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  • Writer's pictureMarc Allen

Emissions on the high seas

The international shipping industry is a major contributor to global greenhouse gas emissions. The International Maritime Organisation (IMO), in their Third GHG study from 2014, stated that international shipping contributed 2.2% of global emissions in 2012 - down from 2.8% in 2007. Total GHG emissions from international shipping were estimated to be 796 Mt of CO2-e in 2012. To put this in perspective, if the international shipping industry were a country, it's 2012 emissions would be the sixth in the world ranking of emissions.

Global emissions by country

To date, international shipping has not been actively present at international negotiations to reduce emissions and it is predicted that emissions from international shipping may increase by 50% to 250% by 2050. This is while other countries in the above graph are making commitments to reduce emissions over time. As a result, there are jurisdictions starting to act in support of reducing emissions in international shipping.

The EU is a first mover in this area. The EU has been pushing for strong global action on reducing emissions from the international shipping industry and have also committed 10 million Euros to fund a joint European Commission/IMO energy efficiency project where 5 regional "Maritime Technology Cooperation Centres". This four year project, which was agreed to in January 2016, aims to start these centres in Asia, Africa, the Caribbean, Latin America and the Pacific. In addition to this funding, the EU has developed a strategy for progressively introducing international shipping emissions into the EU's domestic emissions reduction policy. It will do this by:

  • Implementing Monitoring, Reporting and Verification (MRV) programs for large ships using EU ports

  • Setting GHG reduction targets for the maritime transport sector

  • Introduction of further measures such as market based mechanisms in the medium term future

The first step of this program is now underway. Shipping companies, or those doing the reporting on behalf of shipping companies, were to submit monitoring plans to an EU MRV shipping verifier by 31 August 2017. In the event that they call at an EU port for the first time after this deadline, they have two months to submit this plan. Data is collected on a per voyage basis, for all ships that call into an EU port, or one in Norway or Iceland, with gross tonnage in excess of 5,000 tonnes (cargo or passengers).

From 1 January 2018, ships above the reporting threshold must monitor their emissions, fuel consumption, distance travelled, time at sea and cargo for each journey to and from an EU port. These are then summarised and reported to the EU on an annual basis by 30 April (for the previous calendar year).

Given that there is significant maritime traffic between major SE Asian ports like Singapore and Shanghai and the EU, it is likely that a number of companies and vessels will be affected by these regulations. Robust emissions estimation and accounting processes will be required to ensure compliance. The timeline below shows some key dates:

Prior to external verification by an EU MRV shipping verifier, it is recommended that the reporting dataset is reviewed for accuracy and a basis of preparation document prepared - similar to any emissions reporting dataset. This preparation will greatly reduce the time and costs for the verification process.

On a global level, the IMO has been developing its GHG strategy with a view to long term reductions in GHG emissions from the sector. The topic of GHG management has been discussed often by the Marine Environment Protection Committee (MEPC). MEPC 70, held in October 2016, approved the roadmap for developing a comprehensive GHG strategy for the industry. This roadmap contains a three step approach to improving GHG emissions from ships. The first step is the collection and reporting of fuel consumption data as part of the mandatory fuel consumption data collection system - expected to be introduced from 1 January 2019. Step 2 of the approach is data analysis, which will information the basis of step 3 - policy decisions. At MEPC 70, the IMO also agreed to hold regular working group intersessional meetings to discuss ways to reduce GHG emissions from ships. This may include items such as improving the efficiency of engines and fuel switching to less polluting fuels. Ships often use heavy fuels and fuel oils so there is significant scope for improvement here.

MEPC 71 was recently concluded in July 2017. This session once again featured GHG management under the heading "reduction in GHG emissions from ships". The draft outline of the structure for the initial strategy was agreed to. The outline agreed to was:

  1. Preamble/introduction/context including emission scenarios

  2. Vision

  3. Levels of ambition - guiding principles

  4. List of candidate short, mid and long term further measures with possible timelines and their impacts on States

  5. Barriers and supportive measures; capacity building and technical cooperation; R&D

  6. Follow-up actions towards the development of the revised strategy

  7. Periodic review of the strategy

This is an issue worth monitoring as it develops as it is very likely that the shipping industry will have additional reporting requirements and potentially even requirements to reduce emissions in the future.

It is clear that the area of GHG emissions management in the international shipping industry is moving ahead - and accelerating. This has likely been precipitated by the introduction of regulations by the EU. It certainly makes sense that rules are harmonised at a global level rather than have one jurisdiction act alone. There will be regional effects felt in the SE Asian region. Some of the biggest container ports in the world are in this area. It would be prudent for shipping operators to monitor developments and start to prepare for additional reporting, and implementation of efficiency projects, sooner rather than later. Those directly impacted by the EU regulations should have completed monitoring plans already though there still may be time in the event that they have not been completed yet. Development of robust systems and processes for reporting of fuel consumption and emissions is essential to ensure GHG datasets are accurate and verifiable. The development of bases of preparation is also highly recommended as a way to reduce time and costs spent on verification and assurance.

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