1. EU MARITIME CLIMATE FUND ‘insurance policy’ to address ship co2 emissions
Faig abbasov
2017

2. international shipping ranks between Germany and Japan on CO2 - up 70% since up to 250% by 2050

3. Growth in emissions if European shipping is not regulated
Source: EC, Impact Assessment, 2013

4. Paris challenge
If no action efforts of other sectors will be jeopardised making the 2°/1.5° target all but impossible to achieve

5. ~ half fuel savings in land transport will be undone by planes and ships
Source: CE Delft, 2016

6. Timeline of IMO (in)action
1997
2002
2003
2009
2011
2016
2016
2017
2023

7. EP Proposes Maritime climate fund /ets (February 15, 2017)
Shipping included in MCF/ETS only if IMO fails to deliver
Ships/operators required to join EU ETS from 2023
Scope – all ships arriving /departing EU ports – flag neutral
Derogation from ETS - join Maritime Climate Fund
Fee = at least previous year carbon price in ETS
CO2 reporting under EU MRV
Fund buys ETS allowances at auction for members
EU States rebate 20% auction revenues to Fund

8. WHY NOW? What does the fund do?
2023 deadline
Political pressure on IMO to deliver a global measure
EU “insurance policy” if IMO fails after 7 years of negotiations
What does the fund do?
Fund revenues to be used for innovative technologies for ships, SSS, ports
Market Barriers addressed:
Efficiency information becomes available
Split of incentives
Financial incentives (e.g. grants/interest free loans) to uptake ZE technologies 25/Tonne Fund revenue = €1 billion/a

9. From Regional pressure to global outcome
IMO global 0.5% S agreement from 2020
EU 0.5% S in EU seas from 2020
EU 0.1% S for ships at berth/anchorage in EU ports
EU 1.5% S for passenger ships frequenting EU ports
IMO Data Collection System (DSC)
EU ship MRV
IMO double hulls reg., yet single hull still allowed after 2015
US double hull reg., no single hull after 2015
EU bans single hulls in 2011, ahead of IMO deadline
IMO Ballast water convention (enters into force 2017)
Australia ballast water regulation under Quarantine Act 1908
New Zealand Biosecurity Act 1993
USA National Invasive Species Act
USA Nonindigenous Aquatic Nuisance Prevention & Control Act

10. Thank you

11. Costs & Savings associated with EU action
Investment, operational and carbon costs (€ bn)
Fuel savings (€ bn)
Net costs (€ bn)
Baseline
Levy on bunker fuel sales
70.8
4.8 66
Tax on emissions from consumed fuel 29
55.9
-26.9
Open ETS with full auctioning
33.5 56
-22.6
Target based compensation fund
Source: EC, Impact Assessment 2013

12. Incremental costs for consumer products
Origin
Destination
Distance
CO2 emitted for transportation
Additional costs with shipping in Maritime Climate Fund
5 €/t CO2
16 €/t CO2
36 €/t CO2
Banana
Ecuador
Holland
10464 km
22 g
0.011
€ Cents
iPad
China
Denmark
19327 km
55 g
0.0275
Grain (1 kg)
Brazil
10416 km
21 g
0.0105
Diesel (1 litre)
USA
Italy
8575 km
24 g
0.012
Calculated by T&E based on data from Danish Shipowners Association and carbon price Primes scenario

13. Short sea shipping and ZEVs
AMPERE car ferry (Norway | 2015)
1000 kWh battery = autonomy 6 crossing
▼ tonnes diesel/a
▼ tonnes CO2/a
▼ 37 tonnes NOx/a
KAROLINE fishing cutter (Norway | 2016)
12 hours autonomy - 8 h working day
Power backup – diesel generator
ELFRIDA electric boat (Norway | 2017)
100% battery – 8 h working day

14. ZEVs & Short sea Shipping potential Policy incentives
ZEVs/Hybrids mandate
(Initially) targeting operators with public service obligations
Intelligently designed ”state aid” to incentivise uptake
Concessions with ZEVs/Hybrids
Licenses given to the ”most environmentally friendly boats”
Maritime Climate Funds - CO2 charge and retrofits
Each ship contributes €X CO2/t (shipping ETS?)
Funds accrued (fully?) reinvested into the sector – grants/loans

15. costs of ETS/MCF evasion (per journey)
Full Compliance with CO2 abatement *
Full Compliance without CO2 abatement **
Evasion without transhipment ***
Evasion with transhipment ****
Route distance (nm)
4700
4966
Journey time (days)
17.3
18.3
20.5
Number of journeys (p/a) 19 18 16
CO2 under ETS scope (tonnes)
1,613
1,930
396
General investment costs
112,368 €
118,611 €
133,438 €
CO2 abatement investment costs
1,338 €
0 €
Operational costs
52,842 €
56,056 €
62,688 €
Fuel costs
475,263 €
500,000 €
506,750 €
Fuel cost savings
-77,959 €
Additional port call costs
30,056 €
30,063 €
Opportunity costs†
48,222 €
149,438 €
Carbon costs
58,079 €
69,475 €
14,254 €
Total
621,932 €
709,949 €
767,198 €
896,629 €
Source: AEA-Ricardo/EC IA, 2013 (Baltic Case Study)

16. costs of ETS/MCF evasion (annual)
Full Compliance with CO2 abatement *
Full Compliance without CO2 abatement **
Evasion without transhipment ***
Evasion with transhipment ****
Route distance
4700
4966
Journey time
17.3
18.3
20.5
Number of journeys 19 18 16
CO2 under ETS scope (tonnes)
30,647
36,670
7,128
6,336
General investment costs
2,135,000 €
CO2 abatement investment costs
25,422 €
0 €
Operational costs
1,004,000 €
1,009,000 €
1,003,000 €
Fuel costs
9,030,000 €
9,000,000 €
8,108,000 €
Fuel cost savings
-1,481,221 €
Additional port call costs
541,000 €
481,000 €
Opportunity costs†
868,000 €
2,391,000 €
Carbon costs
1,103,501 €
1,320,025 €
256,572 €
228,064 €
Total
11,816,702 €
13,489,025 €
13,809,572 €
14,346,064 €
Source: AEA-Ricardo/EC IA, 2013 (Baltic Case Study)