MARPOL ANNEX VI AMENDMENTS PRACTICAL CONSEQUENCES Tripartite Meeting Beijing CCS Headquarters November 8/9, 2008

AMEDMENTS New regulation on SOx and PM Primary compliance through fuel Alternative methodologies (e.g. scrubbers) accepted as Equivalent Measures (first to be approved by Administrations) Marine fuel oil quality to be further improved No measures on ships that do not receive adequate supply if BDN data is challenged by PSC or test results - Guidelines how to assess compliance NOx Tier I on large engines from the 1990s NOx Tier II and Tier III on new engines

GENERAL ASSESSMENT OF THE AMENDMENTS Long term predictable regulations Global reduction of ship air emissions Challenging but Realistic and Feasible BUT practical consequences need to be carefully assessed

FUEL-SULPHUR CONTENT 4

MORE ECAs (?)   Planned new ECA for 2013   Could be extended to entire N. A.   Up to 200 nm on the West Coast   Plan to require 0.1% or 0.2% S fuels

FUEL CHANGE OVER OPERATION Ships may use 2 or 3 fuel types/voyage Need for greater and diversified (segregation) of bunker tanks & pipelines to operate 3 different grades of bunkers If not, long time fuel change over period with loss of expensive grade bunkers Need for 2 or 3 differing cylinder lube oil systems

FUEL CHANGE OVER OPERATION

Risk of incompatibility between differing grades of bunker during change over Increased average density Fuels with reduced ignition/combustion quality Increased problems with chemical waste (liquid waste with low/no sulphur used as blend to “make” the LSFO) Increase in average cat fines level (Al+Si)

LOW-SULPHUR FUEL OPERATION Source: DNVPS database of 1,012 analysis results (from 1 October – 10 November 2007) A reduction of the low-sulphur content in HFO has seen a corresponding increase in the abrasives content

FUEL OIL QUALITY IMO Secretariat invited ISO to consider a revision of a marine fuel oil specification (ISO 8217) addressing : -air quality, -ship safety, -engine performance, -crew health with recommendations for future consideration by the IMO

possible PRACTICAL CONSEQUENCES Better Fuel Quality in a new ISO 8217 ISO is an industry standard IMO to decide on its enforcement Ship operators could share experience with Flags and demand assistance Would all this accelerate the transit back to simpler and safer uni-fuel operation on world wide basis?

ENFORCEMENT (PSC & Flag) (today’s practice) Most PSC target controls on: –Bunker Delivery Note (BDN) –Availability of the MARPOL fuel sample –fuel change-over recordings in log books (ships need written fuel change-over procedures) Some PSC: – requires to see commercial fuel test reports and make a decision –take fuel samples from service tanks ADVICE: only the MARPOL fuel sample is to be used to test sulphur level

ENFORCEMENT (PSC & Flag) (today’s practice) Many Flags do not respond to ship Notifications on non-compliant fuel delivery Not unified interpretation for sulphur content limit, e.g.: 1.50%, 1.54%, 1.58%.... However, ships may not be liable if records & evidence on Fuel Availability are strictly maintained

REVISED REGULATION 18 Authorities shall take all reasonable steps to promote the availability of fuel oils to comply with Annex VI If compliant fuel not available, ships not required to delay departure or deviate from the planned voyage The ship will have to notify its Administration and the relevant port of call each time it cannot find the compliant fuel The ship should present evidence/record it attempted to buy the compliant fuel in accordance with the voyage plan If evidence is provided, there should be no measures against the ship

REVISED REGULATION 18 Evidence/records/actions taken by ships: (a) (a) Bunker quotation/correspondence (b) (b) Voyage plan (c) (c) Bunker Delivery Note (BDN) (d) (d) Fuel Quality Test report (e) (e) Notification to Flag, Port Authority & PSC (f) (f) Report/indication that obtaining compliant fuel will cause deviation/or undue delay

REVISED REGULATION 4 EQUIVALENT MEASURES An Administration may allow any alternative method only if this is at least as effective in terms of emission reduction as the emission reduction by using LSFO This means the Administration (and not the ship) has to acknowledge the alternative methods: –have equivalent efficiency in terms of SOx, PM & NOx –do not harm the environment –operate within the requirements of the IMO guidelines

NOx EMISSIONS – UPGRADE ON PRE-2000 ENGINES Retroactive measures on engines: –installed onboard ships constructed between 1 Jan 1990 and 31 Dec 1999 –power output > 5,000 kW; and –per cylinder displacement at or > 90 litres NOx emissions at Tier I level If the engine already meets Tier I NOx emission limits, simple certification is sufficient One time certification (?)

NOx EMISSIONS – UPGRADE ON PRE-2000 ENGINES If the engine does not meet the Tier I NOx emission limitations, it is subject to measures: –ONLY if there is an upgrading system certified by a Party to MARPOL Annex VI –ONLY if it certifies that such a system reduces the emissions of that particular engine to Tier I limits –the upgrading system is considered commercially available 12 months after a Party to MARPOL Annex VI deposits the notification on certification to IMO –upgrade at the ship’s first renewal survey after the upgrading system becomes commercially available –in case the upgrading system is not available at the time of completion of the renewal survey (ship owner has to document that), the flag would give an extension until the next Annual Survey –engine manufacturers concern whether can meet the numbers of bookings for existing and new engines

NOx EMISSIONS – UPGRADE ON PRE-2000 ENGINES The upgrading system should not –decrease the engine rating by more than 1%, –increase fuel consumption by more than 2% –have other adverse effect on the durability or reliability of the engine Upgrading to an acceptable cost/benefit Cost of approved method x 10**6 C e = ­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­ P(kW) x x 6000 hr/yr x 5 years x Δ NOx (g/kWh) C e < 375 SDR/metric ton of NOx reduction; SDR = Special Drawing Rights; 1 SDR = US$ Ce < $237/metric ton of NOx reduction

NOx Kits – IMO Max. Costs (US$)

NOx EMISSIONS – Tier II Applies to engines installed on ships constructed on and after 1 January 2011 Tier II standards (reductions related to Tier I): –15.5% reduction (engines with n<130 rpm) (i.e g/kWh) – reductions between 15.5% & 21.8% depending on the engine’s rpm (engines with 130 rpm < n < 2000 rpm) –21.8% reduction (engines n > 2000 rpm) (i.e g/kWh) Engine manufacturers developed such engines

IMO NO X Limitations Now 1 Jan Jan. 2016

23 Marine Engine Programme 2008 Tier II Compliance Source: MAN Diesel

NOx EMISSIONS – Tier III Tier III standards – 80% reductions from Tier I limits, applicable when ships in ECA only Tier III limits apply to engines: –installed on ships constructed on & after 1 Jan 2016 –power output of > 130 kW (but engines between 130 kW – 750 kW may be exempted by the Administration) Outside ECAs - Tier II limits only

PRACTICAL CONSEQUENCES Latest from engine manufacturers – possible solution through in engine technology If compliance through SCR –existing SCR technology not efficient at low engine loads –compliance might not be achieved across ECAs (i.e. close to port, through estuaries and straits ships slow down) Engine manufacturers to demonstrate compliance Class/Administration to certify BUT, in the long run, how would be Tier II compliant ships (delivered between 2011 and 2016) be treated in ECAs? Good advice: if possible, plan for Tier III compliant ships as from 2011

REGULATION 15 VOLATILE ORGANIC COMPOUNDS All tankers carrying crude oil shall have on board an approved VOC-Management Plan describing all the procedures the ship is applying in order to minimize the emissions of VOC No requirement for equipment or technical installations to limit the emissions