has already taken steps to reduce CO2 emissions through energy efficiency on ships. Following the Paris agreement (COP21), the shipping industry would need to strive even harder to further reduce greenhouse gas emissions and thereby contribute in its effort /share to further reduce global warming and climate change.

 Recently, European commission (EC) has committed to provide a funding contribution of Euro 10million to IMO for its energy efficiency project.

 The funds mobilized by the EC illustrate the EU's commitment to support the concrete implementation of a range of measures aimed at addressing energy efficiency and shipping emissions and, through this, contributing to the fight against climate change. This IMO energy-efficiency project is part of the Commission's broader climate financing portfolio aimed at helping less developed countries take climate actions in specific fields or sectors such as the shipping sector.

 The aim of the project will be to help beneficiary countries limit and reduce greenhouse gas (GHG) emissions from their shipping sectors through technical assistance and capacity building. It will encourage the uptake of innovative energy-efficiency technologies among a large number of users through the widespread dissemination of technical information and know-how. This will heighten the impact of technology transfer.

 The four-year project will target five regions - Africa, Asia, the Caribbean, Latin America and the Pacific. These have been targeted for their significant number of Least Developed Countries (LDCs) and Small Island Developing States (SIDSs).

 The heart of the project will be the establishment of five MTCCs, one in each target region, with seed-funding support from the project. These will have a strong regional dimension, becoming centers of excellence for promoting the uptake of low-carbon technologies and operations in maritime transport. Each MTCC is expected to be hosted by an existing institution with a credible standing in the region. These host institutions will be selected through an open process of competitive bidding against a set of criteria and project deliverables. The project will be coordinated by IMO’s Marine Environment Division through a dedicated unit at IMO headquarters. IMO welcomes the EC contribution to this project which will form a cornerstone of continuing efforts by the Organization to ensure effective implementation and enforcement of the energy-efficiency regulations worldwide, and the activities undertaken by the MTCCs should provide an important focus for the promotion of technical co-operation, capacity building and technology transfer relating to the improvement of ships’ energy efficiency.

 The Shipping industry is grateful to EC and IMO for the above noble development, and would be happy to receive technology transfer, further improve ship’s energy efficiency and contribute further towards reduction in global warming.

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LNG as Ship Fuel- to reduce emissions!

Stringent environmental regulations, United Nations Framework Convention on Climate Change (UNFCCC), the need to reduce greenhouse gas emissions to reduce global warming, IMO’s MARPOL Annex VI for reduction in emissions of nitrous oxides (NOx), sulphur oxides (Sox), particulate matter (PM) and carbon dioxide (CO2), are all posing a challenge to the shipping industry to comply and improve.

Presently, the majority of the world fleet is using conventional oil-based fuels. With stricter environmental considerations, non-polluting renewable sources of energy not yet fully developed for ships, Liquefied Natural Gas (LNG) as a ship fuel, being less polluting than oil, seems to be a viable alternative in the medium term.

LNG will provide good environmental performance compared to conventional oil-based ship fuels. It emits; negligible sulphur oxides (SOx), negligible particulate matter (PM), 85% less nitrogen oxides (NOx), and at least 20% less carbon dioxide (CO2).

LNG carriers have been using cargo boil-off gas as fuel for over 50 years and their safety record has been good. Thus, we already have good experience of using LNG as fuel, although mainly on LNG carriers.

The number of ships using LNG as fuel is increasing (other than LNG ships) and more and more infrastructure projects (LNG bunkering ports) are coming up along the main shipping routes. About 100 LNG fuelled ships are in operation worldwide (other than LNG ships) and about 100 new building ships would be constructed in the near future.

Recently (October 2015) the world’s first container ships, 3100teu, LNG fuelled, were delivered in U.S. This ship is on Jones Act service linking the US mainland with Puerto Rico. A sister vessel will follow soon. These ships when running in gas mode will reduce SOx emissions by 97%, NOx by 98%, CO2 by 72% and PM by 60%, when compared with existing older ships on the same trade.

IMO’s MARPOL Annex VI Emission Control Area (ECA) regulation, which has come into force from 1st Jan, 2015, requires that sulphur content of fuel should not exceed 0.1% when operating in such areas. With oil fuel it is difficult to meet this requirement, but with LNG as fuel, this requirement does not pose a problem.

The decision to invest in LNG as a ship fuel is not an easy one. There can be substantial premiums to be paid; up to 30 per cent for certain ship types in the most expensive cases. This high cost, combined with the lack of confirmed LNG availability for bunkering, in particular for segments dominated by the tramp trade, goes a long way to explaining the hesitation of many ship owners and charterers to move toward LNG-fuelled propulsion for new builds.

A ship owner has two options when considering the use of LNG as fuel in a new building phase: -

1. Building a LNG Ready ship - a ship ready for future retrofit, and
2. Building a LNG-fuelled ship - a ship ready for LNG operations.

