Financing and roadmap for roll-out of clean inland ship technologies

Transcription

1 Financing and roadmap for roll-out of clean inland ship technologies Friday 13th of April, Nijmegen Funded by: Martin Quispel, partner STC-NESTRA

2 Contents Urgency to green the inland vessel fleet Costs and benefits of greening the fleet, the gap between social and business viewpoints A stick and carrot approach to green the fleet Financing and business model for greening the fleet

3 Urgency masterarbeit-zu-stickoxiden-100.html

4 Urgency 2003 Limit value NOx: IWT CCNR2: 6.0 gram/kwh Road: 0.4 gram/kwh => Factor 15 difference Limit value PM: IWT CCNR2: 0.2 gram per kwh Road: 0.01 gram per kwh Factor 20 difference 2020 NRMM EU Stage V /1998 With NRMM Stage V (2020), high power engines (+300kW) for IWT: 1.8 gram NOx limit Factor 4.5 difference compared to Euro VI trucks.

5 Urgency Very slow renewal of engines Business as usual shows only modest reductions until 2040, despite new regulation NRMM Stage V: 31% NOx reduction 43% PM reduction

6 Urgency

7 Costs & Benefits Business level SCR-DPF Stage V:

8 Costs & Benefits Business level SCR-DPF Stage V:

9 Costs & Benefits Business level LNG, example dual fuel Stage V, required investment:

10 Costs & Benefits Business level LNG, example dual fuel Stage V, payback time (years):

11 Costs & Benefits Business level LNG, example dual fuel Stage V: Net Present value for the shipowner/operator, 110metre motortankervessel m3 gasoil consumption per year

12 Costs & Benefits Societal level - benefits NOx PM CO2 TOTAL [mln EUR] [mln EUR] [mln EUR] [mln EUR] External costs per year Potential savings excluded -821 Remaining external costs LNG&BIO 271

13 Concluding No significant incentives to be green, except for port dues but these have only a marginal effect No internalization of external costs in IWT Stage V is the reference to be implemented on short term to keep the license to operate for IWT Introduction of pollution pays principle, creation of business case for ship-owner/operator Level playing field essential => EU approach Sector representation in the driving seat (EBU, ESO) Growing challenge: zero emission transport (COP 21) which shall require strong interventions

14 Stick & Carrot Legal interventions by EC/CESNI: Stage V emission levels for existing vessels by 2030? Legal adoption of procedures to certify after treatment systems reaching Stage V emission levels on existing vessels Creation of a business model and funding for CAPEX and OPEX to realise Stage V towards deadline: Greening Fund Promotion, support and knowledge clustering through platforms (e.g. EIBIP/EICB)

15 Greening Fund 1.05 Billion Euro investment for whole EU fleet to reach Stage V by means of after treatment (SCR-DPF) What causes air pollutant emissions and greenhouse gas emission? Burning (fossil) fuel Most effective and efficient way: a environmental surcharge on the fuel used in IWT. There is already a successful charge for waste collection to be paid for each m3 of fuel (7,50 euro): CDNI. With such a scheme greening the vessel gets a business case on business level. This creates an accelerated approach and much more awareness by shippers, forwarders as well as the ship owners/operators. Fuel bill (including surcharges) is often paid separately by clients of ship-owners.

16 Costs & Benefits Societal level - investments

17 Costs & Benefits Societal level - investments

18 Costs & Benefits Societal level - investments Potential no. IWT vessels on LNG scenario1 scenario2 scenario3 scenario4 Investment costs (factor) Payback period (years) / requirement from banks Price difference LNG-Diesel ( per liter) No. Vessel type Vessels Investment need [mln] No. Vessels Investment need [mln] No. Vessels Investment need [mln] No. Vessels Investment need [mln] Passenger vessels (hotel/cruise vessels) Other push boats <500 kw Push boats kw Push boats >=2000 kw Motor vessels dry cargo >=110m length Motor vessels liquid cargo >=110m length Coupled convoy (mainly class Va + Europe II lighter) Total potential and investment per scenario Respresentative diesel fuel to LNG in m3 26, , , ,107 % LNG vessels in total EU IWT fleet (12,263) 0% 2% 6% 9% % LNG vessels in share (diesel) fuel consumption 2% 18% 30% 40%

