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THECHAMBEROFSHIPPINGANNUALREVIEW2011–2012


Shipping contributes just 2.7 per cent of greenhouse gases globally, but is required to play its part in reducing emissions. The Chamber has been representing the sector at UK and EU governmental levels to ensure solutions proposed are workable.


The next decade promises to be extremely challenging for the shipping industry as it faces a raft of environmental regulation, nearly all of which will require significant capital investment to ensure compliance. The two main areas of which most people are


aware relate to sulphur oxide (SOx) and carbon emissions. Whilst these issues attract the most media attention, there are many other areas of concern that will impinge greatly on our industry; these include the Ballast Water Convention, nitrogen oxide (NOx) regulations, the potential for including emissions of black carbon (particulate matter) within MARPOL, bio-fouling, marine noise, ship recycling and MARPOL Annex IV (sewage and garbage). While some of these regulations are many years away from coming into force, others are imminent and some are in force, though subject to possible extension of scope. Every one of them demands considerable attention from our industry if it is to avoid punitive requirements for ship owners. One of the most vexing problems in dealing with


these important environmental issues is the impact that one ‘solution’ or set of regulations will have on other areas. This lack of a holistic approach is not only causing problems as the burden is shifted around the environmental plot, but also defies logic. So, however laudable one might consider, for example, the amended MARPOL Annex VI regulations for SOx, there is little doubt that compliance will have a significant cost in financial and societal terms – job losses – as well as significantly hitting carbon targets. Meeting the requirement for low sulphur fuels will mean a greater take-up of distillate fuels for those vessels for which abatement measures are not a practicable option. To produce distillate low sulphur fuels requires an energy intensive process of hydro- treating. It has been estimated that to produce this fuel in sufficient quantity to meet the 2015-2020 requirements in Emission Control Areas (ECAs) and globally will add about 90 million tonnes of CO2


to


the atmosphere. To put that into perspective, the UK target for total carbon emissions in 2050 is 160 million tonnes. This is not a trivial matter and yet it is given little consideration by those fighting for lower and lower levels of sulphur in fuel. The impact of meeting the SOx regulations on


THERE IS LITTLE


DOUBT THAT COMPLIANCE WILL HAVE A SIGNIFICANT COST IN FINANCIAL AND SOCIETAL TERMS – JOB LOSSES – AS WELL AS SIGNIFICANTLY HITTING CARBON TARGETS


carbon targets is not just restricted to the additional refining energy requirements. Low sulphur fuel is very expensive – the price differential averaged out over the last 10 to 20 years is a 75 to 87 per cent increase. A recent German study conducted by ISL Bremen in 2010 predicts that this price rise will drive a considerable modal shift from sea to land where there is an option to do so. Whilst this is of particular concern to the Baltic states, the UK will not be immune. This study concludes that the additional freight charges will result in an extra 600,000 trucks annually on German roads alone. This will totally undermine the attempts by many governments, our own included, to get freight off the roads and to encourage a greater use of short sea shipping, recognising that ships are at least twice as efficient as trucks in terms of carbon emissions per tonne of goods transported. One should also remember that SOx emissions have a cooling impact on our environment and this too should be taken into account.


ENVIRONMENT 11


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