1. AIR EMISSIONS REGULATIONS
SOx, NOx, VOCs
Greenhouse Gases (GHG)
Monitoring, Reporting & Verification (MRV)
Technical Seminar
Busan
21 October 2013
Dragos Rauta
INTERTANKO

2. 1 Jan. 2015 0.10% IMO EU SULPHIR DIRECTIVE CARB APPLICATION DATES
GLOBAL
ECA
Jan 2010
0.10% fuel “at berth”
July 2010
1.00%
Jan. 2012
3.50%
Max. sulphur content 3.50% on supply (unless ships have scrubbers)
Aug. 2010
NA ECA
DMA max. 1.00%
DMB max. 0.50%
1 Jan. 2014
0.10% DMA
1 Jan. 2015
0.10%
1 Jan. 2020(2025)
0.50%
1 Jan no matter the result of the IMO Study

3. EMISSION CONTROL AREAS
ECA Sulphur content:
1.00% before 2015
0.10% 2015 & after
14 months to the due date
Decisions need to be made: MGO; EGCS; LNG?
If EGCS (scrubbers), time left is short!

4. Guidance to INTERTANKO Members
Emission Control Area (ECA)
SOx Requirements
Guidance to INTERTANKO Members
for the Selection of Compliance Alternatives
July 2012

5. EXHAUST GAS CLEANING SYSTEMS (scrubbers)
SOx EMISSIONS - COMPLIANCE OPTIONS
FUEL
LOW SULPHUR FUEL (0.10% S content MGO)
Some challenges
Expensive solution but a number of advantages
Availability
LIQUID NATURAL GAS (LNG)
Not realistic for most of the existing ships
New ships in the future (supply network needed)
EXHAUST GAS CLEANING SYSTEMS (scrubbers)
Performance (fit for purpose & reliability)
Rule predictability (acceptance by port authorities)
Cost – efficiency

6. FUEL CHANGE OVER CHALLENGES
Safety aspects
combustion characteristics
heat transfer and circulation
flash point
Operational aspects
fuel segregation/contamination
incompatibility - fuel filter blockages
low viscosity – leaks & loss in pressure
low lubricity - pump seizure
bio element
HAZID to avoid mechanical failure & power loss

7. FUEL CHANGE OVER - HAZID ASSESSMENTS
Capacity of Tanks
Tank Location
Mixing Tanks
Piping Systems
Trace Heating
Pumps
Burner Lance
Atomising
Boiler and Combustion Control
Flame Detection Equipment
Viscosity & Lubricity Management
Flashpoint
Sampling Procedures

8. NUMBER OF SCRUBBERS ONBOARD DIMENSIONS/VOLUME & SPACE REQUIRED
EXHAUST GAS CLEANING SYSTEMS
NUMBER OF SCRUBBERS ONBOARD
DIMENSIONS/VOLUME & SPACE REQUIRED
ADDITIONAL STORAGE (closed loop systems)
NUMBER/SIZE OF PUMPS & HYDROCYCLONS
SCR/EGCS COMPATIBILITY
APPROVAL, SURVEY & CERTIFICATION
OPERATIVE MAXIMUM SULPHUR CONTENT

9. EXHAUST GAS CLEANING SYSTEMS
ENVIRONMENTAL PERFORMANCE
wash-water acidity
amount & toxicity of solid waste
demister/removal of water droplets from the funnel gas stream
measurement & recording
SAFETY & OPERATIONS
back-pressure & turbocharger efficiency
weight, location & noise
handling caustic soda
handling toxic solid waste
MAINTENANCE & OPEX

10. in use up to 5% fuel penalty
COST- ASSESSMENT/ECA 2015
ALTERNATIVE
CAPEX
OPEX
MGO
low
premium US$350/t
up to 5% fuel saving
SCRUBBER
US$3 mil – US$8 mil
in use up to 5% fuel penalty
~ US$ 50k to 100k/ year
LNG
US$ mil
20% - 25% fuel cost saving
Different calculations according to
the trade
new buildings versus existing ships
ship’s age
financing the CAPEX
actual OPEX
repair & maintenance to be accounted for

