Hellenic Mediterranen Panel 2 April 2009 Athens

1. Hellenic Mediterranen Panel2 April 2009Athens Peter M. Swift

2. INTERTANKO Overview • Incident Statistics • Council Agenda • Criminalisation Update • Diary Dates • Greenhouse Gas Emissions

3. Accidental oil pollution into the sea and tanker trade Billion tonne-miles 1000 ts spilt Record low pollution in 2008: 2,000 ts Source: INTERTANKO/ITOPF/Fearnleys

4. Accidental oil pollution into the sea and tanker trade Billion tonne-miles 1000 ts spilt Record low pollution in 2008: 2,000 ts Source: INTERTANKO/ITOPF/Fearnleys

5. Tanker and non-tanker incidents attended by ITOPF over the past 5 years

6. Tanker Incidents and accidental pollution Number incidents Based on data from LMIU, ITOPF + others

7. Tanker groundings incidents 180 150 120 90 60 30 0 01 02 03 04 05 06 07 08 78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 Number incidents Based on data from LMIU, ITOPF + others

8. Tanker incidents 2008 by type Source: INTERTANKO/LMIU/various

9. Tanker hull & machinery incidents Number incidents Based on data from LMIU, ITOPF + others

10. Tanker Engine incidents Number incidents Based on data from LMIU, ITOPF + others

11. Tanker Engine incidents Number incidents Based on data from LMIU, ITOPF + others

12. Council Agenda – 13 May 2009, Tokyo • Corporate Affairs • Piracy status report • Greenhouse Gas Emissions • Report items - Chemical items - Load Line Zones – Off South Africa - Criminalisation of Seafarers - update - Paris MoU – New Inspection Regime - Human Element – Roll out of TOTS - EU : MSP III / Mutual Recognition, Elections - US : General Permit /TWIC / Air Emissions

13. New Inspection Regime – Paris MoU Better targeting !!! “ Every ship eligible for a periodic inspection as follows: • High Risk Ship (HRS) every 5-6 months • Standard Risk Ship (SRS) every 10-12 months • Low Risk Ship (LRS) every 24-36 months ”

14. Area Proposed for North AmericaECA Designation 200 nm 200 nm

15. Criminalisation of Seafarers - Update • EU Ship Source Pollution Directive • “Hebei Spirit” officers • Support for: IMO/ILO Guidelines on the “Fair Treatment of Seafarers in the Event of a Maritime Accident”

16. DIARY DATES 2009 23 Apr Members’ Seminar, Singapore 24 Apr Crisis Preparedness &Media Awareness Workshop, Singapore 27 Apr Asian Regional Panel, Shanghai 12 May Chartering Seminar, Tokyo 13-15 May Annual Tanker Event 2009,Tokyo 13 May Associate Members Committee, Tokyo 19 May Vetting Committee, Singapore 20 May Vetting Seminar, Singapore 09 Jun Chemical Tanker Committee, Oslo 09 Jun Norshipping: Boat Cruise and BBQ, Oslo 09 Sep Human Element in Shipping Committee, Copenhagen

17. [ Initiatives to Reduce ]Greenhouse Gas Emissions Shipping has a head start as the most energy efficient means of transport

18. CO2 Emissions per Unit Loadby Transport Mode Large Tanker 1 Large Containership 3 Railway 6 Coastal Carrier 11 Standard-size Commercial Truck 49 Small-size Commercial Truck 226 Airplane 398 0 100 200 300 400 Units Relative Shipping energy efficient Source: Ministry of Land, Infrastructure and Transport (Japan): The Survey on Transport Energy 2001/2002 MOL (Japan): Environmental and Social Report 2004 18

19. TANKER SHIPPING A GOOD NEWS STORY Shipping’s GREEN Credentials • This car, weighing one tonne, uses 1 litre of fuel to move 20 kms • This oil tanker uses 1 litre of fuel to move one tonne of cargo 2,500 kms • more than twice as far as 20 years ago

20. TANKER SHIPPING A GOOD NEWS STORY Shipping’s GREEN Credentials • One US gallon of fuel moves one ton of freight 423 miles in this railcar • One US gallon of fuel moves one ton of cargo more than 6,500 miles in this tanker

21. Reductions in GHG (CO2) EmissionsDRIVERS FOR CHANGE • Driven hardest by a limited number of governments • Supported mostly by EU governments, plus Japan, Australia, Canada and a few others • Until recently only limited support in US (mostly environmental interests) • Relatively little enthusiasm in much of the developing world, but now changing ? • Environmental Lobby growing • And becoming more coordinated • Maritime industries showing considerable support • Proactive involvement • Although “hesitant” on market based instruments • Economic incentives strong • Fuel savings translate into potentially significant cost savings; plus incentives for innovation & new technologies

22. One particular challenge for the shipping industry- i.e. seaborne trade will continue to grow strongly Trends – Population, Energy Use, Seaborne trade & CO2 emissions Index There has been strong growth in shipping Source: Fearnleys/INTERTANKO

