1. International Shipping and Climate Change Michael Sutton A/g Executive Director Infrastructure and Surface Transport Policy

2. Outline UNFCCC framework, role of ICAO and IMO Emissions from fuel used for international transport International shipping and reduction measures IMO work on GHG policy framework

3. International transport emissions Maritime Aviation 52.9% 42.5% Source: International Energy Agency

4. International process National targets under UNFCCC Address International bunkers through ICAO and IMO Post Kyoto congruent process towards end 2009 agreement CO 2 principal greenhouse gas in relation to transport

5. Estimates of global shipping emissions StudyFuel Consumption MMT CO 2 MMT IMO 2000138 (120-147)419.3 Endresen et. al. 2003158501.0 Corbett & Koehler 2003289912.0 Eyring et. al. 2005280812.63 IMO 2007 study - Informal Cross Government/Industry/scientific group of experts 3691120

6. Shipping sector World GDP grew by 4.0% while volume of world trade grew by 8.0% 60,000 ships in world trade as at January 2007 Estimated to grow by11% by 2020 Big ships to grow by around 60% over the period Estimated fuel consumption nearly 500 million tons in 2020, a one quarter increase in fuel consumption from 2007 figures.

7. Reduction measures Three broad categories –Technical: fuel efficiency measures or alternate fuel and energy source –Operational: ship/port operational changes for improved efficiency and fuel savings –Market based: economic instrument to encourage behavioural change

8. Technical measures Short term energy savings achievable through application of current technologies Potential of technical measures to reduce CO 2 emissions estimated as 5-30% in new ships and 4-20% in existing ships HFO quality poor and approaching acceptable critical specification both environmentally and for engine performance

9. Operational measures Potential of operational measures estimated as 1-40% Speed selection alone results in highest reduction of CO 2 25% reduction in turn around time reduces CO 2 by 1-4% Reduction in turn around time with speed selection can reduce CO 2 by 14-17%

10. Market based measures Can drive technical and operational changes Ship emissions outside national control Policy instrument needs to be comprehensive and global in scope

11. IMO 2009 GHG study Update to GHG 2000 study to inform IMO deliberations on a global agreement by end 2009 Phase I to inform on current inventories, future scenarios and climate impact from CO 2 emissions MEPC 58 in October to discuss Phase I of the report Phase 2 to fully inform on current inventories, future scenarios, climate impact and reduction potential

12. GHG: IMO fundamental principles Effective in contributing to reduction of total global GHG emissions Binding and equally applicable to all flag states Cost effective Able to limit or effectively minimise competitive distortion Should not penalise global trade and growth Goal based approach and not prescribe specific methods Support technical innovation and R&D in shipping Accommodate leading technologies in energy efficiency Practical, transparent, fraud free and easy to administer

13. IMO timeline Keep one step ahead of the UNFCCC process

14. Conclusion No easy answers Establish baseline, allocate emissions, design CO 2 ship index, develop technical and operational best practices and formulate market based policy instrument Global solution Simple, practical and effective Does not penalise global trade and growth in shipping industry