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TECHNOLOGY - EMISSIONS Cap & Trade or a Bunker Levy? In advance of UFCCC’s COP 15 meeting in Copenhagen this month, earlier this year the Danish shipping industry came up with a plan for an International Fund for Greenhouse Gas Emissions from Ships*. The IMO has already agreed on nine fundamental principles involving technical and operational instruments, plus market based instruments. However, the rationale behind the Danish proposal was the relatively long life of a ship; the expected growth in international shipping, despite today’s downturn; contributions from all sectors and offsetting the GHG emissions. The key elements to the plan are roughly split between GHG contributions and revenues. As for the contributions, these would take the form of a collection from each tonne of bunkers delivered. These would include all ships in international trades and include all marine fuels. Bunker suppliers would have to be registered and the collection of fees would be based on the Bunker Delivery Note as evidence of the amount of fuel delivered. This would be policed by Port State Control. The fee collection would be undertaken by registered bunker suppliers and the sums would be directly transferred to the International GHG Fund. What would the revenues be used for? According to the Danish Maritime Authority (DMA), they would be used for mitigation and adaptation activities, R&D projects for the benefit of mankind, technical co-operation within the IMO and administration expenses needed to operate the fund. To put this in place, a global, binding, separate legal entity in the form of a new convention would have to agreed. Speaking in Copenhagen recently, Gitte Mondrup, special adviser to the DMA, claimed that the virtues of the scheme include the meeting of all the nine fundamental IMO principles. She claimed that this plan would contribute to the reduction of global GHG emissions and would apply to all vessels regardless of flag, while still allowing the industry to grow. Technical innovation and R&D could be supported from the fund, which would be easy to administer. Revenues could also be used to help developing countries. Mondrup said that the fund would embrace common but differentiated responsibilities within the flag states and respect the stance of no more favourable treatment for the shipping industry. It would rely on well-established conceptual approaches within the IMO and she also claimed that it could be developed quickly and efficiently. The plan was submitted to the IMO MEPC meeting held last July and will be discussed at the March 2010 MEPC meeting, Bondrup said. The Danish Shipowners’ Association is actively encouraging its members to reduce emissions by 20% by 2020. A special partnership has been put together with the Danish Environment Department. Most Danish owners spoken with by TAKEROperator recently are supportive of this scheme. Most, if not all, are embarking on their own environmental schemes, as well as embracing industry schemes, such as the ‘Virtual Arrival’ initiative (see page 32). Cap & Trade system On 23rd September, the shipping associations of Australia, Belgium, Norway, Sweden and the UK published a discussion paper in which they opted for emissions trading when dealing with CO2. Entitled ‘A global cap-and-trade system to reduce carbon emissions from international shipping’, the authors claimed that the paper demonstrates how a global and open emissions trading scheme could work in practice. Katharine Palmer, BP Shipping’s environmental manager and chair of the executive committee at Shipping Emissions Abatement and Trading (SEAat), led the UK’s Chamber of Shipping working group on the development of this paper. “It is important that legislators and “ “Shipping is, by a considerable margin, the most efficient way to transport goods, but it still produces about 3% of the CO2 emitted as a result of human activity. Clearly such a major industry, transporting over 80% of world trade, has a responsibility to reduce carbon outputs. We believe some form of emissions trading system is the way to do it.” - Jesper Kjaedegaard, president, UK Chamber of Shipping ” 32 TANKEROperator November/December 2009
TECHNOLOGY - EMISSIONS regulators find a practical way of including shipping in the international work to reduce global warming,” said UK Chamber of Shipping president Jesper Kjaedegaard at its launch last September. “Shipping is, by a considerable margin, the most efficient way to transport goods, but it still produces about 3% of the CO2 emitted as a result of human activity. Clearly such a major industry, transporting over 80% of world trade, has a responsibility to reduce carbon outputs. We believe some form of emissions trading system is the way to do it.” “It is important,” Kjaedegaard continued, “that any solution is global and developed through the IMO. It is also vital that any emissions trading regime is implemented without driving goods to other modes of transport, which would increase overall emissions and damage commercial shipping.” Although improvements will continue to be gained through ship design and operational efficiency – and any new system must take account of these – ‘cap-and-trade’ is the only way to guarantee overall CO2 emissions reduction, the UK CoS said. Using the power of market forces, such a system would put the incentives in the right place to drive standards and behaviours. For example, it would force operators to pay more attention to efficient voyage-planning and management of their fleets, and investment in modern tonnage, as lower emissions would be financially rewarded. It would also promote change by supporting innovation and technological development. Meanwhile, in late October, the EU Environment Committee said it considered that global reduction GHG emissions from shipping should be agreed at 20% below the 2005 levels by 2020 and be implemented globally in a manor that ensures a level playing field. The EU also said that it supports the use of market-based instruments to reduce emissions and that such instruments should be developed by the IMO in the case of shipping. Twelve month’s grace A couple of months ago, Brussels gave the IMO a year to draft a measure to cut carbon emissions. Barbara Helfferich, EU environment spokeswoman reportedly said recently: “The EU wants to make maritime reduction part of December’s Copenhagen Agreement on the environment. So far, there has been no commitment by the sector to climate change, and it has done nothing about fighting it.” Greece, Cyprus and Malta persuaded the 27-member bloc at the recent EU Council of Environment ministers meeting to channel all work on emissions through the IMO. Carbon emission reduction should be “implemented globally” to ensure a “global playing field”, they said. As mentioned, the EU council's final accord said ships must cut carbon emissions by at least 20% by 2020. The agreement, which also covers aviation, said the EU supported the use of “global market-based instruments to reduce emissions from these sectors”. The IMO aims to draft an accord at December’s meeting in Copenhagen to succeed the Kyoto Protocol, which expires in 2012. TO *This article was written before the results of the COP 15 meeting were known. A successful story... Thruster Systems from BRUNVOLL Brunvoll’s operation is dedicated to thrusters, and we supply and service complete thruster packages BRUNVOLL – the single source supplier of thruster systems Refined and proven concepts teamed up with supreme technical solutions ensures low life cycle costs BRUNVOLL – manufacturer of • Tunnel Thrusters • Azimuth Thrusters • Low-Noise Thrusters • Thruster Control Systems We take full responsibility for your thruster needs, including drive system packages For more information, www.brunvoll.no BRUNVOLL Strandgata 4-6, N-6415 Molde Tlf. +47 71219600 e-mail: office@brunvoll.no November/December 2009 TANKEROperator 33
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