Enforcement - the way to cleaner shipping and a fair business

Transcription

1 Enforcement - the way to cleaner shipping and a fair business Kaare Press-Kristensen Senior advisor on air quality The Danish Ecological Council Kaare@ecocouncil.dk

2 Illustrative numbers Sulphur-regulation: 1% (NS+BS, since 2010). Maersk Line had 9,690 port calls (NS+BS, 2012). During these Maersk Line had 57 port inspections. Number of inspections controlling sulphur: 0 Saving by non-compliance: 200,000 $ from 2015 (English channel to Gdansk and back). Will everybody be in compliance next year?

3 Two business options Business option 1: We can be in compliance and try to pass on the extra 200,000 $ fuel costs to the cargo owners. Will we have success? Yes, if everybody else is in compliance! Business option 2: We can violate the regulation and outmatch ships being in compliance. Will we have success? Yes, if there is no efficient enforcement!

4 Let s realize business option 1 Efficient enforcement is the way to cleaner shipping and a fair business - allowing ship-owners to pass on extra fuel (or scrubber) costs to cargo owners. Efficient enforcement consists of efficient control and sanctions preventing non-compliance. But we still haven t seen an efficient enforcement strategy on an international level... and 2015 is just around the corner!

5 Control: Online data Measuring devices for SO 2 /CO 2 are mandatory for all ships with scrubbers (to prove the efficiency). Price: 40-50,000 $ - online measuring data. Devices are sealed to avoid manipulation. It would be very efficient control to require online SO 2 /CO 2 measurements for all ships in SECA... and on a global level after 2020.

6 Sanctions: 15 days in port Ships violating the regulation should be taken to nearest port and detained there for 15 days. Insurances do not cover delay costs if the delay is caused by violation of the sulphur regulation. So delay costs will be on top of port fees etc. These sanctions (and online measurements as efficient control) would realize business option 1 ensuring cleaner shipping and a fair business.

7 And we are not alone The Danish Shipowner s Association fully supports a strict enforcement making everybody obey the decided regulation and introducing a hard punishment for free-riders. On-line emission measurements and detaining free-riders in nearest ports could be efficient enforcement tools. Jan Fritz Hansen, Vice President, The Danish Shipowners Association

8 Conclusions Efficient enforcement is the way to cleaner shipping and a fair business allowing ship-owners to pass on all extra fuel (or scrubber) costs to cargo owners. Efficient enforcement consists of efficient control and sanctions preventing non-compliance: - Efficient control should be online measurements. - Sanctions should be 15 days in nearest port. Or in other words Let s maintain shipping as a fair business and reduce the environmental impact.

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11 Will regulation sink all ships? If 0.1% S fuel, SCR and filters would double shipping costs. What would be the price increase on wine from New Zealand? The price today is 10 $. The shipping costs is 0.1 $. If the price on shipping doubles the wine will cost 10.1 $. Will I buy less wine?

12 Is the regulation too strict? New trucks in EU have SCR & particulate filters!

13 Are reductions profitable? Yes: If health costs (externalities) > removal costs Externalities ($ per kg) SO 2 NO X PM 2.5 Northern hemisphere North Sea and Baltic Sea What are the removal costs?

14 Cost-benefit calculations Northern hemisphere: Externalities (health costs) SO 2 : 15 $ per kg Removal costs (Replacing 2.7% S with 0.5% S): (600 $ $) / 44 kg SO 2 = 3.5 $ per kg North Sea and Baltic Sea: Externalities (health costs) SO 2 : 24 $ per kg Removal costs (Replacing 1% S with 0.1% S): (720 $ $) / 18 kg SO 2 = 13.5 $/kg Prices from bunkerworld.com, Rotterdam

15 The polluter pays principle Using 1 ton bunker fuel in the Northern hemisphere emits about 54 kg SO 2, 70 kg NO X and 1.5 kg PM 2.5. Total externalities without CO 2 : 1,650 $/ton. Present price on bunker fuel: 455 $/ton. If shipping companies paid for health damage from air pollution then the price of bunker fuel would be 4-5 times higher than today + CO 2 pollution. What would happen if shipping had to pay?

16 Air pollution from shipping What happens in a ship engine? 1) Hydrocarbons (bunker fuel) are oxidized. 2) Sulphur in the bunker fuel is oxidized. 3) Free nitrogen in the air is oxidized. Formation of four key air pollutants 1) Hydrocarbons CO 2 and particles: BC/PM 2.5 2) Sulphur SO 2 3) Free nitrogen NO X (Ultrafine particles, CO, PAHs, NMVOC etc.).

17 Adverse effects CO 2 BC/PM 2.5 SO 2 NO X Direct health effects X (X) (X) Indirect health effects X X Acidification (land) X X Acidification (sea) X (X) (X) Eutrophication (sea) (X) Global warming X X

18 Is the pollution significant? Shipping emits around 1 billion ton CO 2 annually i.e. about 3% of the global emission data (ton) PM 2.5 SO 2 NO X Northern hemisphere 250,000 1,870,000 3,355,000 North Sea and Baltic Sea 20, , ,000 Seas around Denmark 4,000 41, ,000 Danish sources (land) 25,000 10, ,000

19 Are the effects significant? Shipping causes the same health effects in DK as the sum of all land based emissions in DK data Shipping on the Northern hemisphere Shipping in the North Sea and Baltic Sea DK Europe DK Europe Years of lost living 5, ,000 4, ,000 Airway diseases 327,500 27,500, ,600 8,425,000 Sick days (B-days) 500,000 43,700, ,000 13,400,000

20 Are the health costs significant? Health costs related to air pollution from shipping: Europe (billion $) SO 2 NO X PM 2.5 Total (billion $) Northern hemisphere North Sea and Baltic Sea

21 Many technical possibilities SO 2 : Bunker fuel with lower S, scrubbers and LNG. NO X : SCR, EGR, LNG and engine optimization. PM 2.5 : Bunker fuel with lower S, LNG, scrubbers and particulate filters. CO 2 (SO 2, NO X and PM 2.5 ): Fuel savings by slow steaming, larger ships, optimal design, better engines, WHR, hybrid sailing etc.

22 No efficient NOx regulation NOx causes 50% (Northern hemisphere) and 70% (North Sea and Baltic Sea) of the total health effects!

23 How about Sirena Seaways Going from Esbjerg to UK since Now the route has been stopped Was this route stopped due to the new sulphur regulation as claimed by some interests? Or was it the drop in passengers from 300,000 to 80,000 per year as a result of many low price flights and the stop of tax-free sale