Transport CommitteeWritten evidence from Teekay Shipping (SES 21)
Teekay welcomes this opportunity to present written evidence on the on the implementation of IMO and EU regulations on sulphur emissions by ships.
Teekay Corporation provides a comprehensive set of marine services to the world’s leading oil and gas companies, helping them seamlessly link their upstream energy production to their downstream processing operations. With a fleet of 152 vessels, offices in 16 countries and approximately 6,400 seagoing and shore-based employees, Teekay transports approximately 10% of the world’s seaborne oil and its reputation for safety, quality and innovation has earned it a position with its customers as The Marine Midstream Company.
A summary of our main points:
The International Maritime Organization is the appropriate body to lead regulations and rules for international shipping. The UK Government should continue to support the IMO and the shipping industry by aligning with IMO regulations.
The Government should assess the potential for unintended modal shift encouraged by future low sulphur regulations.
To support compliance with MARPOL Annex VI sulphur reductions, the Government should conduct a review of fuel availability prior to 2015 and encourage the refining industry to ensure adequate supplies of low sulphur fuel.
Governments should continue to promote sulphur reductions in global residual bunker fuel supplies.
The market for exhaust gas cleaning systems (scrubbers) requires further development and is an important option for vessels to meet future low sulphur limits.
Governments should be promoting cold ironing options since this reduces emissions near populated areas where emissions have the greatest health impacts.
1. Roughly 90% of world trade is carried by the international shipping industry. To continue providing this service, the shipping industry depends on a regulatory framework that is clear and common across all port nations. The best means to achieve this is through the continued work of the International Maritime Organization to bring all member states together to adopt common standards and regulations for international shipping.
2. The sulphur reductions agreed to under MARPOL Annex VI provide certainty of future reductions in sulphur limits and associated sulphur oxide air emissions while providing common international regulations and compliance mechanisms. The UK Government should continue to support and align their regulations with the IMO and MARPOL Annex VI. To do otherwise undermines the IMO and reduces the ability of the international shipping industry to plan for and comply with stricter sulphur limits.
3. Complying with future MARPOL Annex VI sulphur limits will increase the costs of shipping. At this time, the only feasible compliance options are the operation on low sulphur fuels (low sulphur gas oil, diesel oil, or LNG) or the installation of exhaust gas scrubbers, both of which will increase operating and/or capital costs. Because of this increase cost, the cost-effectiveness of shipping may decline relative to land-based transport options. The UK Government should assess the potential for modal shift to avoid unintentionally shifting trade toward less energy efficient land transportation systems. This modal shift is unlikely to affect long-haul transport, but may occur in short-sea and domestic marine trade. Relevant research on the potential for modal shift is summarized in submissions MEPC 62/4/17 and MEPC 62/4/19 to the 62nd session of the Marine Environmental Protection Committee of the International Maritime Organization.
4. MARPOL Annex VI requires ships to use fuels with 1% sulphur content as of 2010 and 0.1% or less as of 2015 while operating in Emissions Control Areas. While supplies of 1% compliant fuel have been adequate, the requirement for 0.1% sulphur fuel along with the expected growth of Emissions Control Areas creates a significant fuel availability concern in 2015. The supply of sufficient quantities of low sulphur fuel is critical if the shipping industry is to meet Annex VI sulphur limits. Without adequate supplies of fuel, reduction requirements cannot be met. Therefore, the UK Government should conduct a review of fuel availability before 2015. The Government should also support and encourage the refining industry to make necessary investments to produce larger quantities of low sulphur fuel.
5. Meeting the current 1% fuel sulphur limit in Emissions Control Areas can be achieved by burning low sulphur residual (heavy) fuel oil. However, ships are occasionally being supplied with low sulphur marine gas (LSMGO) oil or diesel oil instead due to regional unavailability of heavy fuel oil with 1% sulphur or less. This is environmentally counter-productive as LSMGO requires more energy to produce, has lower density and thus requires more fuel consumed onboard, and has an emissions profile with higher fine particulate matter emission compared to heavy fuel oil. In general, the Government must influence the oil industry to produce residual fuel with lower sulphur content. This will reduce global average bunker fuel sulphur content and reduce global marine sulphur oxide emissions.
6. Given concerns of fuel availability starting in 2015, the shipping industry needs to have alternatives if the industry is to meet Annex VI requirements. This includes the option of using exhaust gas cleaning systems. Unfortunately, the market for exhaust gas scrubbers is under-developed, with only a few full scale pilot installations in existence within the entire industry. The Government should therefore be supporting the development and testing of exhaust gas cleaning technology through support for pilot installations and technology development.
7. The UK Government should also have a more active role in promoting “cold ironing”, especially in large ports in or near high population density areas. Cold ironing is effective at reducing emissions in and near ports where there is the greatest impact on human health. However, there are very few ports worldwide with cold ironing facilities, and none that serve large tanker vessels. The Government should investigate strategies to promote and require ports to establish cold ironing infrastructures.
October 2011