11. ECA CALCULATOR Cost (USD) 5,840,000 Depreciation (%) 9%
ROI (Return of Investment)/Payback time (years)
Share of days in sea in ECA 5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
55%
75%
100%
Premium MGO vs HFO (USD per tonne) 50
0.0
100
120.6
25.2
150
624.0
90.4
48.7
17.1
9.5
200
135.5
50.0
30.6
22.1
17.3
9.2
5.8
250
2146.6
61.5
31.2
20.9
15.7
12.6
10.5
6.3
4.2
300
53.1
26.5
17.6
13.2
10.6
8.8
7.5
4.8
3.3
350
66.6
26.9
16.9
12.3
9.7
8.0
6.8
5.9
3.9
2.7
400
204.9
33.1
18.0
12.4
9.4
7.6
6.4
5.5
3.2
2.3
450
59.2
22.0
13.5
9.8
5.3
4.6
4.1
2.8
2.0
500
34.6
16.5
10.8
8.1
4.0
3.5
2.4
1.8
550
164.8
24.5
9.0
6.9
3.1
2.2
1.6
Cost (USD)
5,840,000
Depreciation (%) 9%
Daily consumption (t)
22.8
Days at sea/year
335
Voyages/year 30
Fuel/discharge (t) 10
HFO cost
650
A simple example to assess MGO vs. EGCS
OPEX, maintenance and repairs costs not included

12. ECA CALCULATOR Cost (USD) 4,000,000 Depreciation (%) 9%
ROI (Return of Investment)/Payback time (years)
Share of days in sea in ECA 5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
55%
75%
100%
Premium MGO vs HFO (USD per tonne) 50
0.0
317.2
100
131.5
59.6
18.7
10.1
150
432.9
62.0
33.4
22.9
17.4
14.0
7.9
5.1
200
65.4
29.6
19.2
14.2
11.2
9.3
5.0
3.4
250
52.6
23.8
15.3
11.3
9.0
7.4
6.4
5.5
3.7
2.6
300
74.3
24.3
14.5
10.4
8.0
6.6
5.6
4.8
4.3
2.9
2.1
350
32.3
15.8
10.5
7.8
6.2
5.2
4.4
3.9
3.5
2.4
1.7
400
86.5
20.6
11.7
8.2
6.3
3.3
2.0
1.5
450
40.9
15.1
6.7
3.6
3.2
2.8
2.5
1.8
1.3
500
26.8
12.0
7.7
5.7
4.5
2.2
1.6
1.2
550
19.9
9.9
4.9
1.4
1.0
Cost (USD)
4,000,000
Depreciation (%) 9%
Daily consumption (t)
22.8
Days at sea/year
335
Voyages/year 30
Fuel/discharge (t) 10
HFO cost
650
A simple example to assess MGO vs. EGCS
OPEX, maintenance and repairs costs not included

13. NOx Tier III EMISSIONS - IMO
Initially applying to ships built from 1 Jan but . .
Study first to consider availability of technology
IMO Study recommended maintaining 1 Jan. 2016
Russian Federation, supported by majority disagreed
Amendment to delay the enforcement to 1 Jan and a new study prior to the new date
Parties to MARPOL Annex VI will consider adoption of the amendment at MEPC 66 (April 2014)

14. NOx Tier III EMISSIONS - Regional
NOx Tier III Application in North American NECA?
EU Commission proposed a Decision establishing an EU wide position on the Baltic Sea NECA
EU Council / Member States rejected the proposal
EU has not gained “competence” on NOx emissions (ref. declaring Baltic Sea and North Sea as NECAs)
HELCOM may however declare the Baltic Sea as NECA
North Sea?

15. NOx Tier III EMISSIONS Issues presented by Russian Federation:
SCRs (selective catalytic reducers)
- ammonia slip
- use of urea generates as much CO2 (t) as NOx (t) reduction
- do not fit with scrubbers
ammonia/urea supply and costs
used catalyst disposal
- CAPEX: €6 mill for a 20k DWT ship (return years)
EGR (exhaust gas recirculation) – IMO study not conclusive on EGR reliability
LNG not a viable solution yet

16. GREENHOUS GAS EMISSIONS EEDI SEEMP/EEOI – INTERTANKO Guide
Market Based Measures (MBMs)
Monitoring, Reporting and Verification (MRV)
VOC

