Emissions regulations for shipping
From a climate-policy perspective, maritime operations have so far been overlooked. Now that the academia1 and the Intergovernmental Panel on Climate Change have identified the shipping industry as one of the biggest contributors to climate-damaging emissions, this industry too is moving to the center of the political climate change debate – with consequences for shipping companies:
In April 2008, the International Maritime Organization (IMO) approved a reduction in sulfur emissions for the shipping industry. From the year 2020 shipping companies either have to use distilled fuels with a limited sulfur content of 0.5% instead of heavy fuel oil or have to use scrubbing technology2 to clean their exhaust gases3.
For shipping companies using distillate fuels means a doubling of fuel costs in the future, since refined products such as Marine Gas Oil (MGO) and Marine Diesel Oil (MDO)4 are considerably more expensive than highly sulfurous heavy fuel oil which is predominantly being used as ship fuel at present.
Already today shipping companies must use “clean” fuel with a maximum sulfur content of 1.5% when operating their fleets in what are called SECAs (Sulfur Emission Control Areas) on the North Sea and Baltic Sea. This threshold will drop to 1% starting in 2012. This is nothing less than a MDO/MGO- obligation since it is not possible to reduce the sulfur content of heavy fuel oil to this level. The result will be higher fuel costs from having to convert from heavy fuel to diesel, and from price increases in combination with a greater demand for MGO and MDO. Starting in 2015 the maximum allowable sulfur content in marine fuels within these regions will be reduced once more to 0.1%, which will set off another rise in prices.
In addition to the regulations already passed and in response to global political pressure, the IMO is currently preparing a regulation on the reduction of CO2 emissions from shipping in the form of a CO2 indexing scheme:
EEDI (Energy Efficiency Design Index)
The EEDI is a mathematical formula that provides a specific energy-efficiency figure for an individual ship design, expressed in grams of CO2 per ship’s capacity-mile, e.g. tonne-mile. A smaller EEDI value means a more energy-efficient ship design. Reducing the required EEDI, over time, will stimulate the continued technical development of all the components that influence a ship’s fuel efficiency and provide a transparent mechanism for comparing the energy efficiency of individual ships.
SEEMP (Ship Energy Efficiency Management Plan)
The SEEMP provides an approach for monitoring ship and fleet efficiency performance over time, and encourages the shipowner, at each stage of the plan, to consider new technologies and practices when seeking to optimise ship performance. The SEEMP also applies to existing vessels.
MBM (Market-Based Mechanisms)
Economic measures that could be applied globally to shipping in order to encourage emission reductions. MBM proposals under review range from a contribution or levy on all CO2 emissions from international shipping or only from those ships not meeting the EEDI requirement, via emission trading systems, to schemes based on a ship’s actual efficiency according to both its design (EEDI) and operation (SEEMP).
Experts assume that corresponding regulations will be implemented in a timely manner. Thus, shipping companies will also be burdened with emissions-based levies in the future. CO2 emissions can only be effectively reduced by burning less fuel, e.g. by using SkySails.
2: The so-called “scrubbing“ describes a filtering technology similar that of a catalyzer. The exhaust gas flow of the ship is led through seawater. In doing so, harmful sulfur oxides react with the seawater and transform to seemingly harmless reaction products.
3: IMO: Air pollution from ships
4: Heavy fuel oil (well known as the quality “IFO“) possesses an average sulfur content of 3.5%, whereas the sulfur content of refined diesel oil qualities such as MGO (Marine Gas Oil) and MDO (Marine Diesel Oil) is limited to approximately 1- 1.5%. The price for MGO/MDO is approximately twice as high as that of heavy fuel oil.
Overview on actual and planned emission regulations from the IMO