1. Confidential – © 2009, VITO NV – All rights reserved 01/06/2015Reducing air pollution from shipping1 Assessment of Policy Options to reduce Air Pollution from Shipping using Market Based Instruments P. Campling, S. Janssen, P. Lodewijks, Koen Van Den Bossche (IEEP), Kris Vanherle (TML)

2. Confidential – © 2009, VITO NV – All rights reserved 01/06/2015Reducing air pollution from shipping2 Overview »Background, objectives and consortium »Importance of maritime emissions »Policy developments to reduce maritime emissions »Legal and technical issues »Approach to quantifying benefits of including maritime into a land based ETS »Summary

3. Confidential – © 2009, VITO NV – All rights reserved 01/06/2015Reducing air pollution from shipping3 Background, objectives and consortium »Background – DG ENV service contract Dec ’08 to Dec ’09 – use of market based instruments to reduce air pollution »Lot 1 – land based sources (IPPC installations) – ENTEC consortium »Lot 2 – maritime sources – VITO consortium »Objective and tasks »Expand land based EU ETS to include maritime sector »Special attention to legal and technical aspects (Task 1) »Possible solutions to obstacles (Task 2) »Assessment of benefits (Task 3) »Consortium »VITO – project coordination, air dispersion modelling, ETS (MBI) tool, impact assessments »IEEP – environmental policy experts at EU level, maritime law »TML – TREMOVE model, maritime emissions, abatement curves »ARCADIS – maritime emissions and abatement curves

4. Confidential – © 2009, VITO NV – All rights reserved 01/06/2015Reducing air pollution from shipping4 Importance of maritime emissions »90% of EU’s external trade transported by water »3.5 billion tonnes freight loaded and unloaded per year »Sea freight grew 34% 1995 to 2005 »Most major ports continue to grow »Rotterdam 1990 to 2004 +23% »Antwerp 1990 to 2004 +50% »Hamburg 1990 to 2004 +88%

5. Confidential – © 2009, VITO NV – All rights reserved 01/06/2015Reducing air pollution from shipping5 Importance of maritime emissions (SO2 and NOx)

6. Confidential – © 2009, VITO NV – All rights reserved 01/06/2015Reducing air pollution from shipping6 Policy developments to reduce shipping emissions (Sulphur) (2000 to 2006) Time- line Regulat- ion Refer- ence Enforce- ment Area Impacted Operator Detail of Restriction 07/ 2000 1999/32/ECEU PortsAll VesselsMax 0.2% m/m sulphur content of Marine Gas Oil 08/ 2006 2005/33ECEU PortsScheduled Passenger Vessels (>12 passengers) Max 1.5% m/m sulphur content of bunker fuel 08/ 2006 2005/33ECBaltic Sea (SECA) All VesselsMax 1.5% m/m sulphur content of bunker fuel 08/ 2006 1999/32/EC 2005/33EC EU PortsSuppliersNo sale of > 1.5% sulphur content of Marine Diesel Oil

7. Confidential – © 2009, VITO NV – All rights reserved 01/06/2015Reducing air pollution from shipping7 Policy developments to reduce shipping emissions (Sulphur) (2007 to 2010) TimelineRegulation Reference Enforce ment Area Impacted Operator Detail of Restriction 11 August 2007 2005/33ECNorth Sea (SECA) All VesselsMax 1.5% m/m sulphur content of bunker fuel 1 January 2008 1999/32/EC 2005/33EC EU PortsAll VesselsMax 0.1% m/m sulphur content Marine Gas Oil 1 Jan 20102005/33ECEU PortsAll Vessels at berth and inland waterways Max 0.1% m/m sulphur content of fuel. Exemptions for: Short-stay vessels Using shore-side electricity 1 Jan 20101999/32/EC 2005/33EC EU PortsSuppliersNo sale of >0.1% sulphur content of Marine Gas Oil

8. Confidential – © 2009, VITO NV – All rights reserved 01/06/2015Reducing air pollution from shipping8 NEC Report Version 6 (IIASA) – emissions (kT) BAU 2020 SO2 BAU 2020 NOx BAU 2020 PM2.5 IMO 2020 SO2 IMO 2020 NOx IMO 2020 PM2.5 Baltic Sea 17140429143494 Med Sea 171423111981714222097

9. Confidential – © 2009, VITO NV – All rights reserved 01/06/2015Reducing air pollution from shipping9 Legal and technical issues and constraints International legal framework (enforcement / practicalities) »Main problem transboundary issue (+different jurisdictional zones) »Law of the Sea convention (maritime zones affecting enforcement) »Marine pollution (in principle dealt with through IMO - politically/or legally regarded as sole institution) »Internal waters (port state jurisdiction) »Territorial seas (innocent passage) (<12nm) »Contiguous zone (only enforcement of functional rights in respect of territory) (12 – 24 nm) »Exclusive Economic Zone (only functional sovereign rights) (<200nm) »High seas (flag state jurisdiction) »Flag of convenience within and outside Community waters