17. EEDI – Already in force – More efficient new buildings
STATUS ON GHG EMISSIONS REDUCTION REGULATIONS
EEDI – Already in force – More efficient new buildings
SEEMP is successfully implemented
Major activity: saving fuel!
- Monitoring
- Physical improvements to ships
- Operational improvements
- Speed management
EEOI could be improved further by maximising cargo volume utilisation and by better logistics
Market Based Measures – side tracked at IMO
INTERTANKO position: MBMs are not justified at this time

18. % Difference (2007 base year)
RESULTS
YEAR
EEOI (MT)
% Difference (2007 base year)
Count of Fixtures
Average Cargo Carried
Average
dwt Available
Average Miles
Miles pr MT IFO
2007
19,034
462
31.544
38.775
2.131
5,18
2008
17,431
8,42%
631
33.274
40.859
2.190
5,29
2009
15,503
18,55%
554
33.805
42.167
2.602
5,72
2010
16,976
10,81%
581
32.510
40.939
2.201
5,86
2011
16,502
13,30%
647
31.950
42.156
2.111
6,07

19. RESULTS
Yearly improvement (Index 2007) % % % %

20. Data on 2010; 2011; 2012 from:
VLCCs 31
Suezmaxes 36
Aframaxes 43
LRs 4
Product 22
Chemical 11

21. OPERATIONAL EFFICIENCY
New initiative – Operational Efficiency (ships in operation)
Promoters: USA, Japan, EU and Germany
Data collection to determine the baseline Fuel consumption Cargo mass Voyage info, i.e. distance, sea state, weather, etc.
Trial period to establish practical rating system Establish, verify and adjust baseline
Required operational efficiency scheme
Mandated through amendments to MARPOL Annex VI

22. OPERATIONAL EFFICIENCY
EUROPEAN COMMISSION has put forward a legislative proposal to establish an EU system for:
Accurate Monitoring, Reporting and Verifying (MRV) of CO2 emissions from large ships calling in EU ports
The reduction of CO2 emissions from maritime transportation in a cost effective manner
It is the first step “of a staged approach” to include maritime transport emissions in the EU GHG reduction commitment
Proposed to enter into force in July 2015 and to apply to shipping activities carried out from 1 January 2018

23. All ships > 5,000 GRT calling to EU ports
EU PROPOSED REGULATION on MRV
Applicability
All ships > 5,000 GRT calling to EU ports
The reporting is mandated for CO2 emissions when ships travel:
between EU ports,
an incoming voyage from an non-EU to an EU port
an outgoing voyage from an EU port to a non-EU port

24. EU PROPOSED REGULATION on MRV
The data reported should assist to monitor the ship’s average energy efficiency at least with the following four criteria:
Fuel consumption/distance
= total annual fuel consumption/total distance travelled
Fuel consumption/transport work
= total annual fuel consumption/total transport work
(transport work = distance x cargo)
CO2 emission/distance
= total annual CO2 emissions / total distance travelled
CO2 emissions/ transport work
= total annual CO2 emissions / total transport work  

25. EU PROPOSED REGULATION on MRV
Every Ship should have a Monitoring Plan approved by an accredited “Verifier”
The Reporting is on annual basis (calendar year).
Verifiers should check the reporting is in conformity with the Monitoring Plan
Verifiers should check “credibility” of the reported data
The reporting should be done by ‘companies’, i.e. the DOC holder, who must provide an emissions report for the previous calendar year’s activity

26. EU PROPOSED REGULATION on MRV
Options to calculate the fuel consumption:
use of BDN and periodic stock takes of fuel tanks;
onboard monitoring of bunker tanks,
flow meters for applicable combustion processes and
direct emissions measurement
The proposed rule has provisions with obligations for “verifiers” and it requests EU Member States to consider penalties for ships which do not comply with the reporting, including “expulsion”.
If verification is successful, the verifier will then issue a Document of Compliance to the Company.

