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Gard News examines existing regulations and measures which seek to control the level of sulphur in fuels.

 

 

While there is an undeniable body of evidence to show the harmful effects of sulphur emission into the atmosphere, why is fuel containing sulphur still produced? In the case of shipping, fuel containing sulphur is still produced because vessels trade in and out of jurisdictions where there has been no clear demarcation of authority other than those traditionally envisaged by UNCLOS.1 This has led to some fuel producers and bunker suppliers selling heavy fuel oil (HFO) with higher than normal levels of impurities, (some of which remain from the manufacturing process) simply because they are too expensive to remove.

UNFCCC and Kyoto Protocol
Shipping and aviation are the only industry sectors that are not regulated by the United Nations Framework Convention on Climate Change 1997 (UNFCCC) or the Kyoto Protocol, an agreement linked to the UNFCCC, which set binding targets for reducing greenhouse gas emissions on those countries that have ratified the Protocol. There was an expectation that the Kyoto Protocol (or its successor) would be extended to the shipping industry at the UN Climate Change Conference in Copenhagen in December 2009, but the accord reached by the participants at that conference was silent on the reduction of emissions from international shipping.

In December 2011, UN climate change talks took place in Durban and concluded with an agreement known as the “Durban Platform for Enhanced Action”. In preparation for the Durban Conference, the International Chamber of Shipping (ICS) produced a briefing document, confirming the shipping industry’s commitment to cut shipping emissions by 20 per cent by 2020, with significant further reductions thereafter. The ICS called on the participants in the Durban Conference to give the IMO a clear mandate to deliver emissions reduction through market-based measures, for example a shipping industry environmental compensation fund, possibly linked to the Green Climate Fund. Notwithstanding the ICS’s request for global regulation of the shipping industry, the Durban Conference did not result in any proposals specifically addressing the shipping industry’s role in combating climate change.

The IMO initiatives
The IMO originally sought to reduce emissions by requiring ships operating in certain areas to use fuel with a lower sulphur content, as outlined below. More recently, the IMO has responded to the global focus on climate change and greenhouse gas emissions by developing specific technical and operational efficiency measures. In July 2011, the IMO’s Marine Environment Protection Committee (MEPC) also agreed a work plan guiding future discussions on market-based mechanisms. As previously recognised by the Kyoto Protocol, emissions from ships cannot be apportioned to any particular country or economy due to the inherently global and complex nature of the international shipping industry. The measures introduced by the IMO are, therefore, aimed at promoting equality for all ships, regardless of flag, in order to negate the effects and complications that regional climate change measures could have on shipping.

Sulphur emissions regulations
The IMO’s ship pollution regulations are contained in MARPOL 73/78. Since 2010, MARPOL  Annex VI has required ships operating in the Emission Control Areas (ECAs) to use fuels with one per cent sulphur content, with the limit dropping to 0.1 per cent or less from 2015. This is likely to have an impact directly on shipowners operating vessels within the Northern European ECA, by increasing the cost of fuel. In addition, there are concerns as to the availability of sufficient quantities of compliant fuel. As a result, lobbying by various interested parties continues in an attempt to postpone the date of introduction beyond 2015. In addition, the IMO has indicated that regions outside the ECAs will be subject to a decrease in sulphur content in fuel from 3.5 per cent to 0.5 per cent in 2020, unless a fuel availability study, due to be published in 2018, finds that there is too little low-sulphur fuel available for global shipping, in which case the IMO has said it will extend the date for compliance to 2024.

Technical efficiencies
The IMO’s Energy Efficiency Design Index (EEDI), which is mandatory for new ships, and Ship Energy Efficiency Management Plan (SEEMP), which is mandatory for all ships, will come into effect on 1st January 2013 and will apply to all ships of 400 GT and above. The former is intended to encourage shipbuilders to create more fuel-efficient vessels, while the latter sets a ship energy efficiency management plan akin to a safety management plan. China and Brazil were some of the states granted an exemption from compliance with these mandatory requirements until 2019. The ICS has nonetheless strongly urged all shipowners ordering new ships to only accept delivery of ships with an EEDI, irrespective of any temporary flag state waiver.

