Are regional ports ready to play their role in the environmental debate?

Presentation to the

Regional Ports 2008 ConferenceRegional Ports 2008 Conference

Townville 12-13 June 2008 by Llew Russell, Chief Executive Officer

of Shipping Australia Limited

In this presentation I will be addressing:

a. Alternative marine power

b. Are we ready for the new bio-hull fouling regime?

c. Preparing for the planned new ballast water management regime

d. Places of refuge

e. What potential stresses do coal loading and de-ballasting rates place on a vessel.

Outline

+ Sea transport is one of the least environmentally damaging modes of transport, and when compared with land based industry, is a comparatively minor contributor to marine pollution from human activities.

+ Various international regulations have been adopted by the IMO to address potential sources of pollution by ships eg. MARPOL 73/78 covers:

Annex I Convention covering pollution by oil

Annex II control of pollution of noxious liquid substances

Annex III prevention of pollution by harmful substances in package form

Annex IV prevention of pollution by sewage from ships

Annex V prevention of pollution by garbage from ships

Annex VI prevention of air pollution from ships (this Annex has been the subject of recent debate and will be amended in October this year)

Setting the scene

Comparison of exhaust gas emissions

Source: Swedish Network for Transport and the Environment

International Chamber of Commerce publication “Shipping and the Environment A Code of Practice”, Fourth edition, page 8. See www.marisec.org, publications.

Comparative fuel consumption

Source: Swedish Network for Transport and the Environment

International Chamber of Commerce publication “Shipping and the Environment A Code of Practice”, Fourth edition, page 8. See www.marisec.org, publications.

Comparison of CO2 emissions between different transport modes

Source: Swedish Network for Transport and the Environment

International Chamber of Commerce publication “Shipping and the Environment A Code of Practice”, Fourth edition, page 8. See www.marisec.org, publications.

+ Many SAL members actively working to reduce environmental footprint

Waste heat used for propulsion

Upgraded computers improving cargo handling, route and speed efficiency

Separation of wastes

New cylinder lubrication systems

Lower sulphur content in fuel

Use of TBT-free anti-hull fouling paint

Inboard protected fuel tanks

Shipping not standing still

Source:

Lloyd’s List

Maritime Asia

April/May 08, p 34

GREEN PASSPORT: Typical OOCL ships are designed with environmental efficiency in mind

The international shipping industry is strongly of the view that a holistic approach should be adopted addressing the environmental challenges that face shipping since measures addressing only one emission may have effects on others which can have an adverse impact on the environment.

+Measures should be agreed internationally to ensure consistency and regulation must focus on a relative reduction with the view to continuously improve the efficiency of the emissions from individual ships and recognise that absolution reduction objectives are not necessarily within reach given the growth in world trade.

+Regulation must ensure the free choice of methods to reduce CO2 emissions, for example using goal-based standards that will promote innovation and cost effective solutions.

Proposed revision of MARPOL Annex VI

+At the meeting earlier this year of the IMO Maritime Environment Protection Committee (MEPC) there was a real breakthrough by the international community in its efforts to slash up to 90% of the shipping industry’s emissions. It reached an historic, unanimous decision to further reduce sulphur levels in the fuel used by ships. The main changes of progressive reduction in sulphur oxide (SOx) content of fuel with the global sulphur cap reduced to 3.5% (currently 4.5%) from 2012 down to .05% from 2020, subject to a feasibility review to be completed by 2018 which allows time for the issues surrounding availability of the new cleaner marine fuel to be addressed. (The new marine fuel quality standards are likely to be ratified at the October meeting this year of the MEPC.)

Proposed revision of MARPOL Annex VI

+ A circular on the verification of sulphur content in fuel was also approved and the ISO will be invited to develop a fuel/oil specification.

+ The limits in sulphur emission controlled areas (SECAs) will be reduced to 1.00% in 2010 (currently 1.50%) and a further reduction to 0.10% from 2015. Currently two SECAs are designated: the Baltic Sea and the North Sea Area.

+ There was a recommendation from BIMCO for micro SECAs be considered whereby contracting parties would apply these reduced sulphur levels at so many nautical miles from the coast. This was not proceeded with but there is a concern that some countries that cannot achieve designation of a SECA may apply national standards that are stricter then the international standards which would be detrimental to all concerned.

+ There will be a progressive reduction in nitrogen oxide (NOx) emissions for marine engines to which the current Annex applies.