27. EU PROPOSED REGULATION on MRV
 Dates for implementation:
1st July 2015 – enter into force
31st August 2017 – companies should prepare and submit to “verifiers” Monitoring Plan (monitoring plans for ships coming in operations after 1 January 2018 should be provided not later than 2 months after first call to an EU port)
1st January 2018 – starts first annual reporting period
2019 and after – by 30th April each year, companies shall submit a verified emissions report to the EU Commission and to the Flag State
30th June each year - the EU Commission will make the emissions reported by ships publicly available

28. INTERTANKO COUNCIL DECISION
INTERTANKO supports the concept of MRV of the CO2 emissions of ships in operations.
In addition, INTERTANKO will continue investigations and assessments on the best model of a MRV concept adapted to the specific operations of oil and chemical tankers according to the following principles:
1. Ship’s efficiency - best method to measure performance improvement with the fuel consumption being the critical parameter. (“ship’s efficiency” should, in a broader sense be weighted and clarified versus the term of “transportation efficiency”)
2. For internal use only, initiate data collection from all members on the annual fuel consumption data (years 2010, 2011 and 2012) using the cumulative data on BDNs

29. DATA COLLECTION FOR INTERNAL USE
Vessel # (for confidentiality, ship’s name or IMO # not required)
DWT (max. summer draught)
Type tankers (oil, product, chemical/product, chemical)
Total time on laden voyages (hours) / reporting period (one year)*
Total distance in laden voyages (nm) / reporting period (one year)*
Total number of voyages / reporting period (one year)*
Total cargo onboard (tonnes) / reporting period (one year)*
Total time on ballast voyages (hours) / reporting period (one year)*
Total time at berth (hours) / reporting period (one year)* –
Total fuel consumption at berth / reporting period (one year)*
Total fuel consumption (tonnes) / reporting period (one year)* (HFO- LSHFO- MGO)
Σ tonne-miles for all voyages / reporting period (one year)*
* reporting period (one year) – INTERTANKO proposed definition:
“All completed voyages in one calendar year during which emissions have to be monitored and reported”

30. EEOI

31. INTERTANKO JOINT WORKING GROUP ACTIVITY
Provide comments to the EU proposed MRV regulation &
Develop a Monitoring Plan for tankers
Promote these with the EU Commission, Parliament and Council
Continue to collect data from Members & find best approach to assess tankers’ fuel efficiency
Propose how to distinguish or remove from the assessment the involvement / influence of other stakeholders (importers, charterers, cargo owners, etc.)
Attempt to develop an INTERTANKO model to take into account the above

32. INTERTANKO possible model
General guideline for setting up a MRV system: the model should be simple (protect its credibility through its simplicity), easy to verify, use data already mandated through existing regulations
Monitoring by using the BDN data together with periodical sounding of bunker tanks.
BDN data is an “over reporting” of fuel consumption (HFO) – ask DNVPS for statistics to determine a correction facto (e.g. 1.5% or 2%)
Other uncertainties ref. fuel delivered:
delivery shortage
HFO calorific values (38 to 41 MJ/kg or some 7% difference)
fuel density
temperature correction factor
Ask DNVPS to check deviation of fuels calorific values versus the value for which the CF values are calculated

33. INTERTANKO possible model
Assessment of the tanker fuel efficiency - A two-tier approach may be considered. For example:
- The “overall indicator” reflecting the transportation performance in operation (defining the “transportation efficiency”; e.g. a sort of EEOI )
An additional Energy Efficiency Tanker Indicator (EETI) indicating the ship’s technical efficiency considering only parameters under the ship owners’ control
If tanker is not compliant with the mandated “transportation efficiency” baseline, EETI could indicate whether tanker is still in compliance by its own performance not taking into account factors outside the tanker operator’s control

34. INTERTANKO possible model
WG considered two options on how to approach a definition of EETI:
Option 1 – Direct assessed ship technical indicator (i.e. S-P curves)
Option 2 – Normalising the EEOI versus the commercial criteria
The discussions led towards a hybrid of the two options above on which EETI should be an indicator that can be derived from EEOI and which represents the carbon intensity of a ship in a reference condition
The EETI might enable a transparent performance benchmarking
The EEOI formula can be mathematically expressed and split into :
- a technical factor and
- a logistics factor

