Leading the way; making a difference

INTERTANKO Council November 15, 2012

UPDATE ON GHG MARKET BASED

MEASURES

JOSEPH ANGELODEPUTY MANAGING DIRECTOR

Leading the way; making a difference

INTERTANKO Policy on MBMs (Nov 2011)

• MBM is not justified at this time

• If a MBM should be required, then this should: 1. be implemented through an international regime

2. be simple to enforce and to monitor 3. provide sufficient transparency to maintain the current level playing field 4. not result in a disproportionate financial or operational impact on the industry

• GHG Fund seems to be the simplest and most transparent from a shipowner point of view

• Not in favour of an emissions trading scheme

Leading the way; making a difference

MEPC 64 (October 2012)

• Further details submitted on MBM proposals

• However, all discussion on MBM proposals was deferred to MEPC 65 (May 2013)

• Three main focuses of MBM proposals

1. Emission Trading Schemes (ETS) 2. GHG Fund 3. Operational Efficiency

Leading the way; making a difference

With no discussion of MBMs at MEPC 64 and MEPC 65 scheduled for May 2013,

Timing provides INTERTANKO Council with perfect opportunity to review MBM policy and amend, as necessary, to prepare for/influence MEPC 65 discussions

Leading the way; making a difference

OPERATIONAL EFFICIENCY – Three phases

1. Data collection to determine the baseline

Fuel consumption Cargo mass Voyage info, i.e. distance, sea state, weather, etc.

2. Trial period to establish practical rating system

Establish and verify baseline Adjust baseline, as necessary

3. Required operational efficiency scheme

Mandate through amendments to MARPOL

Leading the way; making a difference

EUROPEAN COMMISSION APPROACH

1. Introduce new requirements to monitor shipping emissions next year as part of a wider bid to accelerate a global deal on maritime emissions reductions that will avoid costly and disruptive regional legislation.

2. Develop details of “monitoring, reporting and verification (MRV) system” early next year.

3. Finalize obligatory measuring, reporting and verifying of maritime CO2 emissions after 2013

NOTE 1: MRV system is essentially the same as Phase 1 and part of Phase 2 of Operational Efficiency

NOTE 2: EC Stakeholders meeting on December 5

Leading the way; making a difference

OPERATIONAL EFFICIENCY – PROS

• Correct data on ships’ fuel consumption versus the current assessments

• Focuses on actually reducing GHG emissions

• Play proactive role to positively influence regulators

• Influence the development of the methodology to assess efficiency of ships in operations to include the logistic chain

• Be part of the final decisions on (1) setting the level of required efficiency and (2) the type of measures to be applied, if any

Leading the way; making a difference

OPERATIONAL EFFICIENCY – CONS

• Details of the intent of regulator not entirely clear

• What if ship does not meet required operational efficiency scheme? (Flexibility measures)

• Ships in operations cannot be fairly measured against each other

• Most of the fuel consumption is the result of commercial

decisions in response to the market demand/supply for transportation and in many instances, the decision is taken by charterers

Leading the way; making a difference

EXCOM Recommendation

1. Request EXCOM, with assistance from ISTEC, to further investigate the details of Operational Efficiency/MRV with the objective of proactively influencing its suitable development

2. Agree that the Secretariat should participate in the EC Stakeholders meeting on December 5 and report the outcome to the EXCOM meeting in February 2013

3. Request the EXCOM to review the outcome of the EC stakeholders meeting, determine the appropriate course of action and report to the Council at its next meeting

Leading the way; making a difference

THANKYOU!!WWW.INTERTANKO.COM