Proposed revision of MARPOL Annex VI

+ For engines constructed on or after 1/1/2000 a three tier structural operates with tier I being diesel engines installed on a ship constructed prior to 1/1/2011 applying the current standard in Annex VI (17g/kWh).

+ Tier II for a diesel engine installed on a ship on or after 1/1/2011 reduced to 14g/kWh

+ Tier III for a diesel engine installed on a ship on or after 1/1/2016 reduced to 3.4g/kWh operating in SECAs. (These areas may be designated for SOx or Particulate Matter or NOx or all three types of emissions from ships)

+ Importantly for NOx emission standards for existing engines built between 1/1/1990 and 1/1/2000 the 17g/kWh will apply if there is a power output of more than 5,000 kW and a displacement per cylinder at or above 90 litres.

Proposed revision of MARPOL Annex VI

Greenhouse gas emissions

+ MEPC has continued working towards the development of measures to reduce greenhouse gas emissions (GHG) from ships. Australia and Norway co-sponsored a correspondence group on GHG that reported to MEPC 57 and the aim is to complete a carbon dioxide emission indexing

scheme and a CO2 emission baseline by the next MEPC. An inter-

sessional meeting and the correspondence group will progress this complex work.

+ MEPC 57 agreed to a basic approval for four ballast water management systems and final approval to one ballast water management system that makes use of active substances.

+ Delegates will be aware of the debate in Australia over a national ballast water system that includes domestic ballast water carried inter or intra-State as from 1 July 2009. This date must be doubtful particularly bringing all jurisdictions under the one system at one time as a result of mutual agreement on the proclamation date.

+ Victoria has already introduced its own State-based ballast water management system with different costs and reporting requirements from the national system and the question of whether inspectors will be operating under uniform national conditions or whether they will be the AQIS inspectors has yet to be resolved.

+ Nevertheless, a new Inter-Governmental Agreement which now includes New South Wales has been signed and AQIS is seeking advice from the States on what would be required to have a national inspection system if they were to provide it which is a positive move.

Ballast water management

+ Cost recovery requires further clarification and there is a subgroup meeting on that as are groups monitoring specified pests in 18 ports including Townsville. This is vital to create the baseline and populate the database for the Ballast Water Management Unit which it is hoped will control the national system.

+ To give you a better feel for the debate there has been lengthy discussions over whether the inspector phones the Ballast Water Management Unit first or notifies his superior officer in the State jurisdiction if a vessel looks like failing the inspection.

+ It has been agreed to determine whether it is feasible to have national ballast water plans on vessels prior to the international convention entering into force which would then make them mandatory.

+ The new international ballast water convention (D2) was to apply to ships built in 2009 but the IMO Assembly late last year agreed it would only apply to such vessels after their second annual survey but no later then 31/12/2011.

Ballast water management

+ A new regime was to be introduced 1 July this year but that implementation date has been deferred until later in the year.

+ Any exotic pests identified on vessel hulls will need to be cleaned in an environmentally safe way and the shipping industry has urged the review of the ANZ Standard on in-water cleaning particularly for relatively small infestations.

+ Large freight vessels and cruise ships are considered low risk but nevertheless there remains the issue of what to do with them if their hulls are found to be fouled with exotic pests.

+ A major focus has been on non-trading vessels; some of which are considered high risk.

Bio-hull fouling

Photo: Australian Quarantine Inspection Service

+ The term cold ironing was popularised years ago when the US were moth balling warships and using shore based power to maintain critical idle equipment although it originally came from the days when steamships boilers went cold when they were in port for some time.

+ Many ports now provide cold ironing facilities eg. Seattle, New York, Los Angeles, Long Beach, Florida, San Francisco, Vancouver, Gothenburg and even Juneau in Alaska.

+ This measure could, depending on the power source, lead to a decrease in GHG emissions but work is already underway within the ISO and the International Electro Technical Committee (at IMO’s request) to develop international standards for onshore power supply to ships.

+ Consideration needs to be given to the costs, effectiveness, technical standards for high voltage onshore power supplies and possible increased emissions from the onshore power plant.

Alternative marine power

+ There has been some Scandinavian research that shows external emission costs of onboard power generation are much higher then total direct costs of electricity from shore based power connection. Cost estimates vary but a reasonable level of utilisation by vessels is required to cover that capital cost for both the shore facility and on the vessels.

+ A number of lines have introduced new systems and technologies that are claimed to make cold ironing more cost effective.

+ In one case the container has been modified and fitted with a shore side power unit and positioned in a corner of the vessel and when it berths power is taken from the shore facility.