19 Greening Fund 1.05 Billion Euro (upfront) investment for whole EU fleet to reach Stage V by means of after treatment (SCR-DPF) LNG scenario may give additional financing needs: Scenario mln Scenario mln Scenario mln Scenario mln Further steps to zero-emission to be incorporated in the approach (e.g. full electric sailing, biofuels, hydrogen)

20 Greening Fund LNG has a higher investment than SCR-DPF, but has a potential business case in case the fuel price advantage (LNG vs gasoil) is sufficient Bottleneck: uncertain fuel prices and access to loans Solution: investment partly paid by a European Greening Investment Fund for IWT, linked to additional loan facilities by EIB via banks.

21 Greening Fund Currently: 1.3 million m3 gasoil fuel consumed per year by IWT in the EU 50% co-funding by public bodies (EU, MS, Regions) combined with an environmental surcharge of 4 cents per liter fuel for a period of 10 years would generate sufficient funds for 100% funding of investment. Current fuel price: approximately cents per liter

22 Greening Fund Investment - share 100% covered by fund (grant) mln euro Share public funded: 50% 50% EU 20% 20% MS 15% 15% Regions 15% 15% Share private funded 50% 50% Public part: Grant EU (mln euro) MS (mln euro) Regional bodies (mln euro) Scenario #vessels % m3 gasoil share NL public bodies 71% 61% NL National (Rijk) (mln euro) NL Regions (mln euro) years - per year (mln euro) Private part: Contribution Reserve Fund (mln euro) Remaining to be raised (mln euro) Fuel per year (billion m3) 1,3 1,3 Time period (years) Total fuel billion m3 during period Environmental surcharge per liter during period 0,04 0,04

23 Greening Fund Vessel type - representative vessels PAX 135m Push B4 MVS110m MTS 110m C3L/B Total fixed costs per year 1,487,828 1,609, , , ,785 Total labour costs per year 1,429, , , , ,698 Total fuel costs per year (average) Excl. surcharge ( 0.49 / liter) 215, , , , ,815 Incl. surcharge over 10 yrs ( / liter) 251, , , , ,455 Incl. surcharge over 20 yrs ( / liter) or 10 years & 50% co-finance 233, , , , ,135 Incl. surcharge over 20 yrs & 50% co-finance ( 0.02 / liter) 224, , , , ,975 Total costs Excl. Surcharge 3,133,456 2,765, , ,745 1,311,298 Incl. surcharge over 10 yrs 3,168,536 2,854, , ,515 1,355,938 Incl. surcharge over 20 yrs or 10 years & 50% co-finance 3,150,996 2,810, , ,130 1,333,618 Incl. surcharge over 20 yrs & 50% co-finance 3,142,226 2,788, , ,938 1,322,458 Costs increase in % of total annual costs Incl. surcharge over 10 yrs 1.12% 3.20% 4.10% 3.08% 3.40% Incl. surcharge over 20 yrs or 10 years & 50% co-finance 0.56% 1.60% 2.05% 1.54% 1.70% Incl. surcharge over 20 yrs & 50% co-finance 0.28% 0.80% 1.03% 0.77% 0.85%

24 Greening Fund Grants from governments (EU, MS, regional authorities) to support the reduction of external Costs. Multiplier: 1 euro invested gives approx euro savings of external costs over 10 years Differentiated surcharge to accelerate greening and compensate additional operational costs (urea, ): Reduction for Stage V vessel Further reduction for low/zero carbon energy Providing a direct competitive advantage for green vessels in contracting

25 Roadmap Discussions about follow-up with: European Commission, DG MOVE European Barge Union and European Skippers Organisation River Commissions and Member States Final Event Vienna: Tuesday 17 th of April 2018

26 Discussion points Deadline for reaching Stage V for existing vessels: All vessels? Only the larger vessels? Acceptance of a Greening Fund for the sector, impact of additional costs? Level of public support: subsidies Governance of Greening Fund

27 27 Thank you for your attention! More information & contact details: Martin Quispel Phone: