Reduction of Emissions of Greenhouse Gas (GHG) from Ships
(1)
Faculty of Law, Queensland University of Technology, Brisbane, Queensland, Australia
6.1 Introduction
According to a study conducted by the International Maritime Organisation (IMO ), the maritime sector was responsible for nearly 3.3 % of the global greenhouse gas (GHG ) emissions during 2007. International shipping was responsible for about 2.7 % of the global emissions of CO2 in 2007.1 In the absence of proper actions, emissions from the maritime sector may grow by 150–250 % by 2050, in comparison with the emissions in 2007.2 Growth in the maritime sector is primarily responsible for this.3 This warrants proactive action to achieve a greener shipping industry.
The 1997 Kyoto Protocol of the United Nations Framework Convention on Climate Change (Kyoto Protocol ) calls upon States to pursue limitation or reduction of emissions of GHG from marine bunker fuels working through the IMO .4 In December 2003, the IMO Assembly adopted resolution A.963(23) on IMO Policies and Practices Related to the Reduction of Greenhouse Gas Emissions from Ships, which urged the Marine Environment Protection Committee (MEPC ) of the IMO to identify and develop the mechanisms needed to achieve the limitation or reduction of GHG emissions from international shipping: technical, operational and market-based solutions. Since then, negotiations have been ongoing within the MEPC for adoption of necessary legal instruments.
In 2011, 14 years after the adoption of the Kyoto Protocol, the MEPC has adopted mandatory energy efficiency measures for international shipping. The MEPC’s measures can be touted as the first ever mandatory global GHG reduction instrument for an international industry. The MEPC approved an amendment to Annex VI of the 1973 International Convention for the Prevention of Pollution from Ships (MARPOL 73/78).5 This amendment added a new Chapter 4 to Annex VI of the MARPOL Convention introducing a mandatory Energy Efficiency Design Index (EEDI ) for new ships and the Ship Energy Efficiency Management Plan (SEEMP ) for all ships.6 A survey and certification system, which includes an International Energy Efficiency Certificate, has also been introduced though this amendment.7 These regulations came into force on 1 January 2013. Despite serious opposition from a few developing countries—Brazil , Chile , China , India , Kuwait and Saudi Arabia —the State parties to the MARPOL Convention have decided that this legal instrument will be equally applicable for vessels of all countries.
Considering the growth projections of human population and world trade, the technical and operational measures may not be enough to reduce the amount of GHG emissions from international shipping to a satisfactory level. Therefore, the IMO is considering introducing market-based mechanisms that may serve two purposes: providing a fiscal incentive for the maritime industry to invest in a more energy efficient manner; and offsetting growing ship emissions.8 Negotiations are ongoing for the adoption of market-based measures to supplement previous technical and operational measures.
Some leading developing countries which participate regularly in the negotiation process voiced their serious reservations on the newly-adopted IMO regulations. They stated that, by imposing the same obligations on all countries, irrespective of their economic status, this amendment has seriously departed from the Principle of Common but Differentiated Responsibility (CBDR ), which has always been the cornerstone of international climate change law discourse. They also claimed that negotiation for a market-based mechanism should not be continued without a clear commitment from the developed countries to promote technical co-operation and to transfer technology relating to the improvement of energy efficiency of ships. Against this backdrop, this chapter presents a brief overview of already-adopted technical and operational measures from the perspective of developing and least developed countries. This chapter will also briefly discuss proposed market-based measures.
6.2 Technical and Operational Measures for Reduction of Emissions of GHG from Ships
IMO started considering the reduction of GHG emissions in the late 1980s. In 1997 the organization conducted the first IMO Study on GHG emissions from ships. The report identified a potential for reduction of GHG emissions through the introduction of operational and technical measures. In 2003, the IMO Assembly adopted resolution A.963(23) on IMO Policies and Practices Related to the Reduction of GHG Emissions from Ships. In 2009, IMO conducted another GHG Study. The IMO GHG Study 2009 concluded that the emissions from international shipping can be reduced by between 25 and 75 % by using energy-efficient design and operational practices.9
In July 2009, after considering the second IMO GHG Study, the MEPC approved a number of voluntary measures. These include Interim Guidelines on the Method of Calculation of the Energy Efficiency Design Index for New Ships (EEDI ), the Interim Guidelines for Voluntary Verification of Energy Efficiency Design Index, the Guidance for the Development of a Ship Energy Efficiency Management Plan (SEEMP ) and the Guidelines for Voluntary use of the Energy Efficiency Operational Indicator (EEOI ). In July 2011, the MEPC adopted a draft amendment to MARPOL Annex VI and included legally-binding regulations on energy-efficiency for ships (the “Energy Efficiency Regulations”). These amendments to MARPOL Annex VI entered into force on 1 January 2013 through a tacit acceptance procedure. They introduced a mandatory EEDI for new ships and the SEEMP for all ships.
Technical and operational measures have been introduced to improve the energy efficiency of ships. This is achieved by improvements in a ship’s equipment and improvements and innovation in the operation of ships.10 As mentioned earlier, IMO introduced a mandatory EEDI for new ships and the SEEMP for all ships. The EEDI relates to technical measures for reduction of GHG emissions from ships and the SEEMP relates to operational measures for reduction of GHG emissions from ships. The EEDI introduces a non-prescriptive and performance-based mechanism. It allows the ship-owner to choose suitable or most cost-effective technologies as long as the required energy efficiency level is attained.11 Unlike previous IMO regulations it did not prescribe particular equipment.
6.2.1 SEMP
SEMP introduces a mechanism for improving the operational energy efficiency of ships. It encourages not only a ship-specific SEEMP, but also a border corporate energy management policy for shipping companies. Each ship shall keep on board a ship SEEMP that may be part of the ship’s Safety Management System (SMS ).
The SEEMP shall be developed taking into account guidelines adopted by IMO. Accordingly, the MEPC has adopted guidelines, which are now required by the amended MARPOL Convention, for ships to assist with the preparation of SEEMP.12 According to these guidelines, “[a] SEEMP provides a possible approach for monitoring ship and fleet efficiency performance over time and some options to be considered when seeking to optimize the performance of the ship”.13 The 2012 Guidelines stipulate that the “SEEM P seeks to improve a ship’s energy efficiency through four steps: planning, implementation, monitoring, and self-evaluation and improvement”.14 The planning stage will determine the current status of ship energy usage as well as the mechanism for improvement of ship energy efficiency.15 This stage involves ship-specific measures, company-specific measures, human resource development and goal-setting.16 However, “… the goal-setting is voluntary, that there is no need to announce the goal or the result to the public, and that neither a company nor a ship are subject to external inspection”.17 After the planning and identifying operational measures, the ships must establish a proper implementing mechanism for “selected measures by developing the procedures for energy management, by defining tasks and by assigning them to qualified personnel.” According to the 2012 Guidelines, “the SEEMP should describe how each measure should be implemented and who the responsible person(s) is. The implementation period (start and end dates) of each selected measure should be indicated. The development of such a system can be considered as a part of planning, and therefore may be completed at the planning stage”.18 The guidelines also encourage record-keeping of the implementation of each measure and of identified measures that cannot be implemented for any reason(s).19 They also suggest the quantitative monitoring of the energy-efficiency of a ship through an established method, preferably using an international standard,20 and envisaging implementation of a periodic self-evaluation system by using data collected through monitoring.21
The 2012 Guidelines identify a number of efficiency measures and suggest that all parties involved should consider the inclusion of these measures in their operations. These efficiency measures include fuel-efficient operations measures such as improved voyage planning, weather routing, just in time, speed optimization, optimized shaft power, as well as optimized ship handling techniques. These techniques include optimum trim, optimum ballast, optimum propeller and propeller inflow considerations. The guidelines also raise other issues for energy efficiency, such as those concerning hull maintenance, propulsion system, propulsion system maintenance, waste heat recovery, improved fleet management, improved cargo handling, energy management and fuel type, age and operational service life of a ship, trade and sailing area.22 The guidelines further encourage the “[d]evelopment of computer software for the calculation of fuel consumption, for the establishment of an emissions “footprint”, to optimize operations, and the establishment of goals for improvement and tracking of progress may be considered”.23 They also suggest on-board application of renewable energy sources as well as the feasibility of wind assisted propulsion.24
The amendment of the MARPOL Convention makes SEEMP compulsory for every vessel and also provides that the “SEEMP shall be developed taking into account guidelines adopted by the IMO”.25 The Convention obligates ship-owners to take into account the guidelines adopted by the IMO, but does not make it compulsory to follow those guidelines. This leaves a broad discretion to ship-owners to decide what measures to adopt for ensuring energy efficiency. Although SEEMP is mandatory, it does not impose a specific energy-efficiency target for ships or companies.
6.2.2 EEDI
On the other hand, EEDI imposes binding obligations to reduce GHG emissions from ships by introducing a minimum energy efficiency level per capacity mile for different ship types and size segments. EEDI provisions are applicable to new ships,26 new ships which have undergone a major conversion27 and new or existing ships which have undergone a major conversion that is so extensive that the ship is regarded by the Administration as a newly-constructed ship.28
The ships to which EEDI is applicable are required to attain EEDI using a formula prescribed by Regulation 21 of Annex VI of the MARPOL Convention. This regulation prescribes different levels of reduction targets for bulk carrier, gas carrier, tanker, container ship, general cargo ships, refrigerated cargo carrier, and combination carrier.29 The regulation prescribes a progressive increase in reduction target over four phases: Phase 0-1 Jan 2013–31 Dec 2014; Phase 1-1 Jan 2015–31 Dec 2019; Phase 2-1 Jan 2020–31 Dec 2024; Phase 3-1 Jan 2025 and beyond. It is assumed that the shipping sector will be able to take more onerous emission reduction targets with the progressive advancement of applicable technology and equipment. However, there is scope for reconsidering this target. According to Regulation 21(6) of the MARPOL Convention, “At the beginning of Phase 1 and at the midpoint of Phase 2, the Organization shall review the status of technological developments and, if proven necessary, amend the time periods, the EEDI reference line parameters for relevant ship types and reduction rates set out in this regulation”.30 There is scope for increasing or decreasing the target depending on the level of technological development.
Unlike previous IMO legal instruments relating to the prevention of vessel-source pollution, the EEDI regulation does not prescribe any specific equipment or technology. According to the IMO, it “is a non-prescriptive, performance-based mechanism that leaves the choice of technologies to use in a specific ship design to the industry. As long as the required energy efficiency level is attained, ship designers and builders are free to use the most cost-efficient solutions for the ship to comply with the regulations”.31 The attained EEDI shall be calculated taking into account guidelines developed by the IMO. The IMO has developed three guidelines in this regard.32
The EEDI is applicable only to ships of 400 gross tonnage and above. Moreover, these ships have a leeway period. Regulation 19 allows the Administration to waive compliance with the EEDI requirements until 4 years after the entry into force date of the regulations.33
The IMO is expecting significant emission reductions and cost savings for the shipping industry by implementing these regulations. As observed in a document published by the organization:
By 2020, between 100 and 200 million tonnes of annual CO2 reductions are estimated from the introduction of the EEDI for new ships and the SEEMP for all ships in operation, a figure that, by 2030, will increase to between 230 and 420 million tonnes of CO2 annually. In other words, the reductions will in 2020 be approximately between 10 and 17 % and by 2030 between 19 and 26 % below business as usual. The reduction measures will also result in a significant saving in fuel costs to the shipping industry, although these savings require deeper investments in more efficient ships and more sophisticated technologies than the business as usual scenario. The annual fuel cost saving estimate gives an average figure of US$50 billion by 2020 and of US$200 billion by 2030.34
However, the implementation of these regulations may involve some legal and practical challenges, as unlike many other IMO environmental legal instruments, these regulations have not been adopted unanimously. These regulations create some serious challenges for developing countries, particularly those that voted against them. Usually, an international legal instrument creates implementation challenges for parties. The following section discusses how these regulations may even create challenges for non-parties.
6.3 Legal and Implementation Challenges for Developing Countries
IMO Member States have very divergent interests in respect of energy efficiency measures including Annex-I countries, non-Annex-I countries, developing countries, least developed countries (LDCs), flag States, ship building nations, States having bunker businesses, bunker oil exporting countries, climate change victim countries, and both export and import countries. Presumably, they did not take a similar stance, unlike European countries. Many non-Annex-I States such as Bangladesh, Malaysia, the Republic of Korea, and Singapore voted in favor of the amendment to Annex-VI of the MARPOL Convention; while Brazil, Chile, China, Kuwait and Saudi Arabia voted against it. Only parties to Annex-VI of the MARPOL Convention were eligible to vote. India is not a party to Annex-VI of the MARPOL Convention and was not eligible to vote. However, throughout the negotiation process, India’s position was very similar to that of Brazil, Chile, China, Kuwait and Saudi Arabia.
Some developing countries took a leading role in the negotiation process. For example, China , India and Venezuela played an active role in representing the interest of leading developing countries. On the other hand, Saudi Arabia took a leading role as an oil exporting country. The participation of LDCs, many of which are the main victims of climate change, was very marginal.
It is clear from the voting pattern that some developing countries may not join this new amendment (Table 6.1). The question lies in whether they will be able to avoid the impact of this amendment on their shipping and trade sectors.
Table 6.1
Votes for Amendment of MARPOL Annex-VI for induction of mandatory energy efficiency measures for reduction of GHG emissions
Yes | No | Abstain | Not present in the room |
|---|---|---|---|
Antigua and Barbuda, Australia, Bahamas, Bangladesh, Belgium, Belize, Bulgaria, Canada, Cook Islands, Croatia, Cyprus, Denmark, Estonia, Finland, France, Germany, Ghana, Greece, Ireland, Italy, Japan, Kiribati, Latvia, Liberia, Lithuania, Luxembourg, Malaysia, Malta, Marshall Islands, Netherlands, Norway, Panama, Poland, Portugal, Republic of Korea, Romania, Russian Federation, Saint Kitts and Nevis, Samoa, Serbia, Singapore, Slovenia, Spain, Sweden, Tuvalu, Ukraine, United Kingdom, United States, Vanuatu. Total: 49 | Brazil, Chile, China, Kuwait, Saudi Arabia. Total: 5 | Jamaica, Saint Vincent and the Grenadines. Total: 2 | Iran, Kenya, Syria. Total: 3 |
First, regardless of whether they join the amendment, there will be an impact on their trade. Many countries will implement these regulations in their maritime sector and if there is an increase in the cost of operation, the trade sector of non-party States will also suffer as no country solely relies on its own vessels for the export and import of goods.
Second, vessels flying the flag of non-party States may also have to adhere to these regulations as many coastal and port States that are party to the regulations may implement the amendments within their territory.
As discussed in Chapter 2, Part XII of the United Nations Convention on the Law of the Sea (UNCLOS ) imposes a general obligation to protect and preserve the marine environment.35 UNCLOS has also obligated the State parties to adopt laws and regulations for the prevention, reduction and control of pollution of the marine environment from vessels flying their flag or of their registry. Such laws and regulations shall at least have the same effect as that of “generally-accepted international rules and standards”.36 This indicates that “generally-accepted international rules and standards” is a minimum level of control. In the exercise of their sovereignty within their territorial sea, coastal States may adopt laws and regulations for the prevention, reduction and control of marine pollution.37 The issue of vessel-source air pollution has been handled separately from atmospheric pollution. UNCLOS imposed an obligation on both coastal and flag States to create a national legal framework for prevention of vessel-source air pollution, taking into account internationally-agreed rules, standards and recommended practices and procedures.38 Again, article 222 of UNCLOS imposes an obligation on the States to implement and enforce international rules and standards for the prevention of vessel-source air pollution.39
It is important to determine whether the regulations on energy-efficiency introduced by the amendment can be treated as GAIRS40 under UNCLOS. GAIRS is arguably a standard adopted by a competent international organization. The main issue here is whether these regulations can be treated as laws and regulations for the prevention, reduction, and control of pollution of the marine environment from vessels. This issue was hotly debated in the negotiation process.41 It was argued by a number of delegations “that MARPOL Annex-VI was not the proper legal instrument to include energy-efficiency measures for ships, that such measures were not within its scope, and that the structure of Annex-VI prevented such measures from being effective. In their view, CO2 was not technically a pollutant and therefore had no place in the MARPOL Convention”.42 However, the Deputy Director of the IMO Legal Office opined that “article 2 of the [MARPOL] Convention defines “discharge” as meaning “any release howsoever caused from a ship and includes any escape, disposal, spilling, leaking, pumping, emitting or emptying.” Emissions from inefficient ships’ engines burning low grade fuel would appear to fall squarely within this definition.” In the MEPC meeting, it was agreed by a majority of 60 member States that the MARPOL Convention Annex VI was the appropriate vehicle for enacting energy efficiency requirements for ships.43 The MARPOL Convention is the most important international treaty for the prevention of marine pollution by ships. Inclusion of these energy-efficiency regulations within the MARPOL Convention may arguably call for the acceptance of these regulations as GAIRS . However, persistent opposition from some countries from the beginning may cause problems for the recognition of these regulations as GAIRS .
One of the ways in which a vessel flying the flag of a non-party to the Energy Efficiency Regulations may be bound by the regulations is arguably the coastal State jurisdiction. Coastal States may, in the exercise of their sovereignty within their territorial sea, adopt laws and regulations for the prevention, reduction and control of marine pollution from foreign vessels, including vessels exercising the right of innocent passage. However, such laws and regulations shall not hamper innocent passage of foreign vessels.44 UNCLOS affirms the right to innocent passage for vessels of all countries in the territorial sea of other countries.45 To control ship-generated pollution, a coastal State may enact laws for controlling innocent passage through the territorial sea, provided that its national laws are in conformity with international law.46 Moreover, “such laws and regulations shall not apply to the design, construction, manning or equipment of foreign ships unless they are giving effect to generally-accepted international rules or standards”.47 UNCLOS also grants the coastal states a right and jurisdiction for protecting and preserving the marine environment in Exclusive Economic Zones (EEZ) .48 UNCLOS limits the prescriptive jurisdiction of coastal States in respect of their EEZ to adopting laws and regulations conforming to and giving effect to generally-accepted international rules and standards.49 UNCLOS also provides that, in straits used for international navigation, ships in transit passage shall comply with generally-accepted international environmental rules and procedures.50 A coastal State’s regulations introducing EEDI and SEMP may be justified as implementation of the generally accepted international rules or standards under MARPOL 73/78 Convention.
Port States have the right to prescribe compliance to the Energy Efficiency Regulations as a condition for the entry of foreign vessels. According to UNCLOS article 211(3), States “which establish particular requirements for the prevention, reduction and control of pollution of the marine environment as a condition for the entry of foreign vessels into their ports or internal waters or for a call at their off-shore terminals shall give due publicity to such requirements and shall communicate them to the competent international organization.” MARPOL introduced a system of certification. Most of the ships operating international maritime transportation have to carry some certificates on board as prima face evidence of compliance with the MARPOL Convention. Any country can inspect a ship to verify these certificates while it is voluntarily in its port or offshore terminal. If “there are clear grounds for believing that the condition of the ship or its equipment does not correspond substantially with the particulars of the certificate”, the port State can detain the ship.51 According to the MARPOL Convention, “[w]ith respect to the ship of non-Parties to the Convention, Parties shall apply the requirements of the present Convention as may be necessary to ensure that no more favorable treatment is given to such ships”.52 The Energy Efficiency Regulations also introduced a new certification and survey system within the MARPOL Convention. They introduced a new certificate called the “International Air Pollution Prevention Certificate”.53 However, in relation to the Energy Efficiency Regulations, “any port State inspection shall be limited to verifying, when appropriate, that there is a valid International Energy Efficiency Certificate on board, in accordance with article 5 of the Convention”.54