1. Air Emissions Regulations INTERTANKO Strategy NORTH AMERICAN PANEL MEETING 24 OCTOBER 2006

2. BACKGROUND ANNEX VI ADOPTED IN 1997 AT IMO INTERNATIONAL CONFERENCEANNEX VI ADOPTED IN 1997 AT IMO INTERNATIONAL CONFERENCE ENTERED INTO FORCE MAY 2005ENTERED INTO FORCE MAY 2005 (US CURRENTLY NOT A PARTY) MEPC 53 (JULY 2005) AGREES TO REVIEW/REVISION OF ANNEX VIMEPC 53 (JULY 2005) AGREES TO REVIEW/REVISION OF ANNEX VI WORKING GROUP TO MEET IN OSLO, NORWAY FROM 13-17 NOVEMBERWORKING GROUP TO MEET IN OSLO, NORWAY FROM 13-17 NOVEMBER

3. INTERTANKO EXCOM Discussions & Agreements Air emissions from ships: a major issue for governments, port and coastal authorities and the IMO; a high priority for environmentalist organisationsAir emissions from ships: a major issue for governments, port and coastal authorities and the IMO; a high priority for environmentalist organisations Governments have high expectations - threat of unilateral regimesGovernments have high expectations - threat of unilateral regimes INTERTANKO should actively contribute to the revision processINTERTANKO should actively contribute to the revision process INTERTANKO should develop a strategy in promoting its policies and also in gaining support from the shipping communityINTERTANKO should develop a strategy in promoting its policies and also in gaining support from the shipping community

4. INTERTANKO EXCOM Discussions & Agreements Secretariat develops a Strategy PaperSecretariat develops a Strategy Paper Invites ISTEC input on technical and operational aspectsInvites ISTEC input on technical and operational aspects Strategy draft Paper & ISTEC input to be presented to EXCOMStrategy draft Paper & ISTEC input to be presented to EXCOM

5. Principles for an INTERTANKO Strategy Ensure a solid platform of requirementsEnsure a solid platform of requirements Be realistic and feasibleBe realistic and feasible Be simple and straightforward to the extent that they do not complicate ship operationsBe simple and straightforward to the extent that they do not complicate ship operations Seek a long term and positive reduction of air emissions from ships, andSeek a long term and positive reduction of air emissions from ships, and Contribute to a long term and a predictable regulatory regimeContribute to a long term and a predictable regulatory regime Regulations based on a fuel standard rather than an emissions performance standard, and thus reduce the onus of responsibility on the owner/operator for verification and compliance.Regulations based on a fuel standard rather than an emissions performance standard, and thus reduce the onus of responsibility on the owner/operator for verification and compliance.

6. ALTERNATIVE SOLUTIONS “Clean” fuels and/or alternative solutions such as:“Clean” fuels and/or alternative solutions such as: Exhaust gas scrubbers - Scrubber technologies are not yet proven and have their own environmental as well as economic and availability challengesExhaust gas scrubbers - Scrubber technologies are not yet proven and have their own environmental as well as economic and availability challenges Selective Cathalytic Reducing System (SCR) – technologies yet to be proven as reliableSelective Cathalytic Reducing System (SCR) – technologies yet to be proven as reliable “Cold ironing” - with associated problems including the lack of an international standards for voltage/frequency of power, of shore/ship connection systems and compatibility with shipboard requirements for power supply for hydraulic power sources (compressors needing up to several MW of power)“Cold ironing” - with associated problems including the lack of an international standards for voltage/frequency of power, of shore/ship connection systems and compatibility with shipboard requirements for power supply for hydraulic power sources (compressors needing up to several MW of power)

7. ISSUES FOR DISCUSSION Two tier global cap for sulphur:Two tier global cap for sulphur: –[2010] – Distillate with 1.0% S content –[2015] – Distillate with 0.5% S content (new engines) Removing the SECA provisionRemoving the SECA provision Reconsider the current provisions for rule complianceReconsider the current provisions for rule compliance

8. ISTEC DISCUSSIONS Under the circumstances & from a technical/operational point of view, best solution for ship operatorsUnder the circumstances & from a technical/operational point of view, best solution for ship operators Advantage since ships would use one fuel type onlyAdvantage since ships would use one fuel type only Modern refineries – no residsModern refineries – no resids Modifications like change of fuel pumps, etc. are not considered majorModifications like change of fuel pumps, etc. are not considered major Use of lower BN lube/cylinder oil not a technical challengeUse of lower BN lube/cylinder oil not a technical challenge ISTEC WG on technical aspectsISTEC WG on technical aspects FULL SUPPORTFULL SUPPORT

9. FURTHER ACTION Draft submission to IMODraft submission to IMO Invite RT to consider and eventual joinInvite RT to consider and eventual join Submit paper to IMO & Press ReleaseSubmit paper to IMO & Press Release Meetings with the EU Comission & EMSAMeetings with the EU Comission & EMSA Meetings with Administrations that play a key role in IMOMeetings with Administrations that play a key role in IMO Meeting with OCIMFMeeting with OCIMF