The INTERTANKO option for the revision of Annex VI - IMO regulation for the Prevention of Air Pollution from ships by [email protected] Manager.

The INTERTANKO option for the revision of Annex VI - IMO regulation for the

Prevention of Air Pollution from shipsby

[email protected] Research and Projects

CMAC NATIONAL MEETING Ottawa 5 November 2007

‘

Shipping and the environment

INTERTANKOfor safe transportation, cleaner seas and free competition

Accidental oil pollution into the sea

Source: ITOPF/Fearnleys

10001000ts spiltts spilt

bn bn tonne-mtonne-m

0

400

800

1,200

1,600

1971-76 1977-82 1983-88 1989-94 1995-00 2001-06

0

17,000

34,000

51,000

68,000

Accidental pollution

Tonne-miles

Source: ITOPF spills, Fearnleys: Tonne miles

+97% -52 % +50 %

-26%-80%

Percentages refers to changes compared to previous year

Shipping and the environment

• ~60,000 ships (above 400 GT)

• 7,507,000,000 ts goods / year

• average distance 4,400 miles

• >90% of total world trade

• Consumes 9% of world oil

• CO2 emission share < 1/2 oil consumption share Simple infrastructure

• Economics of scale: One VLCC = 8,000 tank trucks

• 1 ltr of fuel on a modern Very Large Crude Carrier moves 1 tonne of cargo >

2,800 km

but

Trends – Co2 emission, energy use, global trade

Source: Fearnleys/INTERTANKO

IndexIndex

90

100

110

120

130

140

150

160

170

180

1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004

CO2 emission

Energy use

Population

Seaborne trade

Shipping and the environment

Fuelled by the dirtiest part of the barrelresulting in emission of:• SOx• NOx• uncombusted hydrocarbon• Heavy metals• Soot

Reducing harmful emissions from ships

• Onboard abatement technology– Scrubbers, filters, separators, catalysts

• SECAs/NECAs– Sulphur/Nitrogen Emission Control Areas

• Type and quality of fuel – Heavy fuel oil = a blending of refinery residues and

distillate (up to 30% dist.)– Distillates = gasoil and diesel

The world is moving away from HFOOil consumption by product - % share

12%

17%

22%

27%

32%

37%19

65

1967

1969

1971

1973

1975

1977

1979

1981

1983

1985

1987

1989

1991

1993

1995

1997

1999

2001

2003

2005

25

37

49

61

73

85

Middle/heavy distillates

Fuel oil

Total

Source: INTERTANKO/BP Review

% share mbd

Refineries are moving away from HFO

• The new line at Neste’s Porvoo refinery will use residue oil to produce 1 m ts per year sulphur-free, clean motor fuels, particularly diesel fuel.

• The fuel will meet the latest environmental requirements in Europe and N America. The refinery will be capable of considerably increasing the refining of very profitable products, such as sulphur-free diesel fuel.

Refineries are moving away from HFO

• ……..company’s early commitment in the mid-1990s to making cleaner fuels, and by being proactive about finding the technology needed to achieve this.

Refineries are moving away from HFO

Residue upgrading benefits both the refinery and the community:• “Enhance financial performance• Eliminate high sulphur fuel projects• Replace obsolete utility faculties• Meet future product specifications• Reduce total refinery emission• Provide cost-effective H2 production based on converting residue• Produce power for refinery use and export • Increase feedstock flexibility – chance to use low-cost crude oils.• Secure or even expand and business opportunities”

Dr. Joachim Wolff: license and service manager for liquid and gas gasification for Shell Global Solutions. PhD from university of Dresden in thermodynamics.Piete Zuideveld: departmental manager of the gasification and hydrogen manufacturing technical department in Shell Global Solutions. Working for Shell for 27 years and has experience in gasification, gas treating, gas to liquids and gas business development.

Source: http://www.shell.com/home/content/globalsolutions-en/knowledge_centre/pres_speeches_papers/2006/refinery_residuals_010206.html

Enhance financial performance reduce emission

more business opportunities

Shipping needs INTERTANKO seeks

• Significant reduction of harmful emission

• Long-term, predictable and solid IMO standards

• A feasible, realistic and sustainable solution

• No unilateral nor regional regulations

Why not scrubbers?Why not scrubbers?

• Still under testing (2 ship limited scale)

• Large • Expensive• Difficult (impossible?) to install• CO2 emission (buffering effect)• Leaves hazardous waste• Waste disposal – no-one wants it• Tonnes of seawater need to be processed/added

We are involved in transportation – not waste treatment

Why not SECAs?Why not SECAs?

• Air pollution knows no borders• Most ships operate close to shore • International shipping needs global regulations • Switching fuels – a safety problem• More SECAs on the way- and more problems

Sulphur Emission Control Areas, the Baltic and the North Sea

• LSFO availability “ ..refineries have a clear incentive for further conversion of its entire residual streams to distillate products compared to residue desulphurisation to produce more LSFO” (CONCAWE)

May 2006

Nov 2007

SECASConfusions, Complexities,

Criminalisation ?

Why switching to distillates? Why switching to distillates?

A simple solution :

1. Significant global reduction of emission• SOx, - 60 - 80%, • PM, - 80 - 90%, • NOx, - 15%, • No heavy metals, • Less soot

2. A more healthy environment for crew and dockworkers

3. No onboard waste4. Reduces overall fuel consumption

(and CO2)5. Better and easier control or

monitoring of ships

Cleaner, Simpler and more Efficient ships

Why switching to distillates? Why switching to distillates?

• ..continue:

6. Fewer engine breakdowns and potential pollution accidents

7. Less pollution when spilled8. Provides opportunity for the

development of more efficient engines (w. less emission)

9. Applies to all ships and all current engines10. No safety problem in connection

with switching fuels

Cleaner, Simpler and more Efficient ships

Switching to distillates CO2 balance

• +CO2 emission when continuing to burn HFO:• buffering from scrubbers• higher fuel consumption NOx control• running of scrubbers• heating of HFO• burning handling of waste• running of abatement equipment

• +CO2 emission when burning distillates:• conversion of HFO to distillates - which may be balanced by increased power production • construction of conversion plants• handling of waste from conversion plants• less fuel consumption

Status

• IMO Group of Experts – report end 2007• Basic data needed• Status quo- fleet, emission• Costs - investment in refinery upgrading, scrubbers• Costs to the environment and society – pollution, health

• Council’s conclusion –2008

U.S. considers own legislation if the IMO does not deliver

IMO Group of Experts will provide figures and need input

INTERTANKO: a long-term practicable measure to reduce emission necessary

Shipping is energy efficient - but burning the dirtiest part of the barrel causes pollution

The oil industry is moving towards cleaner fuels

There are 10 good reasons for switching to distillates

Large investments necessary over a prolonged period - no matter the solution

The costs involved are the costs to the society which will mainly be the impact on the environment (cost effect of increased freight will be marginal)

Cleaner shipping

Bunker price

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