35. INTERTANKO possible model
The technical factor relates the fuel consumption ( as reported in the calculation of the EEOI) with the ship’s design parameters, i.e. full load (dwt) and the designed speed (Vdes)
The logistics factor can be analysed into three elements:
the “cargo utilisation” (actual cargo/over maximum cargo capacity mL/dwt),
the “distance utilisation”(distance covered in laden condition versus the total distance [dL/(dL + dB)]
the “speed utilisation” (actual average speed for the period used to calculate the EEOI/ design speed or Vop/Vdes)
For the calculation of the EETI it is necessary to apply a correction for the fuel consumption, which has to be related to the design speed. Therefore a fuel consumption correction factor “fss” is used (which can be derived from S-P curves) but for most ships is adequate to assume: fss =(Vdes/ Vop)^3
By applying all above factors to the EEOI, then the EETI is calculated as a “normalized” figure of the EEOI, somehow “neutralizing” the influence of commercial parameters in the logistics factor

36. INTERTANKO possible model
CALCULATED EETI ( DERIVED FROM OPERATIONAL DATA USED FOR EEOI)
FOR SAME SHIP IN DIFFERENT CARGO LOADING AND SPEED CONDITIONS
Baseline
Low Utilisation
High Uitilisation
Speed
Cons.
dL/(dL+dB)
0.5
0.7
DWT(t)
Vdes (kn)
Vop
(kn)
FC (ton/d)
 mL/dwt
0.9
300,000 15
100
EEOI
6.38
8.20
4.56
EETI
2.87
Slow Steaming 14 80
5.47
7.03
3.91
2.82
Hull Fouled
120
7.65
9.84
3.44

37. INTERTANKO possible model

38. INITIAL EEOI DIFFERENCE OF 9 SISTER SHIPS
DATA COLLECTION: JANUARY 2010 – DECEMBER 2011

39. COMBINED UTILISATION & LADEN FACTOR
UTILISATION = ACTUAL CARGO WEIGHT (LADEN) / DWT
LADEN FACTOR = LADEN DISTANCE / TOTAL DISTANCE

40. BALLAST VOYAGES

41. INTERTANKO possible model
FURTHER ISSUES TO ADDRESS:
How to determine the “base line” from which a target mandatory value can be established (e.g. could EEOI calculated for the operational condition at designed speed and fully loaded be the base line?)
if so, the “target EEOI/EEI” mandatory curve could probably be decided by imposing a reduction from the base line by a certain percentage; such a percentage may be assessed by using the data collected under MRV
if ship is not compliant with the “target EEI”, how should EETI value be used as a secondary compliance indicator, etc.?
There were other various suggestions such as trying to limit the ship’s cargo capacity utilisation by using ship’s displacement.
There also questions whether data collected would indicate that ships are properly used and using EEOI only would be a simpler approach

42. thank you

43. AVERAGE SPEED VARIATION

44. DIFFERENT FUEL CONSUMPTIONS

45. INTERTANKO possible model
SHIP TECHNICAL STATUS REFERENCE
OPERATIONAL STATUS (NEW & EXISTING)
NEW SHIP
EXISTING SHIP
TECHNICAL EFFICIENCY
TRANSPORTATION EFFICIENCY
EEDI
EEI
EETI
EEOI (or equivalent)
ONE-OFF INDEX determined upon vessel’s delivery
ONE-OFF INDEX OR Speed-Power Curve
Reference to the “as built” condition
Indicating the status at any given time during ship’s life and the deviation from the reference values (EEI or S-P CURVE)
Measure of transportation efficiency over a period of time
ESTABLISHED
TO BE DEVELOPPED
(IMO definition)
Reference to a ship but also used to create reference line(s) for tanker types: e.g. chemical/oil; parcel; oil)
Indicator for the ship’s energy efficiency not influenced by commercial parameters (cargo utilization, speed)
(IMO definition used in SEEMP)

46. SOx EMISSIONS - COMPLIANCE OPTIONS
FUEL
LOW SULPHUR FUEL (0.10% MGO)
Some challenges
Expensive solution but a number of advantages
Availability
LIQUID NATURAL GAS (LNG)
Not realistic for most of the existing ships
New ships in the future (supply network needed)
EXHAUST GAS CLEANING SYSTEMS (scrubbers)
Performance (fit for purpose & reliability)
Rule predictability (acceptance by port authorities)
Cost – efficiency – ECA Calculator