SUSTAINABE SHIPPING Psaraftis Bar 2019
SUSTAINABE SHIPPING Psaraftis Bar 2019
SUSTAINABE SHIPPING Psaraftis Bar 2019
Sustainable Shipping
Psaraftis, Harilaos N.
Publication date:
2019
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Publisher's PDF, also known as Version of record
Citation (APA):
Psaraftis, H. N. (2019). Sustainable Shipping. Paper presented at Maritime and Port Logistics of the MHCL
2019, Bar, Montenegro.
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SUSTAINABE SHIPPING1
Harilaos N. Psaraftis
Technical University of Denmark, 2800 Lyngby, Denmark
Abstract
The purpose of this paper is to take stock at recent developments as regards sustainable
shipping and discuss prospects for the future. The exposition focuses on recent
developments and draws, to a great extent, from a recent book published by the author.
This debate actually goes even further and transcends maritime transportation. The
COP21 climate change agreement itself was hailed by many as a most significant
achievement, but others were not equally enthusiastic. The decision of American
president Trump to steer the United States away from COP21 has caused disappointment
or even consternation to the broad spectrum of nations that endorsed the Paris
agreement and has injected a new dose of uncertainty as to what may happen to climate
change. Irrespective of the U.S. path, the COP21 agreement upheld the non-inclusion of
international shipping (as well as aviation) within its mandate, something that has
received mixed reviews by the international community. The rationale for the non-
inclusion has been that action in these two sectors is within the mandate of the IMO for
international shipping, and of the International Civil Aviation Organization (ICAO) for
aviation. Some industry circles think this is correct, however environmental groups
perceive this as a sign of inability or unwillingness to act and are not happy about it.
Before COP21, the most sweeping piece of regulation pertaining to maritime GHG
emissions reduction was the adoption of the so-called Energy Efficiency Design Index
(EEDI) by the IMO. This was agreed upon at MEPC 62 in July 2011. This was a no-
1
Presented at the conference Maritime and Port Logistics of the MHCL 2019, Bar, Montenegro, July 1-2,
2019.
1
consensus decision, as adoption was put to a vote in which a group of developing
countries (such as China, India, Brazil, Saudi Arabia, South Africa and others) were firmly
against the agreement. During the same session, the Ship Energy Efficiency
Management Plan (SEEMP) was also adopted.
2011 was also the year the European Union (EU) adopted the new Transport White
Paper, which targets drastic reductions in GHG emissions from all modes of transport in
the EU by 2050. An aggregate 60% reduction vis-à-vis 1990 levels is stipulated. The
target for maritime transportation GHG emissions reductions is 40% and if possible 50%.
Such targets are highly ambitious because the stipulated reductions are non-trivial.
However, and even though a detailed implementation plan has also been proposed in the
White Paper, at least for maritime transportation it is not clear how or if the above
reduction targets can be realized.
There have also been some setbacks. For instance, the discussion on a possible adoption
of Market Based Measures (MBMs) for GHGs, initiated in 2010 at the IMO and entailing
a comprehensive review of some 11 MBM proposals, was finally suspended in 2013.
Relevant discussion was re-channelled toward a system for Monitoring, Reporting, and
Verification (MRV) of CO2 emissions. Progress after COP21 was equally mixed. At the
IMO, a roadmap was agreed in October 2016. The roadmap foresaw the adoption of an
Initial Strategy in 2018 to meet the targets of COP21, which entered into force in
November 2016. The strategy will be validated by actual emission figures gathered
through the IMO’s fuel Data Collection System (DCS) as of 2019. This would then lead to
a final agreement on targets and measures, including an implementation plan, by 2023.
The April 2018 IMO decision was an important link in the chain of events that will lead to
2023.
On the more controversial side, perhaps the most significant development has been the
February 2017 vote of the European Parliament (EP) to include shipping into the EU
Emissions Trading System (ETS) as of 2023, in case no global agreement is reached by
2021, and the subsequent (November 2017) alignment of the EU process with that of the
IMO. The EP vote had raised extensive voices of protest from industry circles such as
ECSA (European Community Shipowners Associations), ICS (International Chamber of
Shipping) and many national ship owner associations. The shipping industry is concerned
that an EU ETS may create significant distortions and obstacles for efficient trade, may
not be compatible with the IMO roadmap, and in fact may not be a good instrument for
reducing GHG emissions.
