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Is Shipping's Green Image Threatened?

Thursday 21st February 2008

Since the golden age of the Tea Clippers, the transport of resources, goods and materials by sea has been viewed as a relatively environmentally friendly method of distributing goods around the world. This fragile public perception is at risk of being shattered by a recent report from the UN's Intergovernmental Panel on Climate Change (IPCC) that has been prematurely received and reported on in the Guardian.

The report is stated to reveal that global merchant shipping is responsible for nearly 4.5% of the world's CO2 emissions, more than double previous governmental and industry estimates that ranged between 1.8% and 2%. This could mean that annually the world's merchant shipping fleet is responsible for 1.12 billion tonnes of CO2 emissions as opposed to an original estimate of 400 million tonnes.

The findings of the IPCC's report cast doubt over the viability of European targets for tackling global warming, which have previously excluded any figures for merchant shipping emissions. No doubt, once EU leaders have been given the opportunity to read the IPCC report, they will have to redraft their estimates for CO2 emissions as well as their strategies for meeting the CO2 emission targets. In the UK the key piece of draft legislation that aims to meet the EU targets is the Climate Change Bill. To date shipping has not been included in this Bill, which seeks to create an "economically credible emissions reduction pathway" by reducing the UK's CO2 emissions by 60% compared to the 1990 baseline.

However, it is not fair to say shipping has not been covered by the Bill, as Clause 15 makes provisions for the Secretary of State to include or exclude international shipping and aviation emissions in the targets. This will give the UK Government the power it needs to stop those foreign vessels that are less CO2 efficient from skewing the UK's "emissions reduction pathway" by excluding those vessel's emissions from the UK's figures. The IPCC's report makes this power far more necessary, but the question still remains as to what will happen to those international vessels emitting CO2 in UK territorial waters. There may be reluctance from the UK Government (and perhaps the EU) in dealing with shipping emissions as it has not been addressed by the Kyoto protocol. However, if the shipping industry is to be dealt with in the same way as aviation (which is also not part of the Kyoto targets) then shipping may soon find itself under the national and international spotlight.

Many may argue that the ability of merchant vessels to carry vast amounts of cargo offsets the high CO2 omissions. Some suggest that transporting freight by sea is more environmentally friendly than transporting it by air or road. This may be true to some extent, but initial reports from the IPCC document suggest that the eco-friendly image of sea-freight could be in jeopardy. Along with increased trade with China, one of the reasons for this is the "bunker" oil used to fuel large merchant vessels. This is the dense, heavy oil left over as a by-product of refining higher grade fuels and is reported to be the cheapest, dirtiest fuel available.

While the engines that burn bunker oil have become approximately 20% more efficient over the last 20 years the growth in the merchant fleet has, however, counteracted this increased efficiency leading to the high CO2 emissions. Further, and perhaps most worryingly for global leaders, is the predicted further expansion of the global merchant fleet: some forecasts predict the expansion in sea-freighted world trade will lead to a 30% increase in emissions over the next 12 years, resulting in a total CO2 emission of 1.45 billion tonnes.

As with global warming generally, a global approach to the reduction in emissions is the only sensible solution. But the greatest problem will be achieving consensus between the shipping nations as to a correct and fair approach to CO2 emission reduction. Certainly, China as one of the world's largest economies will be vehemently opposed to measures that will restrict its current trade practices.

What can be done? The global economy will suffer if sea freight is reduced and the transportation of cargo around the world has to continue to expand to meet the world's growing needs. The answer to reducing the impact of CO2 emissions from shipping, the 5th largest single man-made source of CO2 emissions, must lie in improved technology and efficiency. The technology is already in place to use scrubbers to strip emissions from ship exhausts (as used in some Dover to Calais P&O ferries), but in an ageing world fleet these will be hard to implement. The most pragmatic solution currently available is to place restrictions on the registration of new vessels unless they incorporate features limiting CO2 emissions such as CO2 scrubbers and/or regulations are put in place to have scrubbers installed on refit. The weight of a vessel is directly proportional to the amount of fuel it uses, therefore, as construction and material technology develops the build weight of a vessel can be reduced, thus leading to a reduction in fuel consumption and ultimately CO2 emissions. However, this is often counteracted by the relatively lighter, but bigger, ships carrying extra cargo.

As mentioned above, bunker fuel is one of the lowest grade fuels available; logically a solution to lower CO2 emissions is to use alternative fuel. While biofuels and biodiesel are practical solutions, if they are produced and used at the levels required for world shipping, the environmental offset may not be so beneficial. Research is already being carried out at Southampton University on powering ships using hydrogen fuel in a project called "H2Oceanjet 600". While hydrogen fuel in itself cannot be considered environmentally-friendly (because of the energy and emissions required to produce it) it is innovations of this nature that will almost certainly form a part of the CO2 emission solution.

Regardless of the methods used to reduce CO2 emissions it is inevitable that the costs of implementing them will be shared across the industry, thereby increasing the cost of transporting freight by sea. This, however, is not a cost that will be unique to the shipping industry as the availability of natural resources declines so transportation costs in general will increase.

As already mentioned, the regulation of CO2 emissions nationally is relatively poor. Globally, it is even more difficult to police the world's oceans. However, Annex VI of the International Convention for the Prevention of Pollution from Ships 1973/1978 (MARPOL) came into force internationally on 19 May 2005. Resolution 8 of MARPOL tasked the Marine Environmental Protection Committee (MEPC) with the job of considering the viability of CO2 reduction strategies. At the end of 2007 the MEPC (in the UK with the assistance of the Marine and Coastguard Agency MCA)) produced Interim Guidelines for Voluntary Ship CO2 Emission Indexing for Use in Trials. This is nothing more than a voluntary trial to test methods for recording/indexing the amount of CO2 produced by a vessel. It is sold to ship operators as a method of monitoring the efficiency of a vessel and hence its cost-efficiency. Results are yet to be reported from this exercise, but no doubt they will form the basis of any national/international regime to regulate CO2 emissions. To date, no other compulsory international regulations are in place to control CO2 emissions.

Ashfords LLP is regulated by the Solicitors Regulation Authority. The information in this article is intended to be general information about English law only and not comprehensive. It is not to be relied on as legal advice nor as an alternative to taking professional advice relating to specific circumstances.


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