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An International Fund for Greenhouse Gas Emissions from Ships INTERTANKO ISTEC & Executive Committees Dubai, 20 -21 January 2009 Christian BREINHOLT Director Danish Maritime Authority. What is the situation?. IMO - The Specialised Agency - No More Favourable Treatment UNFCCC
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An International Fund for Greenhouse Gas Emissions from Ships INTERTANKO ISTEC & Executive Committees Dubai, 20 -21 January 2009 Christian BREINHOLT Director Danish Maritime Authority
What is the situation? • IMO - The Specialised Agency - No More Favourable Treatment • UNFCCC - A new global agreement in 2009 (COP 15) - Common but Differentiated Responsibilities
IMO action on GHG emissions from ships • Nine fundamental principles • Technical measures • Operational measures • Market based measures
Nine fundamental principles • Effective in contributing to the reduction of total global GHG emissions • Binding & equally applicable to all flag States • Cost-effective • Able to limit or effectively minimize competitive distortion • Based on sustainable environmental development without penalizing global trade and growth • Based on a goal-based approach and not prescribe specific methods • Supportive of promoting and facilitating technical innovation and R&D in the entire shipping sector • Accommodating to leading technologies in the field of energy efficiency • Practical, transparent, fraud free and easy to administer
Principal debate in IMO • IMO or UNFCCC principles? • Before or after COP 15? • Mandatory or voluntary? • Technical and/or market based?
Future work in IMO • IMO GHG WG II: 9-13 March 2009 • MEPC 59: 13-17 July 2009 • Assembly: 23 November - 4 December • COP 15: 1- 18 December 2009
An International GHG Fund - rationale for the proposal • Long life of ships • Growth in international shipping • Contributions from all sectors • Offsetting GHG emissions
An International GHG Fund – Key Elements • Bunker fuel contribution: - Mandatory registration of Bunker Fuel Suppliers - Based on the Bunker Delivery Note as evidence - Collection by registered Bunker Fuel Suppliers - Direct transfer to the International GHG Fund - Ships in international trade – all marine fuels • Revenues: - Mitigation, Adaption and Technology Projects - Non-vessel Specific R&D Projects - Technological Cooperation within IMO • A global, binding, separate legal entity – a new Convention
An International GHG Fund - Obligations The Ship Owners/Operators: • Purchase fuel from registered Bunker Fuel Suppliers • Keep the Bunker Delivery Note on board The Bunker Fuel Suppliers: • Mandatory/voluntary registration • Provide a certified Bunker Delivery Note • Collect and transfer directly to the International GHG Fund • Electronic report and recordkeeping of bunker fuel sold The States Parties: • Port State Control • Inspections of Bunker Fuel Suppliers
An International GHG Fund - Organisation and Administration Legal Structure based on the IOPC Funds: • Assembly • Secretariat Tasks and responsibilities: • Receive, record and monitor information • Maintain and allocate revenues • Keep a ship specific registry • Keep a global registry of Bunker Fuel Suppliers • Submit an annual report
CO2 offsetting impacts through a contribution Key figures Total emissions from international shipping: approx. 1,100 Mt. CO2 (BLG 12/6/1) Consumed bunker fuel: approx. 365 million tons Actual price for a JI/CDM-credit: approx. EUR 10-15 (approx. $15 -22.5) Expected future price for JI/CDM credit: approx. EUR 20-30 (approx $30-45) Different scenarios GHG contribution at a given US dollar per ton bunker fuel:
An International GHG Fund - Virtues • Meet all nine fundamental principles: - Contribute to reductions in global GHG emissions - Equally applicable to ships – regardless of flag - Allow growth in international shipping - Support technical innovation and R&D - Easy to administer • Assist solving the challenges of climate change • Revenues for the benefit of developing countries • Embrace Common but Differentiated Responsibilities (States) and respect No More Favourable Treatment (ships) • Emission baseline established for free • Eliminates any need for allocating GHG emissions • Rely on well-established conceptual approaches
An International GHG Fund Main points of concern addressed by INTERTANKO: • Kyoto compatibility? • GHG reductions through offsetting? • Varying contributions according to bunker fuel? • Enforcement mechanisms for Bunker fuel suppliers? • Non-compliance by ships and/or Bunker Fuel Suppliers? • Practicality of the existing Bunker Delivery Note System?