Given the above, the following questions are relevant: where does shipping currently
stand as regards sustainability, and what are the prospects for the future? At first glance
these questions may look easy to pose. However, we shall see that they are not so easy
to address.
2
Fig. 1: Defining Sustainable Maritime Transport. Source: UNCTAD secretariat,
Sustainable Freight Transport Framework, 2017. Reproduced from Benamara et al.
(2019)
One can see from Figure 1 that a great number of factors are at play as regards
sustainable shipping. In addition, and aside from the considerations of Figure 1, it should
also be realized that sustainability in general, at least as reflected in the United Nations
Sustainable Development Goals (UN SDGs), includes additional issues such as poverty,
hunger, gender equality, education, and several others2. However, for the specific
perspective of this paper, of most interest is the interaction between the environmental
2
For a list of the UN SDGs see https://www.un.org/sustainabledevelopment/sustainable-development-
goals/
3
and the economic dimensions, and how one can achieve a balance between
environmental and economic objectives. Achieving such a balance is important as it
would make no sense for a ship, a shipping operation or a maritime supply chain system
to be performing well environmentally but be non-viable from an economic perspective.
Achieving “win-win” solutions is therefore an indispensable prerequisite for sustainable
shipping. Social criteria such as safety, security, employment, labor conditions, health
and others are also important in their own right.
The rest of this paper is organized as follows. In Section 2 we highlight selected issues in
sustainable shipping. In Section 3 we discuss the way ahead. Finally Section 4 makes
some final remarks.
For an indicative spectrum of relevant issues, we look at Psaraftis (2019a), a book looking
at sustainable shipping that was recently published. Below we provide summaries of the
book contents. We emphasize that the treatment of the subject in this book is certainly
not encyclopedic.
Benamara et al. (2019) identify the linkages between shipping and sustainable
development and highlighting what are the stakes in sustainable shipping, who are the
stakeholders, what are the trade-offs, what are the policy issues, what may be the
obstacles and enablers of sustainable shipping and the role of international institutions
including the IMO and UNCTAD (the UN Conference on Trade and Development).
De Kat and Mouawad (2019) look at the topic of technological solutions for sustainable
shipping. These include air lubrication, wind assisted propulsion and solar power, waste
heat recovery systems, ballast water management systems, more efficient (energy-
saving) engines, more efficient ship hulls and designs, more efficient propellers, hybrid
systems, and others, both for the main engine and the auxiliary engines.
4
Polakis et al. (2019) look at the only regulatory measure thus far in place to reduce GHG
maritime emissions, EEDI. They go over the rationale for EEDI and the factors that are
important. Also they go over related concepts, such as the SEEMP plan and the Energy
Efficiency Operational Indicator (EEOI) and the Existing Vessel Design Index (EVDI).
Possible weaknesses of EEDI and how to improve the EEDI are also presented.
Fjørtoft and Berge (2019) look into ICT (Information and Communication Technologies).
These do not lead to direct environmental benefits, but their smart use can definitely do
so, by increasing the efficiency of the maritime supply chain, improving safety, improving
the load factor, etc. They also review relevant ICT systems in shipping and consider their
impact on improving environmental performance.
Ventikos et al (2019) highlight the most significant attributes of oil pollution in the context
of the sustainable shipping. Τhey present the current legislative framework for the
environmental protection against oil pollution and depict the utility of the implementation
of Risk Control Options (RCOs). Furthermore, the measures of containment of the oil
pollution cost are illustrated along with the incorporation of the environmental risk
evaluation criteria in IMO’s Formal Safety Assessment (FSA). Finally, the authors discuss
feasible ways of achieving a sustainable future without undermining the environmental
integrity.
Mikelis (2019) addresses the recycling of ships, otherwise known as dismantling, ship
breaking, scrapping, and demolition. He also outlines the efforts to implement existing
international legislation to ship recycling, and the development of the Hong Kong
Convention, and provides a critical analysis of the development of regional legislation by
the EU. He finally discusses the combination of voluntary and legislative mechanisms that
will secure the global implementation of minimum standards for safe and environmentally
sound ship recycling.
Zis and Psaraftis (2019) present an overview of the main issues of sulphur emissions and
the legislative framework that seeks to reduce the sulphur footprint of the maritime sector.
