1. The INTERTANKO options to meet marine environmental challenges by Erik.Ranheim@INTERTANKO.com Manager Research and Projects Global Forum Strategic Planning Workshop Nice, January 2008 ‘ Erik.Ranheim@INTERTANKO.com

2. International Association of Independent Tanker Owners For safe transport, cleaner seas and free competition Trade association established in Oslo in 1970 Spokesman, information service, meeting place Membership 280 Members 40+ countries 2,800+ tankers 230 million dwt 75% of independent tanker fleet 300 Associate Members INTERTANKO

3. Safety performamce

4. Accidental oil pollution into the sea Source: ITOPF/Fearnleys 1000 ts spilt bntonne-m

5. Pollution rate 1000 ts spilt per bn tonne miles carried Source: Fearnleys/INTERTANKO Index

6. Shipping and the environment 60,000 ships (above 400 GT) 7,507,000,000 ts goods average distance 4,400 miles + 90% of total world trade Consumes 10% of world oil Emits 4.5% of global CO 2 Economics of scale: One VLCC = 8,000 trucks

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10. Shipping and air emission

11. Shipping and the environment Shipping is fuelled by the dirties part of the barrel The oil residues used by shipping contain: SO 2 NOx VOC Heavy metals Soot

12. Reducing harmful emissions from ships Onboard abatement technology –Still undergoing testing SECAs/NECAs –Air pollution recognises no borders Type and quality of fuel –The KEY to ultimate control of air emission

13. The world is moving away from HFO Oil consumption by product - % share Source: BP Review % share m ts

14. Modern refiners do not produce HFO The new line at Neste’ Porvoo refinery will use residue oil to produce 1 m ts per year sulphur-free, clean motor fuels, particularly diesel fuel. The fuel will meet the latest environmental requirements in Europe and N America. The refinery will be capable of considerably increasing the refining of very profitable products, such as sulphur-free diesel fuel.

15. INTERTANKO Study No ships =>400 GT:58,859 HFO consumption: 350 m ts MDO consumption: 60 m ts CO 2 emission w. HFO: 1,246 m ts SOx emission: 20.1 m ts

16. Why not scrubbers? Still under testing Large, expensive and difficult (or impossible?) to install Wastewater react with seawater and cause CO 2 emission Up to 100 kg per day of hazardous sludge For a 20 MW main engine up to 22,000 ts/day seawater needs to be processed * * * Source: Krystallon We are involved in transportation – not waste treatment

17. Why not SECAs? Air pollution knows no borders International shipping needs global regulations The most dense shipping areas are close to shore the North Sea, the Mediterranean, the Gulf of Mexico and South East Asia Switching fuels – a safety problem Sulphur Emission Control Areas, the Baltic and the North Sea LSFO availability “..refineries have a clear incentive for further conversion of its entire residual streams to distillate products compared to residue desulphurisation to produce more LSFO” May 2006 c Nov 2007 seCas Confusions, Complexities, Criminalisation ?

18. Why switching to distillates? A simple solution that: 1. 1. Gives a global reduction of emission SOX, - 60-80%, PM, - 80-90%, NOx, - 15%……………… 2. 2. Leaves no onboard waste 3. 3. Provides a more healthy environment for crew and dockworkers 4. 4. Reduces overall fuel consumption 5. 5. Gives no control or monitoring problems 6. 6. Causes far less pollution when spilled 7. 7. Provides opportunity for the development of more efficient engines (w. less emission) 8. 8. Applies to all ships and all current engines Cleaner, Simpler and more Efficient ships

19. Switching to distillates CO2 balance IMO Group of Experts will provide figures +CO 2 emission when continuing to burn HFO: buffering from scrubbers higher fuel consumption running of scrubbers heating of HFO burning handling of waste more abatement equipment +CO 2 emission when burning distillates: conversion of HFO to distillates construction of conversion plants handling of waste from conversion plants

20. Potentials pollution reduction Reduction of excess Fuel consumption by utilisation of waste heat and reduction of losses Use of MDO as fuel – Saving 31.5 million tonnes Reducing Sulphur content of fuel – less “buffering” and release of CO2 from the Oceans – potential saving 27 million tonnes Reduction of leakage of refrigerants - makes it possible to develop more efficient engines diminish bunker pollution to sea Fleet utilization - reduction in ballast time Slow steaming In creasing ships size Indexing of ships Engine improvements

21. Shipping and the environment   Shipping represents a small part of pollution into the sea   Regulated by IMO   Shipping exposed to multilevel control system   Flag state   Port State   Classification Societies   Charterers (market forces), insurers, banks   Air emission regulated as from 2005, but   Stricter requirements required   Want to learn and improve

22. Long term practicable measures to reduce emission necessary Shipping is energy efficient - but burning the dirties part of the barrel cause pollution- acidification The oil industry is moving towards cleaner fuels Needs to be regulated to create even playing field Large investments necessary over a prolonged period - no matter solution Cleaner shipping