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Policy instruments for the abatement of
emissions from ships
European Maritime Day 2012
Per Kågeson
CO2-emissions from maritime transport
Administrative instruments
- Energy Efficiency Design Index (EEDI)
-Ship Energy Efficiency Management Plan (SEEMP)
Market-based measures
- Emissions trading (METS)
- Taxes/charges (possibly in combination with GHG Fund)
- Base-line and tradable credits (affecting specific emissions)
-
Need for more than one instrument?
• To cut maritime emissions substantially over the
next few decades policy instruments must affect:
- Specific emissions from new buildings
- Retrofitting of existing ships
- Operation of all ships (including slow-steaming)
• This is difficult to achieve by just one instrument
Conflicting principles
• The UNFCCC is based on the principle of
common but differentiated responsibility
• An important principle of the UN Convention on
the Law of the Sea (UNCLOS) is no more
favourable treatment of ships.
• The IMO has not been able to agree on this matter
All countries must contribute
• Common but differentiated responsibility means
industrialized nations are expected to do more than
could expected from developing countries
• But it does not mean developing countries should
not contribute
• As countries develop they need to do more
Temporary relief or compensation
• LDCs may be exempt
• Other developing countries may be temporarily exempt
• Certain goods may be exempt (e.g. grain)
• Funds created can be used for compensation
• Any decision on a MBM must be long-term
GDP per capita at PPP
.
Country 1997 2009 2015 (forecast)
China 1,847 6,778 12,449
Brazil 6,846 10,499 14,429
Saudi Arabia 16,535 23,271 28,721
Ukraine 2,982 6,330 9,149
Poland 8,548 18,050 24,811
Rumania 5,923 11,183 15,396
Portugal 15,574 22,670 25,759
EU Commission to assess 4 options
• Emissions Trading
• Tax on Emissions •
• Compensation funds
- Mandatory Compensation Fund (Levy & Fund)
- Industry-managed Compensation Fund
• Mandatory emissions reductions (baseline)
NOx-emissions from maritime transport
Globally ca 25 Mt in 2007 = 30% of total NOx
European waters (2000) 3.7 Mt
Tier II and Tier III (NECA) will cut emissions compared
to BAU but reduce them below current levels only by
2030
Provide incentive to pre-existing ships
Tier III (NECA) will come into force in 2016 and
applies only to new builds – full fleet compliance
around 2045
Risk that the incremental cost of compliance will
slow down renewal of the pre-existing fleet
Risk that some companies will order new ships to be
delivered just prior to 2016 in order to avoid Tier III
NOx abatement technologies
Technology Reduction efficiency %
Basic IEM 20
Advanced IEM 30
Direct Water Injection (DWI) 50
Humid Air Motor (HAM) 70
Selective Catalytic Reduction (SCR) >90
Miller cycling 50
Exhaust Gas Recirculation (EGR) 40-50
Liquefied Natural Gas (LNG) 95
Technologies that can meet Tier III
SCR (use of urea increases the variable cost)
Combination of EGR and DWI (raises fuel
consumption)
LNG
New concepts such as CSNOx?
Flexibility and equal treatment
Pre-existing ships vary with regard to:
- conditions onboard
- remaining life
- share of journeys within NECAs
Technologies that do not fully meet Tier III can
also contribute towards lower emissions
Economic instruments for flexibility
Differentiated fairway and port dues
NOx emissions trading
Base-line and tradable credits
Charge or tax on specific NOx emissions
Distance related NOx charge
Tax or charge the preferred option
Could be applied to level of specific emissions or
to real emissions taking distance into account
Revenues may be recycled to the industry
Norway has created a NOx Fund that helps
financing NOx reducing measures
A NOx charge that takes distance into account
Based on real emissions as measured
or on fuel consumption multiplied with specific
emission per ton
or on a default value at based on distance and the
assumption that a certain percentage of engine
capacity is used during the voyage
Participation and administration
A common registry based on IMO numbers
A common administration
AIS may be used for monitoring ship movements
Random Port State control
Finding the right level of the charge
The current differentiation of Swedish port and
fairway dues correspond to less than €100/ton NOx
The Norwegian charge is equivalent to
approximately €500 per ton
€500 per ton may be the right level for a Baltic Sea
and/or North Sea charge
Sulphur emissions from maritime transport
• IMO´s SECA decision for 2015 is being challenged
• Scrubbers, LNG and MGO are potential solutions
• By dragging feet shipping companies may be able to
delay implementation – they should not be allowed to
benefit from becoming free riders
• A gradual introduction by means of a market-based
measure would have been more flexible