23. Kyoto Protocol • Established under UN Framework Convention on Climate Change (UNFCCC) and adopted in 1997 • Ratified by 181 countries – not the USA • Categorises Annex 1 (Developed) Countries and Non-Annex 1 (Developing) Countries • Annex 1 are committed to make GHG reductions with set targets, but also flexible mechanisms • Runs through to 2012, with Conference of Parties (COP15) to meet in Copenhagen in Dec 2009 to develop successor • Kyoto recognises “common but differentiated responsibilities”, i.e. developed countries produce more GHGs and should be “responsible” for reductions • Kyoto looks to IMO to address Shipping and ICAO to address Aviation, and as such these emissions are currently excluded from Kyoto targets

24. Initiatives underway at the IMO 1998: IMO initiated work on Green House Gas emissions 2003: IMO Assembly adopted Resolution A.963(23): Policies and Practices Related to the Reduction of GHG from Ships Today: Work continues through the MEPC This year: we can expect MEPC 59 to adopt - Mandatory Energy Efficiency Design Index for new ships Ship Energy Management Plan – existing ships: - Best practices to save energy used by the ship - Use of voluntary Energy Efficiency Operational Indicator In December: the outcome(s) of MEPC 59 will be presented to UNFCCC COP15 meeting in Copenhagen

25. Ship Performance Index:CO2 / work done e.g. tonnes of CO2 produced per tonne mile of cargo Energy efficiency design index mandatory for new -ships incentivises designers and builders. At the next stage: The ship’s design index should be less than a maximum limit to be set by regulations. The maximum value will then be lowered over time. Voluntary energy efficiency operational indicator - measures efficiency of ship in service. A management tool for owners and charterers to measure energy efficiency on a voyage. Incentivises the owner to keep hull and machinery “clean” and charterer to use the ship efficiently – capacity, routing and speed. Initiatives underway at the IMO

26. SEMP: Examples of Best Practicesfor tanker emissions & energy efficiency • Programme for Measuring and Monitoring Ship Efficiency • Voyage Optimization Programme • Speed selection optimization • Optimised route planning • Trim Optimization • Propulsion Resistance Management Programme • Hull Resistance • Propeller Resistance • Machinery Optimisation Programme • Main Engine monitoring and optimisation • Optimisation of lubrication as well as other machinery and equipment • Cargo Handling Optimization • Cargo vapours control procedure on all crude tankers (80-90% reduction of cargo vapours) • Cargo temperature control optimization • Energy Conservation Awareness Plan • On board and on shore training and familiarisation of company’s efficiency programme • Accommodation-specific energy conservation programme

27. IMO is also reviewing possible economic measures (instruments) to reduce CO2 emissions • Emissions Trading Scheme • Bunker Levy • GHG Compensation Scheme • Hybrids of above • Other, e.g. differentiated charges Industry has established Guiding principles and believe any measure should: • Be effective in reducing global GHG emissions • Be binding on and applicable to all ships • Be cost effective • Not distort competition • Support sustainable environmental development without penalising trade growth • Promote technical innovation and leading technologies • Be practical, transparent, fraud-free, easy to administer

28. Market Based instruments Key issues: • Global versus regional ? • Who administers ? • Still needed – if other industry initiatives in place ? ETS • Sets Cap – reduces over time • Open versus Closed system ? • Value of carbon – different schemes Levy • Does not set cap • A tax on fuel (used) GHG Compensation scheme • Does not set cap • A tax for a good cause – i.e. a charity !

29. Initiatives already under way- parallel voluntary measures For most ship types, some form of : • Speed optimisation • Voyage optimisation • Capacity optimisation isalready in hand. • For Tankers: • Liaison is encouraged between owners and charterers to optimise vessel speed and voyage schedules • http://www.ocimf.com/view_document.cfm?id=1147

30. Other initiatives under discussion Pending the setting of mandatory upper limits for the Energy Efficiency Design Index of new ships, there exists the potential for: • The Establishment of a Reference Value for a New Ship (i.e. a Target) • Development of a Rating System relative to the Reference Value Similar to the performance rating of white goods

31. Other initiatives already under way- parallel voluntary measures Ports / terminals • Ports developing Environmental Ship Index (for pollutants and GHGs) • Incentives to improve port efficiency • Reward environmentally friendly ships with lower port dues 2008 Representative Data – Product Carrier Pool 1-2 % Idle 19% Ballast 40% Laden 40% In Port

32. UNCTAD ConferenceMaritime Transport and the Climate Change Challenge Tanker/Bulker Container Operational New Build Retro-fit Ro-ro Ferry-Cruise Offshore Supply Estimates of fuel efficiency improvements are drawn from (Wartsila, 2008), (Green, Winebrake, & Corbett, 2008), (Bond, 2008) Source: International Transport Forum 2009, OECD

33. UNCTAD ConferenceMaritime Transport and the Climate Change Challenge Tanker/Bulker Container Operational New Build Retro-fit Ro-ro Ferry-Cruise Offshore Supply

34. THANK YOU For more information, please visit: www.intertanko.com www.poseidonchallenge.com www.shippingfacts.com www.maritimefoundation.com