Update on Environment Issues Asian Regional Panel Meeting

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1 Update on Environment Issues Asian Regional Panel Meeting Singapore, 25 April 2018

2 Agenda Emissions to water Ballast water management Contingency Measures Compliance and commercial Root cause BWMS failures information exchange Port data collection and review Ballast Water Record Book guidance on entries Biofouling IMO review of 2011 guidelines Update of guidance charter party and dry-dock checklists VGP June draft for comments VIDA

3 A Recap IMO adopts amendments to Regulation 14 of MARPOL Annex VI sulphur limits of 0.50% and 0.10% only 2020 no delay prohibit carriage of HSFO Options for Ship Owners MGO/MDO, Low Sulphur Fuel Oil (LSFO) - blends, hybrids Exhaust Gas Cleaning Systems (EGCS) scrubbers Other fuel types, e.g. LNG, methanol, etc. Cost for compliance? very expensive, no matter the option!

4 Enforcement The need for consistent and uniform application of the Regulation Fuel oil non-availability guidance and information sharing on fuel oil non-availability standard format for reporting fuel oil non-availability; Verification and control mechanism and actions control mechanisms to ensure compliance, e.g. in-use fuel samples Port State Control sampling point interpretation of fuel sample test results targeting measurements (remote sensing or portable devices) other enforcement practices dedicated to open-sea compliance monitoring

5 Enforcement The need for consistent and uniform application of the Regulation Additional guidance and information guidance addressing fuel quality issues, fuel availability, quality assurance and integrity of the fuel supply chain best practice for fuel oil purchasers/users; best practice for Member State/coastal State; and best practice for fuel oil providers.

6 Compliance i. fuel oils Ship Owners need to plan ahead and choose means for compliance on existing ships Ship implementation plan: consumption of the remaining HS-HFO and time needed that current fuels will "be fully flushed" prior to entry into force of the regulation how to deal with and limit the impact of possible non-availability of LS-HFO cleaning of the fuel tanks crew awareness and training And consider: Impact of new fuels on machinery systems Other safety implications e.g. preparations of boiler for use of LSFO, safety issues in case of nonavailability of LSFO (switching FO/LSFO in boilers)

7 Compliance i. fuel oils NOT the do nothing option Fuel Oil Management Plan Bunker Fuel Consumption Monitoring Bunker Fuel Required for Voyage Bunker Purchasing Bunker Delivery Note Fuel Oil Availability Actions Required prior to Bunkering Bunkering Plan Chief Engineer s Bunkering orders Watch Keeping/Duties Communication Training of Vessel's Crew Involved in Bunkering Actions Required during Bunkering Actions Required after completion of Bunkering Sampling Sampling methods Sampling and Sample Integrity Sampling Location Sealing of the Retained sample Retained Sample Storage Handling and Retention of Bunker Samples Fuel Switching Procedure Duties/Responsibilities List of drawings Annexes

8 Compliance ii. alternative fuels Regulatory IGF Code New buildings Managing supply

9 Compliance iii. EGSC (Scrubbers) open loop closed loop dry scrubber Size direct proportional with % of Sulphur scrubbed Reduction rate of sulphur dependent on sulphur content of fuel Water-wash and sludge handling IMO Guidelines Port Authorities policy for use of scrubbers

10 Compliance iii. EGSC (Scrubbers) T/C Clauses for scrubbers description of scrubber system incl. modes, max. sulphur and approvals impact on bunker clauses; ISO 8217 has no sulphur limit, scrubber ships will be excluded from sulphur limits right of Charterer to request an enhanced mode (closed loop instead of open loop, scrubbing to 0.1%S worldwide) possible duty of Charterer to have a minimum quantity of compliant fuel on board (for possible unplanned maintenance at scrubber) defects at scrubbers: second charter rate required if scrubber is not working (owners cannot compensate the fuel price difference) supply of caustic soda solution, fresh water and scrubber sludge disposal rejection of scrubbing by local authorities maintenance and off-hire

11 Emissions to air GHGs Levels of Ambition, set by the IMO MEPC 72 1 carbon intensity of the ship to decline through implementation of further phases of the energy efficiency design index (EEDI) for new ships review and strengthen EEDI requirements; 2 carbon intensity of international shipping to decline reduce CO2 emissions per transport work, as an average across international shipping, by at least 40% by 2030, pursuing efforts towards 70% by 2050, compared to 2008; 3 GHG emissions from international shipping to peak and decline to peak GHG emissions from international shipping as soon as possible and to reduce the total annual GHG emissions by at least 50% by 2050 compared to 2008 whilst pursuing efforts towards phasing them out as called for in the Vision as a point on a pathway of CO2 emissions reduction consistent with the Paris Agreement temperature goals.

12 Emissions to air GHGs List of candidate measures and possible timelines short-term measures: finalized and agreed by MEPC between 2018 and 2023, mid-term measures: between 2023 and 2030, and long-term measures: beyond 2030

13 Why ship recycling? EU Waste Shipment Regulation Dutch prosecutors; Seatrade Group case EU Ship Recycling Regulation (EUSRR) likely to enter into force end 2018 IHM compliance EU List of Facilities (European and non-european) Hong Kong Convention (HKC) Ratified by six countries to date (15(6) / 40%(21.23%) / 3%(0.02%)) Turkey, China and India required NGO Platform targeting shipping companies Tanker scrapping rates increasing Market conditions, aging fleet and increasing environmental regulations Scrutiny of environmental, social and governance (ESG) reports

14 INTERTANKO Statement on Ship Recycling and the Hong Kong Convention 1. INTERTANKO supports the introduction of international environmental and safety standards for ship recycling and encourages IMO Member States to ratify the Hong Kong Convention on Ship Recycling 2. Until the HKC is ratified and has entered into force, INTERTANKO recommends the use of the shipping industry s guidelines on transitional measures for shipowners selling ships for recycling (second edition 2016) 3. Efforts by ship recycling facilities and class societies to adhere to the standards of the HKC prior to its implementation should be applauded and encouraged. In this respect, INTERTANKO welcomes the issuance of Statements of Compliance, verified by reputable third party organisations such as a member of IACS, to ship recycling facilities around the world. INTERTANKO believes that this positive progress: i. Opens the market for the international shipping industry to recycle globally at facilities that have been shown to meet the HKC standards; ii. Sets the benchmark for other facilities on the Indian sub-continent and elsewhere to follow suit and further expand the market for HKC compliant facilities, and; iii. Demonstrates to the Governments in the leading recycling States that their facilities have the capability of meeting the HKC standards and as such, these countries should commence the process of ratifying the HKC.

15 INTERTANKO Environmental Committee activity: Compliance Reputation Best practice Guidance on Developing and Maintaining the IHM in accordance with the HKC and EUSRR requirements Clear compliance schedules Explanation of the visual and sampling check Procurement procedures Materials declarations (avoiding potentially hazardous materials)

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