It also analyses potential modal shifts towards less efficient land-based modes which may
happen as a result of sulphur regulations, and investigates the related potential economic
damage to ship operators. To that effect, the authors present a methodological framework
that can be used to estimate such modal shifts, as well as to measure the efficacy of
possible measures to reverse such shifts.
Wang et al. (2019) examine, from a tramp ship operator's point of view, how potential CO 2
emission reduction measures impact operational decisions, and their economic and
environmental consequences. Two MBMs are discussed, the bunker levy scheme and
the emission trading scheme, and it is shown that both can be incorporated in a similar
way into a typical tramp ship routing and scheduling model.
Hellsten at al (2019) looked into green liner shipping network design problems, these
being defined as problems in green logistics related to the design of maritime services in
liner shipping with focus on reducing the environmental impact. The authors discuss how
5
to more efficiently plan the vessel services with the use of mathematical optimization
models.
Psaraftis and Woodall (2019) focus on the concept of MBMs to reduce GHG emissions
from ships, and review several distinct MBM proposals that were under consideration by
the IMO. They then move on to discuss the concept of MRV of CO2 emissions and the
distinct mechanisms set up the European Union (EU) and the IMO for MRV. The two
issues are connected as a next possible step after MRV can be an MBM.
Zis (2019) examines the issues associated with a green port operation. These include
technologies such as cold ironing, market based practices such as differentiated fairway
dues, speed reduction, noise and dust abatement, and others. The legislative framework
in various countries is explained and various environmental scorecards are discussed.
He emphasize the implementation of speed reduction programmes near the port, use of
cold ironing at berth, and the effects of fuel quality regulation, considering the
perspectives of the port authority, and the ship operator.
Finally Psaraftis and Zachariadis (2019) look at the way ahead, with a focus on the April
2018 IMO Initial Strategy on how to reduce maritime GHG emissions. They include a
section on alternative fuels, these figuring centrally among candidate measures included
in the IMO Initial Strategy.
The reception of the April 2018 IMO/MEPC 72 decision (IMO, 2018) was almost
universally laudatory. Industry associations including the International Chamber of
Shipping (ICS), the Baltic and International Maritime Council (BIMCO), the European
Community Shipowners Associations (ECSA), the International Association of Ports and
Harbors (IAPH), the European Seaports Organisation (ESPO), but also the European
Commission, the Organisation of Economic Cooperation and Development (OECD), and
several non governmental organizations (NGOs), hailed the result as an important first
step towards the eventual full decarbonization of shipping. There were very few
expressions of dissatisfaction. For instance, the United States, which has backed out of
the Paris Agreement anyway, did not vote for the Resolution. So did Saudi Arabia. Some
environmental NGOs expressed disappointment with the result, and so did some
members of the European Parliament.
6
Realizing that we are currently at a crossroads and the track that will be followed from
now on is subject to many uncertainties, below we make a cursory and non-encyclopaedic
attempt to comment on some additional issues that we think are important as international
shipping moves towards 2050.
1. Eight years after the adoption of the Energy Efficiency Design Index (EEDI), which
is still (together with the Ship Energy Efficiency Management Plan- SEEMP) the
only mandatory GHG emissions reduction measure, there is no doubt that the April
2018 IMO/MEPC 72 decision was a landmark decision. Achieving GHG emissions
in 2050 which are at least 50% lower than they were in 2008 is a substantial and
ambitious target that has to be taken very seriously by all involved.
2. Any hope that substantial GHG reductions can be achieved by improvements on
EEDI is in our opinion grossly unsubstantiated. Making maximum use of EEDI is
included in the Initial IMO Strategy’s short-term measures. However, in a study
conducted for Danish Shipping, Smith et al. (2016) showed, among other things,
that the existence of EEDI vs a scenario in which there is no EEDI as we move to
2050 amounts to a GHG emissions difference of about 3%.
3. The two stated principles that are centrally included in the Initial IMO Strategy (a)
non- discrimination/no more favorable treatment and (b) Common But
Differentiated Responsibilities and Respective Capabilities (CBDR-RC) are in
direct conflict with one another. The latter principle was included so as to please
the group of developing countries (mainly Brazil, Saudi Arabia, India, and others)
who stood and continue to stand firmly behind CBDR-RC. In our opinion however,
if there is a single major obstacle for any progress on maritime GHG emissions
reduction, it is definitely CBDR-RC, and one will need to find a way to circumvent
or even eliminate this principle altogether if any serious progress is to be made.