10. Confidential – © 2009, VITO NV – All rights reserved 01/06/2015Reducing air pollution from shipping10 Preliminary results of legal / technical analysis »Inland waters (including ports) »Emission trading possible »Differentiated dues/charges possible »Taxation possible »Imposing fuel and technology standards possible »Territorial seas (less 12 nautical miles) – MBI and regulation tools are only possible in “context of services rendered” »Emission trading NOT possible »Differentiated dues/charges possible »Taxation possible »Imposing fuel and technology standards NOT possible

11. Confidential – © 2009, VITO NV – All rights reserved 01/06/2015Reducing air pollution from shipping11 Shipping emissions inventory »Determine an EU maritime emission baseline, taking into account: » Geographic distribution » Port / at sea (cfr. different health impact, ETS schemes) » Source type (i.e. technology relating to abatement options) » (Vessel type) » (Size) »Data sets – EXTREMIS database (inventory developed for JRC), IIASA data (based partially on ENTEC grid), TREMOVE and EMMOSS (detailed ship emissions from Belgian ports)

12. Confidential – © 2009, VITO NV – All rights reserved 01/06/2015Reducing air pollution from shipping12 Shipping emissions – ports vv seas, EU vessels vv non- EU vessels (NOX)

13. Confidential – © 2009, VITO NV – All rights reserved 01/06/2015Reducing air pollution from shipping13 Shipping emissions – ports vv seas, EU vessels vv non- EU vessels (SO2)

14. Confidential – © 2009, VITO NV – All rights reserved 01/06/2015Reducing air pollution from shipping14 Modelling impact of ETS (MBI) options »Specific Objectives »Modelling the environmental impacts of an NOx and SO2 ETS (other MBI options) extended for ship emissions »EU wide assessment (60km resolution) »Zoom on restricted trading zones or hotspots e.g. the Channel, Baltic Sea (7.5 km resolution)

15. Confidential – © 2009, VITO NV – All rights reserved 01/06/2015Reducing air pollution from shipping15 Modelling scheme for impact of ETS (MBI) options Emission inventory maritime sector Emission Trading System (MBI options) EU emission inventory (IIASA, EMEP) E-MAP (emission mapping tool) belEUROS (dispersion model) – EU and hotspots Impact assessment Population density Critical loads ExternE factors ECMWF meteorology

16. Confidential – © 2009, VITO NV – All rights reserved 01/06/2015Reducing air pollution from shipping16 Modelling impact of ETS (MBI options) simulations »Transformation of ETS output to gridded emissions: E-MAP tool »Tool developed at VITO »Spatial distribution of emissions making use of proxy data (e.g. shipping routes, EPRTR stack data, poplation density…) »Output emissions compatible with dispersion model

17. Confidential – © 2009, VITO NV – All rights reserved 01/06/2015Reducing air pollution from shipping17 Dispersion modelling tool »Dispersion model: BelEUROS »EUROS developed by RIVM (Netherlands) for modelling of ozone »BelEUROS extended by Vito in 2004/2005 to model dispersion of primary and secondary particulate matter (PM10, PM2.5) »Meteo: ECMWF (T, rH, wv+wd, CC, PR, mixing layer height) »Emissions: EMEP/CORINAIR + local emission inventories »Emission scenarios: GAINS Europe »Resolution: horizontal: 60 kmor 7.5 km

18. Confidential – © 2009, VITO NV – All rights reserved 01/06/2015Reducing air pollution from shipping18 Impact assessment »Gridded emissions (E-MAP) »Air quality maps for the EU domain and the Channel zoom (belEUROS) »Impact assessment on human health (population exposure) and sensitive ecosystems (exceedance of critical loads)

19. Confidential – © 2009, VITO NV – All rights reserved 01/06/2015Reducing air pollution from shipping19 Summary »Shipping is an important source of NOx and SO2 emissions »Legal and technical constraints on using MBI to reduce NOx and SO2 pollution from ships (legal jurisdiction, legal enforcement, EU vv non-EU vessels, 16 vessel type categories »Inland waters (including ports) – ETS, differentiated dues/charges, taxation, fuel and technology standards »Territorial seas (less 12 nautical miles) – only differentiated dues/charges and taxation in context of services rendered »Ports only account for <10% NOx and S02 emissions »Generic tool at EU level – ETS (ports) + differentiated dues/charges (territorial seas + resticted seas e.g. Baltic, Adriatic)???? »Confined ETS scheme – Port Zone (ships trading with local IPPC installations)????