IMO’s MARPOL Annex VI regulation will require by 2020 to 2025(exact date will be known by 2018) reductions in sulphur content in ship’s fuel to 0.5% for worldwide operations. Thus, it would then become 0.5% for operating ships outside ECAs, and 0.1% within ECAs which is already in force.

Government initiatives and financial support has initiated the growing development of LNG fuelled ships in the Baltic Sea, North Sea, English Channel and the coasts of Canada and US (ECAs). Other areas including Asia are likely to follow soon.

Taking into account the foregoing, environmental and regulatory considerations, it seems that for new build ships that would operate in areas where LNG fuel is available or would be available, a LNG fuelled ships is a good option. For operating in other areas including worldwide, a dual fuel ship would be a good option. Even though the construction cost of such ships would be higher, this will be more than compensate by the benefits that would accrue in flexibility, ease of operations and compliance with strict emission criteria.

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Climate Change and Global Warming –

Reductions in CO2 emissions by shipping industry.

The United Nations Framework Convention on Climate Change (UNFCC) is an environmental treaty negotiated at the Earth Summit in Rio de Janeiro in June 1992, then entered into force in March 1994. Its objective is to stabilize greenhouse gas concentrations in the atmosphere at a level that would prevent dangerous anthropogenic interference with the climate system.

The parties to the convention have been meeting annually from 1995 in Conference of the Parties (COP) to assess progress in dealing with climate change. In 1997, the Kyoto Protocol was concluded and established legally binding obligations for developed countries to reduce their greenhouse gas emissions in the period 2008- 2012.

The 2010 Cancun agreement set the limit for future global warming to below 2Deg C relative to the pre-industrial level.

In December 2015, the Paris Climate Change Agreement (COP 21) had been adopted. It clearly identifies a goal of “holding the increase in the global average temperature to well below 2Deg C above pre-industrial levels and to pursue efforts to limit the temperature increase to 1.5Deg C above pre-industrial levels”.

IMO has contributed, and said it will continue to contribute, to global GHG reduction goals. IMO and its Member states recognize the important need for international shipping, which accounts for 2.2% of CO2 anthropogenic emissions, to support global efforts to mitigate the impact of climate change.

IMO secretary general, said, “The Paris Agreement represents remarkable progress and builds on the 1992 Rio Earth Summit, which itself was a significant step forward. The absence of any specific mention of shipping in the final text will in no way diminish the strong commitment of IMO as the regulator of the shipping industry to continue work to address GHG emissions from ships engaged in international trade.”

Thus far, IMO is the only organization to have adopted energy-efficiency measures that are legally binding across an entire global industry and apply to all countries.

Following the outcome of Kyoto Protocol (1997), IMO has worked on mandatory energy efficiency standards for new ships, and mandatory operational measures to reduce emissions from existing ships. These requirements have entered into force under an existing international convention (MARPOL Annex VI) in January 2013. By 2025, all new ships will be 30% more energy efficient than those built last year (2014).

This is more than a target, it is a legal requirement, and demonstrates that IMO is the correct and only forum to identify solutions and an appropriate pathway for international shipping to de-carbonize with the rest of the globe.

IMO’s third study on greenhouse gas emissions from ships (2014) estimates that international shipping emitted 796 million tonnes of carbon dioxide in 2012, down from 885 million tonnes in 2007. This represented 2.2% of the globe emissions of CO2 in 2012, down from 2.8% in 2007.

Continuing efforts will include development of a global data collection system for ship’s fuel consumption to be discussed in detail at the next meeting of IMO’s MEPC in 2016, further consideration of a total-sector reduction target for GHG emissions from international shipping, as proposed by the Marshall Islands this year and continued investigation of additional mechanisms for ships to support the implementation of the Paris Agreement.

During COP21, IMO provided an update of its work to address GHG emissions from bunker fuels. Specifically, IMO reported on its work on further developing guidelines to support the uniform implementation of the regulations on energy-efficiency for ships; and on its efforts with regard to technical co-operation and capacity building to ensure effective implementation and enforcement of the new regulations worldwide and, importantly, activities to support promotion of technical co-operation and transfer of technology relating to the improvement of energy efficiency of ships.

IMO SG has encouraged Governments to bring the spirit of the Paris Agreement to IMO and come forward with new, creative proposals and to approach them in a constructive and co-operative manner.

The shipping industry, which was represented by the International Chamber of Shipping (ICS) throughout the conference, also welcomed the agreement.

The shipping industry remains committed to ambitious CO2 emission reduction across the entire world merchant fleet, reducing CO2 emissions per ton/km by at least 50% before 2050, compared to 2007, the ICS said.

Despite the absence of an explicit reference to shipping, ICS said that the message from the world’s governments is clear. “I am sure IMO member states will now proceed with new momentum to help the industry deliver ever greater CO2 reductions, as the world moves towards total de-carbonization by the end of the century,” said ICS secretary general.

The Shipping industry has already taken steps to reduce CO2 emissions through energy efficiency on ships. Following the Paris agreement (COP21), the shipping industry would need to strive even harder to further reduce greenhouse gas emissions and thereby contribute in its effort /share to further reduce global warming and climate change.

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