MARITIME
Environmental regulations – what is new for shipowners? SMM - September 2016
Eirik Nyhus - Director, Environment September 2016
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CONTENTS
INTRO
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REGULATORY UPDATE
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SUMMARY
Timeline towards 2030 Adopted
US BW requirements
EU Recycling Regulation
EEDI phase 1
EEDI phase 2
0.1% ECA sulphur limit
NOx tier III for new builds in North America
2015
EU CO2 monitoring, reporting and verification
2016
2018 Ballast Water Convention - entry into force
EU recycling effective
EU 0.5% sulphur cap 2020
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2025
Operational requirements to CO2 emissions
BC, noise, biofouling and VOC regulated?
Additional ECAs established
0.5% global sulphur cap
IMO fuel monitoring, reporting and verification 0.5% global sulphur cap
In the pipeline, or possible…
EEDI phase 3
2030
EEDI phase 4?
Carbon pricing / MBM HK Recycling convention ratified?
CONTENTS
INTRO
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SUMMARY
SOx
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Sulphur emission regulations
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Global 0.5% sulphur limit in 2020 or 2025? Fuel Availability Study forming decision basis – Agreed at MEPC68, partially shaped by political concerns… (Steering Committee established - 20 members) – Consortium awarded contract, report to be considered by MEPC 70 (Oct. 2016) – Independent industry report with differing conclusions also submitted to MEPC 70
“Agreement in principle” on making decision at MEPC 70, likely to slide to MEPC 71
Seems to be an increasing likelihood of agreement on 2020, based on; – signals from refinery sector – signals from industry – experience from ECA 0.1% entry into force
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EU Sulphur Directive issues Revised Directive sought alignment with MARPOL Annex VI, but there are crucial differences; – Covers ships “within EU waters” – 0.1% at berth and in inland waterways – 0.5% in EU EEZ waters in 2020
Future actions and consequences – Enforcement increasingly stringent – Implications of possible IMO delay uncertain. Shipping lanes in 2020? Safety and environmental implications? – Acceptability of open loop scrubber discharge in doubt (e.g. Germany, Belgium), Water Framework Directive creating complications
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Sulphur limits in Chinese waters
Hong Kong/Guangzhou
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Shanghai
Tianjin/Dalian/Sea of Bohai
Impact:
Outcome:
April 2016: 4 ports voluntarily impose 0.5% sulphur limit; January 2017: Mandatory 0.5% S limit for core ports in areas January 2018: Mandatory 0.5% S limit for all ports in areas January 2019: 0.5% S limit in all sea areas, may decrease to 0.1% pending decision end 2019
National Chinese regulations, applicable to all vessels in relevant areas.
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Effective 2016, increasingly stringent towards 2019
California Sulphur Regulations extended to 2018
CARB regulation extended to 2018 - Review indicatively by April 2018, regulation may then possibly be withdrawn
Scrubbers and non-distillate 0.1% compliant fuel not allowed as substitute - But temporary “Research Exemption” may be granted upon application prior to entering CA waters http://www.arb.ca.gov/ports/marinevess/ogv.htm
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Until CARB regulation is withdrawn, both MARPOL Annex VI and CARB requirements have to be complied with
NOx
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NOx emissions – MARPOL Annex VI NOx
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NECA - Baltic
NECA – North Sea
2011: NOx Tier 2, -20% 2016: NOx Tier 3, -80%*
Joint application submitted to MEPC 70
Joint application submitted to MEPC 70
* New builds, only in existing North American / U.S. Caribbean NECA. New NECAS define own date
Agreement with adoption @ MEPC 71 expected, effective 1 Jan. 2021
Agreement with adoption @ MEPC 71 expected, effective 1 Jan. 2021
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Ship recycling
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Ship recycling Hong Kong Convention on Ship Recycling – Adopted in May 2009 – Ratified by France, Norway, Congo and Belgium – Entry into force next decade at earliest, limited impact so far
EU - Ship recycling regulation – EU vessels will be required to carry an inventory of hazardous materials – Non-EU ships, when calling at EU ports will also be required to carry an inventory – Recycling requirements will apply to EU flagged ships earliest 6 months after the recycling capacity of approved yards reaching 2.5 millions LDT, and latest 2018. Yard list expected before end 2016, tonnage uncertain – Limited safeguards against reflagging prior to recycling, EC to propose mechanism in 2016 DNV GL © 2014
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Ballast water
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BWM Convention soon reaching ratification threshold Albania
Japan
Peru
Antigua & Barbuda
Jordan
Republic of Korea
Barbados
Kenya
Russian Federation
Belgium
Kiribati
Saint Kitts and Nevis
Brazil
Lebanon
Saint Lucia
Canada
Liberia
Sierra Leone
Congo
Malaysia
South Africa
Cook Islands
Maldives
Spain
Croatia
Marshall Islands
Sweden
Denmark
Mexico
Switzerland
Egypt
Mongolia
Syrian Arab Republic
Fiji
Montenegro
Tonga
France
Morocco
Trinidad & Tobago
Georgia
Netherlands
Turkey
Germany
Nigeria
Tuvalu
Ghana
Niue
Indonesia
Norway
Iran (Islamic Republic of)
Palau
34.87 % of world fleet GT – 35% needed 16
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Ratification – who’s next?
