International Association of Independent Tanker Owners

1. IMO requirements to reduce emission to air from shipsbyErik.Ranheim@INTERTANKO.comManager Research and ProjectsGdansk April 2008‘

2. INTERTANKO International Association of Independent Tanker Owners A non-governmental organization established in Oslo in 1970 to speak authoritatively and proactively on behalf of tanker operators at international, regional, national and local level Membership 260 Members in 40 countries + 2,900 tankers 236 million dwt 75% of independent tanker fleet 300 Associate Members

3. MISSION Provide leadership to the Tanker Industry in serving the world with safe, environmentally sound and efficient seaborne transportation of oil, gas and chemical products. VISION for the TANKER INDUSTRY A responsible, sustainable and respected Tanker Industry, committed to continuous improvement and constructively influencing its future. INTERTANKO

4. Emission from shipping Shipping needs - INTERTANKO seeks • Positive reduction of harmful emission • A feasible, realistic and sustainable solution • Long-term, predictable and solid IMO standards • No unilateral nor regional regulations • Emission Annex VI, SOx, NOx, PM.. • Green House Gas Emission

5. Reducing harmful emissions from ships • Onboard abatement technology • Scrubbers, filters, separators, catalysts • ECAs • Emission Control Areas • Type and quality of fuel • Heavy fuel oil = a blending of refinery residues and distillate (up to 30% dist.) • Distillates = gasoil and diesel • Improved efficiency and lgistics

6. Energy use, population, CO2 emissionSeaborne trade Index Source: Fearnleys/INTERTANKO

7. World CO2 emission 2000 Source; World Resource Institute

8. Shipping and the environment • ~60,000 ships (above 400 GT) • 7,507,000,000 ts goods / year • average distance 4,400 miles • >90% of total world trade • Consumes 9% of world oil • CO2 emission share < 1/2 oil consumption shareSimple infrastructure • Economics of scale: One VLCC = 8,000 tank trucks • 1 ltr of fuel on a modern Very Large Crude Carrier moves 1 tonne of cargo > 2,800 km but

9. Shipping and the environment • Shipping is fuelled by the dirties part of the barrel • Burning the heavy fuel oil used by shipping cause emission with: • SO2 • NOx • Heavy metals • Soot

10. The world is moving away from HFOOil consumption by product - % share m ts % share Source: BP Review

11. Bunker price development 2000 - 2008USD/tonne, HFO 380 cst, Fujairah $ per tonne Source: Bunkerworld

12. Bunker price development 2000 - 2008 $ per tonne Source: Bunkerworld

13. The IMO emission package • New regulation on SOx and PM • Compliance through fuel only • Equivalent measures accepted • Marine fuel oil quality to be improved • No measures on ships that do not receive adequate bunker supply • Guidelines to asses compliance if BDN data is challenged by PSC or lab test results • NOx Tier I on large 1990s built engines • NOx Tier II and Tier III on new engines

14. Regulation 14 - Sulphur cap ECA*- Emission Control Area 2018 IMO considering 0.5%SOx fuel availability

15. Regulation 4 – Equivalent measures • An Administration may allow any fitting, material, appliance or apparatus to be fitted in a ship or other procedures, alternative fuel oils, or compliance methods used as an alternative to that required by this Annex if such methods are at least as effective in terms of emissions reductions as that required by this Annex • This means the Administration (and not the ship) have to acknowledge that: • They have equivalent efficiency in terms of SOx, PM and NOx. • That they do not harm the environment • As they operate within the requirements of the IMO guidelines

16. Why not scrubbers? • Still under testing (2 ship limited scale) • Large • Expensive • Difficult (impossible?) to install • CO2 emission (buffering effect) • leaves hazardous waste • waste disposal – no-one wants it • Tonnes of seawater need to be processed/added We are involved in transportation – not waste treatment

17. Revised Regulation 18 • If a ship is not compliant it should present evidence/record it attempted to buy the compliant fuel in accordance with the voyage plan • The ship not required to deviate from the voyage and should not be delayed • If evidence is provided, there should be no measures against the ship

18. Fuel oil quality • IMO Secretariat to request the ISO to consider a revision of a marine fuel oil specification (ISO 8217) addressing : -air quality, -ship safety, -engine performance, -crew health with recommendations for future consideration by the IMO, and if feasible, report back to MEPS 58

19. NOx emissions – Pre-2000 enginesUpgrade Methodology • Measures on engines: • installed onboard ships constructed between 1 Jan 1990 and 31 Dec 1999 • power output > 5,000 kW; and • per cylinder displacement at or > 90 litres • The NOx emissions at Tier I level • If the engine already meets Tier I NOx emission limits, simple certification is sufficient

20. NOx emissions – pre-2000 engines Part of the certification, • Parties should check that the upgrading: • does not reduce the engine rating by more than 1% • does not increase the fuel consumption by more than 2%, and • it has no other adverse effect on the durability or reliability of the engine • Upgrading to an acceptable cost/benefit level calculated according to a cost efficiency formula

21. Pre-2000 engines NOT-complying with Tier I NOx emission limitations: • measures against ship ONLY if there is a certified, efficient system commercially available • upgrade at the ship’s first renewal survey after a upgrading system is available • Documented that a system not available at the first renewal survey, flag gives an extension until the next Annual Survey

22. NOx emissions – Tier II (new engines) • Tier II standards (emission reductions related to Tier I limits): • 15.5% reduction (slow engines) • 15.5% and 21.8% (medium speed) engines • 21.8% reduction (fast engines) • Applies to engines installed on ships constructed on and after 1 January 2011 Engines manufacturers says it is possible

23. NOx emissions-Tier III (new engines) • Tier III standards – 80% emission reductions from Tier I limits • Tier III limits apply to engines: • installed on ships constructed on & after 1 Jan 2016 • power output of > 750 kW (130 kW – 750 kW may be exempted by the Administration) • Tier III limits in ECAs only • Outside ECAs - Tier II limits

24. Revised Annex VI

25. INTERTANKO welcome IMO package • Goals set by the INTERTANKO Council fully achieved: •  a solid platform of requirements • realistic and feasible • contribute to achieve a global, long-term and positive reduction of air emissions from ships; and • contribute to a long-term and predictable global regulatory regime Cleaner, Simpler and more Efficient ships

26. GHG reduction • Ship – striving for efficiency improvement • Engine • Hull, • paint, • cleanliness • shape • Kite/sails…..others • Trades- charterers/traders optimising logistic • Ballast part • Part loading • Sourcing • Indexing of ships Cleaner, Simpler and more Efficient ships

27. OUTCOME ON MARPOL ANNEX VI THANK YOU VERY MUCH Cleaner, Simpler and more Efficient ships