Audit, Compliance and Risk Blog

Emissions in the Shipping Industry: Who Is Steering the Ship?

Posted by Jane Dunne on Tue, Apr 05, 2016

Skysails_blog_pic.jpgYou might ask how it is possible that there is no direct mention of the shipping industry in the Paris Agreement at COP21. Many people wonder just how much air pollution is created by the shipping industry and who is working to improve this mysterious source of greenhouse gas emissions?

Did You Know?

The shipping industry emits approximately 1000 million tonnes of CO2 annually and is estimated to be responsible for roughly 3% of global greenhouse gas emissions (3rd International Maritime Organization (IMO) Greenhouse Gas (GHG) study).

Shipping emissions are predicted to increase between 50% and 250% by 2050 – depending on future economic and energy developments (European Commission Climate Action). Such an increase is not compatible with the internationally agreed goal of keeping the global temperature increase to below 2°C, compared to pre-industrial levels, which requires worldwide emissions to be at least halved from 1990 levels by 2050.

According to Seas at Risk, shipping could be responsible for 17% of global CO2 emissions in 2050, if left unregulated. The big concern is that, having escaped explicit mention in the Paris climate deal, emissions from shipping could jeopardise the efforts of other sectors – making it all but impossible to keep global warming well below two degrees.

Methane emissions are projected to increase as more ships use liquefied natural gas (LNG) in their fuel mix (to comply with sulfur emission regulations) and it is known that methane emissions are higher from LNG-powered ships than other marine fuels (EU Science for Environment Policy).

Somewhere between 18 to 30 percent of nitrogen oxide and 9 percent of the sulfur oxides emitted globally are from the shipping industry. Nitrogen oxides (NOx) form when the air (which contains nitrogen), is drawn into an engine, mixes with the fuel, and ignites (Transport Canada Ship Safety Bulletin). These toxic emissions are known to cause respiratory issues for humans and can increase the risk of heart attacks. (For more information on nitrogen oxide, see Air Quality, Rulebook H, “Federal NOx Budget Trading Program” in Environmental Auditing: Federal Compliance. For more information on sulfur oxides, see Air Quality in Environmental Auditing: Air Quality Management in Santa Barbara, “Air Toxic: Hot Spots.”)

Who Makes the Rules?

According to the IMO, CO2 emissions from international shipping cannot be attributed to any particular national economy due to its global nature and complexity of operations, as acknowledged by the Kyoto Protocol.

As you can imagine, the difficulty of sorting out which country is responsible for the CO2 emissions is not easy. When considering the country that is responsible for the emissions of a ship, do you look to the ship’s home port, the country where the ship begins its voyage, the country that will receive the goods from the voyage, the producer of the goods onboard or the country of the end user, which may still be a country away from the receiving port?

We know that the shipping industry needs to limit and reduce GHG emissions, however, who will “police” the (so far non-existent) rules?
To address certain types of emissions from shipping, the IMO, through MARPOL (short for “marine pollution”), developed a set of standards (Annex VI) for vessel engines to limit sulphur oxides (SOx) and nitrous oxides (NOx) contained in ships’ exhaust gas, and prohibit deliberate emissions of ozone depleting substances (ODS). MARPOL Annex VI also regulates shipboard incineration, and the emissions of volatile organic compounds (VOC) from tankers.

In the North American Emission Control Area (NA-ECA), new vessel engines over 130 kilowatts, must meet NOx emission standards (EPA). It should be noted, however, that this set of standards only applies to “new” engines.

This month, the Marine Environment Protection Committee (MEPC), which is part of the IMO, will be meeting for MEPC 69. MEPC 69 will take place from April 18th to 22nd and will cover such important issues as air pollution, energy efficiency, reduction of GHG emissions, pollution prevention/response, and enforcement of MARPOL and other related requirements.

