Stricter shipping emission controls could save industry €9 million: study


Tightening a Commission proposal to reduce shipping emissions would bring greater CO2 cuts as well as lowering operational costs for shipowners by up to €9 million a year, according to a new study published today (9 January).

The shipping industry is currently the only EU transport sector that has no greenhouse gas emissions reductions obligations even though the sector is responsible for 3% of global CO2 emissions. These are expected to grow by 40-50% by 2020, according to the green NGO Transport and Environment (T&E).

But the Commission has been bruised by international battles over its scheme to bring aviation into the Emissions Trading System (ETS) and last summer, only proposed a regulation on the monitoring, reporting and verification (MRV) of CO2 emissions from maritime transport.

Campaigners thus want the European Parliament to strengthen the proposal by taking the new study into account.

“As the shipping industry pushes back against new laws to make shipping greener, this study shows that it makes perfect environmental and economic sense to use modern technologies and consolidate reporting requirements into one regulation. We therefore call on the European Parliament to strengthen the proposal to ensure that all harmful pollutants can be more effectively controlled,” NGO Seas at Risk said.

Three expert committees will have to vote on the MRV proposal in the coming month, starting with the industry, research and energy committee on 9 January.

Maritime policies are known to be at the heart of the Greek presidency of the Council raising hopes that stronger focus will be placed on the proposal, liberal MEP Theodoros Skylakakis told EURACTIV.

“Given that maritime policies are one of the main priorities of the Greek presidency and the MRV is an important legislative initiative in this respect, I have already seen an intention, in terms of scheduling, to move quickly on the file with a view to have a first reading agreement, if possible, before the end of this legislature," he said. "In terms of substance, I expect to see the Council intending to find a satisfying compromise on the file that could conciliate commercial interests with environmental concerns in a simple legislative framework.”

Reducing operational costs

Concretely, the Commission's MRV proposal would give large ship owners the choice between four different monitoring mechanisms on voyages to, from and between EU ports:

  • Bunker Fuel Delivery Note (BDN) and periodic stock takes of fuel tanks;
  • Bunker fuel tank monitoring on board;
  • Flow meters for applicable combustion processes; and
  • Direct emissions measurements.

The first method is manual (delivering manual notes), the second can be either manual or electronic, the last two are automated.

While the first two methods are cheaper in terms of investments costs, the flow measurement and direct emissions monitoring systems give more accurate fuel consumption estimates, according to the T&E study produced by the environmental consultancy CE Delft.

“We find that if ship owners invested in more accurate fuel consumption monitoring methods they would indeed have to incur higher investment costs but on the other hand their operational MRV costs would decline," the new study says.

This is because monitoring and reporting can often be carried out electronically, using automated fuel monitoring or continuous emissions monitoring, the paper says, and savings on operational MRV costs would amount to €5-€9 million annually.

If fuel consumption is monitored using the first two methods, the EU regulation would increase stock taking. Fuel flow meters on the other hand have the advantage of directly measuring fuel consumption without tank stock data. Because they are automated, they bear few extra costs and are more reliable, the study finds.

Direct emission measurement is expected to be the cheapest option, “since monitoring is fully automated and the most accurate."

Reducing environmental costs

Environmental activists warn that if emissions from ships were reported as a country, they would be the 8th largest emitter. But analysts also say that the Commissions’ MRV proposal fails to tackle the problem seriously.

The EU executive expects to reduce maritime CO2 emissions by 2% with its legislative proposal.

But CE Delft does not believe that the MRV proposal will significantly cut emissions because it does not “require accurate measurement of fuel consumption or the reporting of indicators that are specific enough for charterers to use in their evaluation of ships.”

The reports' authors note that the most fuel efficient shipping companies have relied on fuel flow monitoring.

Advanced monitoring technologies would also be able to take other pollutants into account, such as sulphur oxides and nitrogen oxides, which are not part of the Commission’s proposal, yet are a big part of air pollution caused by the shipping industry.

The study highlights that “investing in these modern systems could also lower the cost of complying with international shipping air pollution standards, such as the 2015 sulphur limits".

The shipping industry supports lower emissions targets but says there are not enough low-sulphur fuels being produced to meet today's needs. Meanwhile, the Roundtable of International Shipping Associations says steady improvements in efficiency, ship design and the development of alternative fuels will lead to more environmentally-friendly shipping.

Theodoros Skylakakis, a Greek liberal MEP (ALDE) who is a member of the European Parliament's Environment Committee, said: “The MRV proposal is welcome as the first step for a European approach to develop emission reduction policies for the maritime sector consistent with the overall climate, air pollution and human health protection policies. There is, however, room for improvement concerning the scope of the regulation.

"I believe that we should broaden the scope by extending the application of the regulation to all ships above 400GT (currently 5,000GT in the Commission proposal) in order to include all relevant emitters. This will make the proposal more consistent with existing international rules and will align it with discussions at the IMO; therefore the EU approach will be closer to a likely future international MRV framework. Finally, while it is important to ensure that this Regulation covers maritime emissions as coherently as possible, it is also of crucial importance to limit the implementation costs, the administrative burden and to safeguard commercial interests and fair competition.”

The European Commission proposed a regulation in June 2013 which will require owners of large ships using EU ports to monitor and report the ships' annual carbon dioxide (CO2) emissions.

Emissions from the international maritime transport sector today account for 3% of global greenhouse gas (GHG) emissions and 4% of EU GHG emissions. Without action they are expected to increase significantly in the future, in line with expected increases in trade volumes between all continents.

Such growth would undermine efforts being undertaken in other sectors to reduce the EU's overall GHG emissions.

  • 9 January: Presentation of the CE Delft study in the European Parliament
  • 9 January: Vote on the proposal in the Industry, Research, Energy Committee of the EP
  • 21 January: Vote on the proposal in the Transport Committee of the EP
  • 12 February: Vote on the proposal in the Environment Committee of the EP

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