We expect ratification by Panama only after entry into force conditions have been satisfied Based on latest figures Finland will bring the GT to 35.01%, triggering entry into force – but no certainty until count is done The applicable date of compliance with D-2 standard will then be first IOPP renewal survey after entry into force, for all ships. Ships constructed after entry into force will be required to have a treatment system installed at delivery.
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In the US… USCG type approved BW systems required USCG applies same standard as IMO BWMC, but stricter system test requirements No type approved system exist yet, time limited equivalency mechanisms available (AMS and extensions) USCG has rejected use of MPN when approving UV based systems, likely significant impact on when approved systems come to market
EPA VGP; overlaps with USCG but has additional technical requirements Federal Court has decided that EPA acted “arbitrarily and capriciously” when applying BWMC standards. Worst case outcome; EPA requirements will become stricter than USCG in 2018 Significant activity (VIDA) in Congress aimed at aligning and simplifying the overlapping frameworks; outcome uncertain 18
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Vessel’s management may apply for extension of implementation schedule, ref CG-OES Policy Letter No. 13-01 found at Homeport USCG
CO2
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CO2 – regulations and policy developments EU system becoming effective in 2018 (“EU MRV”) IMO system likely becoming effective in 2019 (“Fuel consumption database”) Ships must collect voyage data under both systems, allowing for monitoring, reporting and verification of CO2 emissions and vessel efficiency data Similarities, but also significant differences between systems, with technical, commercial and enforcement implications. EU MRV close to finalisation, IMO system in progress
Key question for industry – will systems be harmonised? – Politically difficult both inside EU and in the IMO – Several years of overlapping systems expected
Additionally, discussions on long term targets and possible carbon pricing restarting due to Paris Climate Agreement – Decisions will have major long-term implications – Reaching consensus more than a little challenging 20
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EU MRV - The essentials Ships above 5000 GT (all flags) have to annually report CO2 emission on voyages to, from and between EU ports 4 ways of measuring fuel consumption Extensive reporting, including distance sailed, time at sea, transport work and efficiency data (e.g. CO2 per tonne-nm) All ships to submit reporting plans by August 31 2017, monitoring starts January 1 2018 Verified emission reports to be submitted to EC by April 30 2019, EC to make aggregated data public by June 30 2019 Practical implementation and verification details in progress, work at EC advisory body ESSF extended to summer 2017. Commission to decide and formally publish all legal text by end-2016 based on published drafts. Complex and rigorous mechanism; additional guidelines needed and to be drafted by ESSF Seen by the EU as a step towards a global IMO MRV system
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Towards 2030?
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Regulations on the horizon? Hull bio-fouling –
Present focus is on ballast water
Particles (PM), “Black Carbon” –
Increasing EU focus indicated
Underwater noise –
Driven by NGO concern for cetaceans
Regulations conceivably agreed within the next decade or so; effective some time later. PM regulations expected first, limited to selected EU waters
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REGULATORY UPDATE
INTRO
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SUMMARY
Wrapping up 1. CO2 MRV for the EU in 2018. IMO fuel consumption reporting expected in 2019. Dual reporting systems for some years. CO2 pricing maybe in the early/mid 2020’s 2. Global sulphur 0.5% likely in 2020 – but note EU waters in 2020 if IMO delays until 2025 3. NECA (NOx) Tier III requirements in North American waters from 2016, North Sea and Baltic likely from 2021 4. Additional ECAs possible this decade – e.g. China 5. EU recycling requirements entering into force soon – impact remains unclear. HKC has limited impact 6. Ballast water management convention expected to reach ratification threshold very soon – but technical uncertainties remain 7. US Ballast water situation remains complex – but expect extension policy to become stricter once Type Approved systems become available 8. Long term – keep an eye on PM in the EU 25
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Thank you!
Eirik Nyhus – Director, Environment
[email protected] +47 926 23 818
www.dnvgl.com
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