1. www.OurAir.org CDAWG Regulatory Update Marine Shipping Initiative Santa Barbara Channel Vessel Speed Reduction: Protecting Blue Skies & Blue Whales Program Proof of Concept Dave Van Mullem Air Pollution Control Officer October 8, 2014 1

2. Overview Proof of Concept Incentivize ($) reducing speed to 12 knots or less for transits July-October 2014 Blue whale season in Channel Ozone season for Central Coast Air Basin Modeled after successful LA & LB Ports Programs www.OurAir.org2

3. Trial Program Area www.OurAir.org3

4. Will An Incentive Program Work? No regulatory hammer so will ships participate? Can speeds & associated emission reductions be verified? How will incentive funding work, pricing and process? If ships slow down, why did they? www.OurAir.org4

5. Participating Companies K Line COSCO Hapag-Lloyd Maersk Line Matson United Arab Shipping Company Mitsui OSK Lines (MOL) www.OurAir.org5

6. Trial Program Outreach News release issued August 4th with partners –Regional, national, and international coverage; plus shipping industry publications www.OurAir.org6

7. National Marine Sanctuary Channel Islands (NOAA) Environmental Defense Center Santa Barbara County APCD Ventura County APCD www.OurAir.org7 VSR Partners

8. Trial Funding Total funding: $91,000 Covers 32 transits @ $2,500 each Funding sources: Santa Barbara Foundation Grant Santa Barbara County APCD Ventura County APCD Funding processing: through National Marine Sanctuary Foundation www.OurAir.org8

9. Incentive Program Worked No regulatory hammer so will ships participate? Yes Can speeds & associated emission reductions be verified? Yes How will incentive funding work, pricing and process? $2,500 incentive worked, funds passed through NMS Foundation If ships slow down, why did they? TBD www.OurAir.org9

10. Back-Up Slides www.OurAir.org10

11. Program Design Speed reduction to 12 knots Shipping company registers; ships and # of transits pre-qualified Speed verified prior to payment Incentive per transit $2500; plus public recognition www.OurAir.org11

12. National Marine Sanctuary Foundation Nonprofit that supports national marine sanctuaries Role in VSR Trial: signs agreements with shipping companies and handles funds contributed to program District MOA with Foundation for handling of District funds www.OurAir.org12

13. Shipping a major source of air pollution: –Diesel particulate, air toxics, sulfur dioxide, greenhouse gases –Ozone-forming pollutants – nitrogen oxides (NOx) and reactive organic compounds County Sources of NOx (2010 Clean Air Plan) Emissions Inventory www.OurAir.org13

14. Shipping Emissions Projections www.OurAir.org14

15. Emission Control Areas International Maritime Organization designates Emission Control Area (ECA) –Ships traveling up to 200 miles off North American must meet stricter fuel and new engine standards –Fuel sulfur limits effective Aug 2012 – match more stringent State standards starting Jan. 2015 North American ECA www.OurAir.org15

16. Rules Timeline Covers ships in (Zone) 2000 2008200920112012201420152016 2020 IMO standard (Annex VI) World New engines: Tier I NOx Fuel: 4.5% sulfur Existing engines: Tier I NOx New engines: Tier II NOx Fuel: 3.5% sulfur Fuel: 0.5% sulfur Emission Control Area (ECA) 200 nm off coast North America New engines: Tier II NOx Fuel: 1.0% sulfur Fuel: 0.1 % sulfur New engines: Tier III NOx CARB Fuel Rule 24 nm off CA coast Fuel: Sulfur gas oil 1.0% diesel oil 0.5% Rule extends to 24 nm outside Ch. Islands Fuel: 0.1 % sulfur www.OurAir.org16