Market-based measures
The IMO has also been considering its position on market-based measures through an expert working group, which has been reporting back to the MEPC. Among the numerous proposals being considered by the working group are the following:

– A port state levy based on the amount of fuel consumed by the vessel on its voyage to the port in question;

– A global emissions trading scheme which would allocate emissions allowances and set an emissions cap;

– An international fund establishing a global reduction target for international shipping, to be set either by the UNFCCC or the IMO.

Slow steaming
A report by independent consultants into regulated slow steaming in maritime transport was launched at the MEPC’s latest meeting. This report suggests that regulated slow steaming can produce emission reductions that rival the other reduction options being considered. The report states that if global average maritime speeds were reduced by 10 per cent, carbon dioxide savings would rise to 19 per cent, even after the cost of building and operating new ships to make up for lost capacity was considered. It has further been reported in the shipping press that one of the world’s largest shipping operators has held extensive trials of slow steaming in this context. It remains to be seen, however, how many others will follow suit.

The EU position – Sulphur regulations
In 1999 EU legislation was extended to cover the reduction of sulphur emissions from certain liquid fuels used by seagoing ships through Council Directive 99/32/EU. In 2005 Directive 2005/33/EC, known as EU low-sulphur Directive, decreed a reduction of sulphur emissions to cover all liquid fuels derived from petroleum and required ships berthed or anchored in EU ports not to consume marine fuels with a sulphur content exceeding 0.1 per cent by mass. The Directive, which came into force on 1st January 2010, applies to all vessels, irrespective of flag, type, age or tonnage. However, the EU is considering an amendment to the low-sulphur Directive to align EU legislation with the MARPOL Annex VI standards. In addition, it has been reported that the European Commission will develop a “Sustainable Waterborne Transport Toolbox”, to help the industry comply with the sulphur standards while maintaining competitiveness.

The EU Commission has made it clear that the control of SOx emissions is a priority and that the preferred method of control in shipping is via a global strategy in which the Commission and EU member states attempt to use their influence to promote the adoption of cuts in emissions through the IMO and relevant international treaties. However, the EU has gone on to state that SOx emission reduction through MARPOL is just a starting point and it is determined to reduce such emission far beyond those levels adopted worldwide.

The US
Over the years Gard News has tracked the continually changing regulatory atmosphere of vessel air emissions in the United States. For more details readers are referred to the following Gard News articles:

– “Air pollution regulation in the US – SECAs, bad press and lawsuits” in Gard News issue No. 179

– “The new California Vessel Air Emission Regulations – Facing legal challenges” in Gard News issue No. 186

– ”Vessel emissions proposed legislation in the US Senate” in Gard News issue No. 187

– “Airing differences – Vessel air emissions in the US” in Gard News issue No. 188

– “California diesel engine regulations – An update” in Gard News issue No. 190

– “Update on California Air Emission Regulations” in Gard News issue No. 191

– “Is it still all up in the air? – New regulations for fuel and marine diesel air emissions in California – Timing and status” in Gard News issue No. 193

– “US Vessel General Permit – The case of the reluctant regulator” in Gard News issue No. 194

– “Every breath you take? – California’s legal and regulatory changes with regard to ship air emissions” in Gard News issue No. 195

– “US Vessel General Permit deadline reminder” in Gard News issue No. 195

– “Air emissions – California update” in Gard News issue No. 201

– “US law – CARB Regulations update” in Gard News issue No. 203

– “Thank you for not smoking – The US and Canada to watch ship air emissions more closely” in Gard News issue No. 204

– “US court holds smoke abatement laws inapplicable to ships” in Gard News issue No. 204

– “MARPOL – Enforcement of North American Emission Control Area means close scrutiny of documentary compliance” in Gard News issue No. 208.

Footnotes
1 The United Nations Convention on the Law of the Sea (UNCLOS) defines the rights and responsibilities of nations in their use of the world’s oceans, establishing guidelines for businesses, the environment, and the management of marine natural resources.

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