Another group, calling themselves the Sustainable Shipping Initiative (SSI), has created a “roadmap” (not sure why they aren’t calling it a “chart” since this is marine travel, not cars we are talking about) to set sustainability goals for 2040. The SSI is made up of just under 20 major names in the shipping industry, including recognizable names such as Cargill and Maersk Line.

Back in December 2015, the Maersk Group welcomed the final Paris agreement, yet stated that they were disappointed that the outcome “does not regulate the environmental impact of shipping.” 

Why would these big players invite regulation? Well, some companies are concerned about how the public will view an industry that is not doing its part to have regulatory structures in place for GHGs. So, groups like the SSI are attempting to create their own sector-based goals, in order to be seen to be doing something about the issue. Avoidance of regionalised legislation is also a likely important motivator in any corporate initiatives to put forward its own green legislation. Corporations know that regional (rather than international) rules regarding emissions could result in an abundance of what is called “out-flagging.”

What is “outflagging”? Outflagging is when a ship is registered in a country other than the one in which the owner resides. Outflagging is frequently done with merchant and cruise ships, to make them subject to less stringent regulations in the country of registration. This is also referred to as using a “flag of convenience.”

The European Union (EU) is calling for a global approach to reducing greenhouse gas emissions from international shipping. As a first step, starting in 2018, large ships (over 5,000 gross tonnes) using EU ports will be required to report their verified annual emissions and other relevant information, as part of the MRV Regulation (which stands for monitoring, reporting and verification). The MRV system is estimated to cut CO2 emissions by up to 2% compared with a business as usual situation, as well as reduce net costs to owners by up to €1.2 billion per year by 2030, according to the European Commission's impact assessment.

Asian countries, such as Singapore, with its Maritime Singapore Green Initiative and Hong Kong with its low-sulfur fuel content rules that began in 2015, have been leading the way for Asian action on GHGs.

Efforts to reduce GHGs in the shipping industry can be seen in pockets across the globe, but what we really need is for the entire world to “get onboard,” so to speak.

New Technologies and Innovations

“A greener ship is a cheaper ship” says Wayne Blumenthal, Commercial and Strategic Manager of RightShip, a ship vetting company that has created an online tool to help industry eliminate substandard ships from the supply chain, while reducing the carbon dioxide emissions emitted by the world’s marine fleet. RightShip’s online tool estimates the energy efficiency rating for a vessel and allows users to compare a ship’s carbon dioxide emissions to vessels of a similar size and type. This tool estimates the theoretical amount of carbon dioxide emitted per tonne nautical mile travelled, based on the design characteristics of the ship at the time of build, such as cargo carrying capacity, engine power and fuel consumption.

A German company that is putting technology forward to simultaneously reduce emissions and operating costs in shipping is SkySails. The SkySails system uses large dynamically flying towing kites, which generate up to 25 times more energy per square meter than conventional wind propulsion systems. SkySails can reduce shipborne CO2 emissions, while decreasing the outputs of sulfur and nitrogen oxides at the same time. The IMO estimates that up to 100 million tons of climate damaging carbon emissions can be eliminated worldwide every year with the help of SkySails technology.

DuPont has created a product called a “marine scrubber.” These marine scrubbers are ship exhaust gas cleaners that reduce sulfur and particulate emissions from ship engines. Cleverly, these scrubbers are slim in design, so they can not only be integrated into a new build’s scrubber system, but can be retrofitted into an older ship.

The Unchartable Truth

Shipping is one area where environmental regulations do not appear to be keeping up with other greenhouse gas polluting industries, but there are some hopeful developments on the horizon. Going forward, the shipping industry may see international emissions trading schemes, new incentives, and novel ways to reduce emissions that are yet to be created.

Specialty Technical Publishers (STP) provides a variety of single-law and multi-law services, intended to facilitate clients’ understanding of and compliance with requirements. These include:

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Jane Dunne is a Senior Editor for Specialty Technical Publishers. She works on a diverse catalogue of environmental publications that are recognized across North America as effective tools to ensure regulatory compliance with complex requirements.

Tags: EHS, Greenhouse Gas, ghg, Hazcom