1. NORTH AMERICAN PANEL OCTOBER 14, 2008
REDUCING GREENHOUSE GAS EMISSIONS FROM SHIPS
JOSEPH ANGELO
DEPUTY MANAGING DIRECTOR

2. BACKGROUND Kyoto Protocol adopted 1997 IMO works on GHG since 1998
Modest results after 10 years
UNFCCC meeting in Copenhagen to renew Kyoto Protocol December 2009
IMO needs a set of rules before Copenhagen or UNFCC will act

3. BACKGROUND CO2 emissions from all shipping is 3.3% of the total*
CO2 emissions from international shipping is 2.7% of the total*
But, GHG emissions from shipping estimated to doubled as from 1990*
Shipping (and aviation) under pressures to be included into Kyoto Protocol renewal
* (According to update IMO Study on GHG emissions (MEPC 58/INF.6))

4. IMO ACTION
December 2003 – IMO Assembly adopts Resolution A.963(23), IMO Policies and Practices Related to the Reduction of GHG from Ships. Tasks MEPC to develop mechanisms to reduce GHG from shipping
MEPC attempts to make progress, but is hampered by developing countries insistence that Article 2.2 Kyoto Protocol applies, ie. only Annex 1 countries are required to reduce GHG from shipping - “common but differentiated responsibilities”

5. IMO ACTION
July 2005 – MEPC adopts MEPC/Circ.471, Interim Guidelines for Voluntary Ship CO2 Emission Indexing for Use in Trials
NOV 2007 – IMO Secretary General informs Assembly of his intentions to recommend to MEPC a way forward to expedite IMO work on GHG emissions from ships
APRIL 2008 – SG presents expedited work plan which proposes completion of tasks by July 2009
OCTOBER 2008 – MEPC 58 considers issues

6. IMO ACTION Issues considered: Mandatory design index for new ships
Ship Energy Efficiency Management Plan – for existing ships including:
- Best practices to save energy used by the ship
- Operational Index (for each voyage & over a period of time/voyages)
- Other voluntary operational measures
- Energy inventory
Market based incentives, such as:
- Global fuel levy or hybrid mechanism
- Emissions trading schemes (ETS) and/or clean development mechanism (CDM)

7. NEW SHIP INDEX Mandatory index for new ships
Interim formulae agreed (in a simple form)
Definitions of terms used, almost completed
Power for diesel-electric propulsion systems not finalised
Corrections factors for ice-class & weather conditions still to b developed
Verification in two steps:
Plan approval (model testing)
Sea trials (final check)
Interim formulae on trials and be re-assessed by the intersessional meeting, March 2009

8. NEW SHIP INDEX
Pme - Power of the Main Engine(s) – 75% of the MCR for each ME.
SFCme - Specific Fuel Consumption of the Main Engines (at 75% MCR).
Cme/ae - Carbon to CO2 correction factor (i.e. how many tons of CO2 would be emitted by burning one ton of carbon; “rule of thumb” 3.1 tons of CO2 for 1 ton of carbon but it varies with the type of fuel, HFO, LSFO or MDO/MGO)
Pae - Required Auxiliary Engine power to supply normal maximum sea load when the ship is sailing at the voyage speed .
SFCae - Specific Fuel Consumption of the Auxiliary Engines (at 50% of MCR or torque).
Peff - Main engine power reduction due to innovative energy efficient system.
Capacity - DWT at the deepest operational draught of the ship
Vref - Speed to be obtained. P and Capacity should be consistent with each other.
Fw - “weather correction factor” – aimed to disclosed if ships meeting the required Design

9. NEW SHIP INDEX All suggestions by INTERTANKO were agreed at MEPC 58:
Use value of main engine power at 75% MCR
Use auxiliary enginer power at 50% MCR
Specific fuel consumption at these values are given by the engine’s EIAPP Certificates
Sea trails to be part of the verification
Verification process:
Vref. to be deducted from model testing at ship’s maximum draught and at 75% MCR
Vref. to be obtained at the sea trials
Should the owner/designer need a higher Vref. , then this should be established at design approval stage and more power be designed in

10. SHIP EFFICIENCY MGT PLAN
For each ship in operation
SEMP to contain:
Best practices to save energy used by the ship
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 guidelines for IMO
Best Practices – INTERTANKO works on a model to be approved by the Council (November 2008)
OCIMF “Energy Efficiency and Fuel Management” – an appendix to TMSA 2
OCIMF opens for consideration of c/p clauses to optimise the voyage and other operations to save energy during transportation

11. GREENHOUSE GASES OCIMF Best Practice Guide
“The Company is able to demonstrate that it is actively liaising with Charterers to optimise vessel speed and voyage schedules.”
INTERTANKO Policy???
“INTERTANKO MEMBERS, as part of their commitment to reduce Greenhouse Gas emissions, inter alia, commit to actively liaise with Charterers to optimise vessel speed and voyage schedules and call upon ALL charterers to equally commit to this liaison and on OCIMF to help facilitate the adoption of optimal vessel speeds and voyage schedules.”

12. OPERATIONAL INDEX
MEPC 58 agreed Operational Index is a voluntary tool to monitor each ship’s fuel consumption
Each voyage index calculate per MEPC/Circ. 471
Monitoring is by a Rolling Average Index over a period of time or a number of voyages
For tankers, MEPC 58 agreed to the Rolling Index Average suggested by INTERTANKO, OCIMF and BIMCO
Rolling Index Average for tankers calculates the fuel consumption per tone-miles for last 10 voyages
Indication of the ship performance but still to be agreed upon

13. MARKET BASED INCENTIVES
Global fuel levy – Danish proposal
Apply to all ships in international trade
Revenue collected nationally and channeled to independent international GHG fund
Revenue generated applied to:
1. acquisition of emission quotas/credits generated in other industrial sectors
2. funding projects in developing nations
3. funding IMO Technical Cooperation program
Emission Trading ??

14. NEXT STEPS Correspondence Group on the Operational Index and SEMP
Intersessional Meeting (9 to 13 March 2009) to finalize the Design Index, SEMP and Operational Index
MEPC 59 (July 2009) which may:
Approve regulations on the Design Index
Conclude or approve SEMP and Operational Index
Decide on how to tackle MBI (to keep and develop or to drop them)

15. GREENHOUSE GASES Outstanding questions
Will maritime transportation be included in a future global framework under the UNFCCC/Kyoto Protocol OR will IMO be allowed to address GHG from ships?
Will it apply to all ships OR will a “common but differentiated responsibilities” prevail?
If through IMO, will it be a revision of Annex VI of MARPOL or a new IMO treaty?

16. THANK
YOU!!