Alternative marine power

+ Another line has developed a system that allows a high voltage shore based electrical cable to be plugged into a vessel’s bow thrusters circuit which in turn connects through to the ship’s main switchboard.

+ In Australia, we operate on 50 hertz and not 60 hertz as in most countries in the world and thus a converter (cost around $1 million) would be required.

+ LA port estimated that depending on the size of the ship, cold ironing will reduce NOx by 1 tonne and take more then half a tonne of SOx out of the air each day the vessel is at berth and plugged in.

Alternative marine power

+ 24 March 08, Long Beach and LA harbour commissioners approved an incentive programme aimed at accelerating cargo vessel operators use of cleaner burning fuel when transiting within 40 nautical miles of the San Pedro Bay.

+ Port have earmarked almost $90 million for the next twelve months to pay the difference between the price of bunker fuel and more costly lower sulphur diesel fuel available for vessel operators who make the fuel switch at least 20 nautical miles out.

+ Vessels will also be required to use low sulphur fuel in their ancillary engines while at berth in the port complex.

+ To qualify ships must participate in the port’s voluntary vessel speed reduction programme limiting speeds to 12 knots on approach to the port.

+ The scheme could be extended beyond 30 June 2009.

+ Will Australian ports follow suit?

US goes even further

+ National Plan Management Committee currently considering this issue of importance to both shipping industry and ports.

+ Granting access to places of refuge can involve decisions on a case by case basis with a balance being achieved in the advantages for the affected ship and the environment resulting from bringing the ship into a place of refuge and the risk to the environment resulting from that ship being near the coast (IMO A23/Reg 949, para 1.7).

+ Within internal waters ie 3 nautical miles generally a place of refuge request will be granted by the relevant State/Territory Government agency and outside that limit to the Australian EEZ, AMSA in consultation with GBRMPA – however when MERCOM has taken action under AMSA’s powers of intervention, a place of refuge request may be dealt with in any Australian maritime zone.

+ There are no designated areas or places of refuge but it is a strong recommendation of SAL that potential areas that could be used depending on the circumstances of each individual case should be identified as potentially places of refuge to expedite the approval process in the event of an emergency.

Requests for a place of refuge

+ A code of practice has been developed by the IMO to provide guidance to shipowners, masters, shippers, operators, bulk carriers, charters and terminal operators for the safe handling, loading and unloading of solid bulk cargoes.

+ Effectively implemented by AMSA under Marine Orders 34, Solid Bulk Cargoes Issue 6 Compilation number 1 (December 2007).

+ Provides that at least 48 hours before commencing to load, the operator, the master and agent of the ship must furnish the surveyor at the AMSA office at the nearest port of loading, signed notice containing details of vessel and importantly cargo information including density of the cargo.

+ A surveyor may at any time inspect the ship loading to ensure compliance and prior to the loading, the master must demonstrate by appropriate means to a surveyor, that the allowable shear forces and bending movements will not be exceeded during loading etc.

Safe loading and unloading of bulk carriers

Safe loading and unloading of bulk carriers

+ The manager, ship inspector may prohibit the loading of the cargo if the above has not been complied with.

+ Marine Orders 35 also sets out additional safety measures for bulk carriers (July 2006) that makes particular reference to the implementation of relevant international Conventions and Resolutions.

+ This underlines the importance that clearly both ports and ship operators place on ensuring that stresses on the hull of the ship will not eventually lead to catastrophic failure.

+ As you will see, both ship operators and regional ports share a great interest in the environment and it is important to be kept appraised of international developments in this respect.

+ Serious challenges will face regional ports in the future regarding not only the implementation of future IMO regulations but importantly how Australia will react and implement the relevant Convention eg. in terms of:

micro SECAs,

provision of facilities for cold ironing

Ensuring domestic ballast water management systems are complied with

Enforcing the new bio-hull fouling regime

Coping with a future carbon trading scheme and how that impacts on shipping (eg. it is our understanding that facilities will have to report on carbon outputs)

There is the impact of other environmental implications such as being ready to provide places of refuge and have a full understanding of MERCOM powers.

Conclusion

+ Meeting these challenges will require a high degree of consultation, communication and knowledge of evolution of the environmental debate.

+ Importantly practices and standards designed to limit the impact of company operations on the environment should not be implemented in isolation but should be closely linked with other operating standards, including standards of safe navigation and safety of life and trade facilitation.

+ Our ability to cope is directly reliant upon our ability and capacity to co-operate collectively and achieve practical outcomes.

Conclusion