| 1 | 1 REDUCING THE IMPACT OF SHIPPING ON THE ENVIRONMENT DECARBONISATION

| 2 Traffic Pattern of International Shipping IMO source

| 3 Priorities of EU maritime safety & protection of the environment. EU adopted measures to eliminate sub-standards shipping and ensure high quality standards for ships flying an EU Member State flag and ships calling at EU ports. Europe is extremely exposed to pollution due to the intensity of the traffic. Two priorities » Reduce accident at sea » Reduce environmental pollution

| 4 Reducing operational pollution from ships. Reducing operational pollution at sea – emissions at sea » Illegal discharges at sea through adequate port reception facilities for Marpol Annexes I, II, IV, V » Ballast Water Management Convention. Reducing operational pollution in the atmosphere – air emissions (Marpol Annex VI) » Sulphur emission » Other emissions (Nox and PM)

| 5 Reducing Greenhouse Gas emissions - GHG. The European Community has made a firm commitment to reduce the overall greenhouse gas emissions of the Community by at least 20% below 1990 levels by 2020 (30% if other commits or contribute adequately). International maritime transport is not covered by the commitment. The EU agreed to negotiate an international agreement on climate change with a -20% below 2005 by Discussions in the framework of the Climate Change Convention and the Kyoto Protocol are ongoing (COP16/2010 in Cancun and COP 17/2011 South Africa)

| 6 Reducing greenhouse gas emissions. General agreement that shipping should contribute to GHG reductions. EU favour global measures to be developed by IMO. Measures should be adapted to the specificities of shipping, flag neutral, avoid competition distortion and carbon evasion/leakage. EU supports the work of the IMO on the development of a package of technical, operational and market based measures to reduce GHG emissions from ships. European Commission is preparing measures which could be developed in line with IMO action or regionally if no IMO measures agreed by 2011

| 7 Reducing greenhouse gas emissions. Ensuring a sustainable future for maritime transport » Maritime transport energy consumption and GHG emissions are increasing » GHG emission growth rate is between 2 to 3% for the period up to 2030 » Technologies and procedures are available to significantly reduce emissions at very reasonable costs

| 8 Reducing greenhouse gas emissions. Technical and operational measures available » Operational measures Slow steaming Voyage optimisation with weather routeing, just on time arrival, ballast operations Energy management such as savings from auxiliary powers, engine maintenance, cleaning of the hull and propellers » Technical measures Optimisation of the behaviour of the hull Propeller efficiency Recovering energy from propeller

| 9 Reducing greenhouse gas emissions. Developing a Market Based Instrument » IMO is examining several options An Emission Trading Scheme A International GHG fund based on a levy on bunker fuel A measure combining elements of a market based instrument (trading of efficiency credit) with the use of mandatory efficiency standards » The European Commission has also made a study on the options available » No decision has been taken yat on the system to be developed at EU level

| 10 Reducing greenhouse gas emissions. Future work in IMO » MEPC 60: March 2010 Concentrate on the technical and operational measures » MEPC 61: 27 September-1October 2010 Based on a study to be carried out prior to MEPC 61, indicate which market-based measure IMO could evaluate further and identify the elements that could be included in such a measure » MEPC 62: July 2011 Report on progress on the development of a MBI measure

| 11 Reducing air emissions (Marpol Annex VI). MARPOL Annex VI: Adopted in 1997, in force in May 2005 (54 contracting Parties – % GT). Ratification by most EU Member States. Revision of the requirements adopted in Objectives » Reducing sulphur content of marine fuel » Environmental & health impacts of ship Sulphur emission (SO2) » Acid deposition » Poor air quality

| 12 Reducing air emissions (Marpol Annex VI). Marpol Annex VI current requirements » a global cap for the sulphur content of marine bunker fuels of 4.5% » Sulphur Emission Control Areas (SECAs) which restrict the sulphur content of marine fuels to 1.5% Baltic Sea (implemented in the EU - 11 August 2006) North Sea & English Channel (implemented in EU - 11 August 2007)

| 13 Reducing air emissions (Marpol Annex VI). EU actions » Directive 2005/33/EC on sulphur content of marine fuels replicates the provisions of MARPOL Annex VI in EU legislation » EU ports : a maximum sulphur content of 0.1% for fuels burned whilst at berth in port from 1 January 2010 Recommendation on the safe implementation on the use of low sulphur fuel by ships at berth adopted on 21 December 2009 » Recommendation on the use of shore side electricity by ships at berth

| 14 Reducing air emissions (Marpol Annex VI). Revision of Marpol Annex VI » In line with EU policies - Thematic Strategy on air pollution » MEPC 58 adopted a progressive approach for reduction A global cap of sulphur level to be reduced to 3.5% by 2012 and 0.5% by 2020 (or 2025 if suitable fuel is not available in 2020) In SECAs by 2010 the sulphur limit of marine fuels would be reduced to 1.0% and by 2015 to 0.1% (or technological equivalent » EU should propose a modification of its legislation to be in line with the revised Marpol Annex VI in 2010

| 15 Directorate-General for Mobility and Transport Thank you for your attention