We obviously realize that doing so may not be politically correct, and the risk is
that the issue may destabilize an already rather very delicate process.
4. One year after the adoption of the Initial IMO Strategy, there is still no sense of
priority among the wide array of candidate measures, all of which are on the table.
Market Based Measures (MBMs) have been put into the medium-term class (to be
agreed upon between 2023 and 2030) but only as a possibility, even though the
Damocles sword of an European Union (EU) Emissions Trading System (ETS) is
looming. There appears to be no sense of urgency for any MBM, not even for
reopening the MBM discussion.
5. Related to this, it is unclear at this time what the EU will do. The European
Parliament decided in November 2017 to align itself with the IMO process on
GHGs but that the European Commission will monitor the IMO process very
closely. Depending on the pace of the IMO process, and in particular if that pace
is not deemed satisfactory, one could not rule out a scenario that the EU
unilaterally moves on early, so as to include shipping within the EU ETS, or at least
do this conditionally.
6. In the event that shipping is included in the EU ETS, which in our opinion would be
unfortunate as it would create distortions, it would be interesting to see what the
IMO would do. A plausible (in our opinion) scenario is for the IMO to reopen the
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MBM discussion soon, at least so as to preempt EU action on ETS. But the political
will to do so seems at this point invisible.
7. That GHG emissions are to reach a peak as soon as possible is a laudable goal,
but raises the obligatory question, how soon. According to the 3rd IMO GHG study
(IMO, 2014), in 2008, the baseline year as far as comparison to target values is
concerned, CO2 emissions of international shipping were estimated at 920.9 million
tonnes, and declined to 795.9 million tonnes in 2012, even though they reached
849.5 million tonnes in 2011. As of yet, and pending the fourth IMO GHG study
(which has been recently advertised and will be finalized in 2020) there is no
consensus on GHG emissions figures after 2012. And even the above figures are
based on the “bottom up” (activity based) method, whereas emissions figures
based on the “top down” (fuel sales based) method are significantly lower (624.9
million tonnes in 2008 versus 648.9 million tonnes in 2011- there was no top down
estimate for 2012). There should certainly be consensus on which method is used
(“bottom up” numbers are 30% to 50% higher than “top down”), plus consensus on
when the GHG peak is expected to occur. Barring any major world trade slowdown,
it seems self-evident that for any GHG peak to be reached, some measures will
have to be implemented- no peak will happen by itself.
8. The same is true as regards consensus on how “transport work” figures are
defined. These are important so as to check the target of at least 40% CO2
emissions per transport work reduction in 2030 versus 2008 levels (and at least
70% by 2050). The 4th IMO GHG study is expected to estimate the 2008 transport
work and CO2 emissions per transport work figures.
9. (Mandatory) “speed reduction” (or, speed limits) is included as a potential short
term measure, even though the term “speed optimization” was added so as to
make the measure more palatable to Chile and Peru, who are concerned about
carrying cherries to China. Speed limits may seem at first glance like a reasonable
measure, however they are plagued by various deficiencies and would create
distortions and other problems. Still, it is a victory for the speed limit lobbyists
(Clean Shipping Coalition and others) that this measure is now on the table at the
IMO, only a few years after the IMO previously rejected it (at MEPC 61 in 2010).
There has been serious lobbying for the speed limit measure recently by CSC and
other advocates (which revently included France, Greece and more than 100 ship
owners), however MEPC 74 did not endorse such measure. Given that it did not
reject it either, the measure is still on the table.
Lack of prioritization among measures being an observation, and in the quest to meet the
2030 and 2050 targets, is there any measure that should receive priority? In our opinion
there is. This is to impose a significant bunker levy at a global level. By significant we
mean not 10 or 20 USD per tonne, as is being occasionally contemplated by industry, but
at least one order of magnitude higher.
To put it very simply, if society truly does not like fossil fuels, or any other fuel that
produces GHGs (and this includes LNG), and cannot, for obvious reasons, mandate their
outright ban, society should at least try to implement the “polluter pays” principle by
internalizing (even partially) the external costs of GHGs. The only way to do so is by
8
putting a significant price on the fuels that produce these GHGs. Conversely, and so long
as these fuels are affordable, there is no doubt that they will be used. All the debate on
LNG, hydrogen, and other alternative fuels (see Bouman et al. (2017), DNV GL (2018),
OECD (2018), and Psaraftis and Zachariadis (2019), among others) critically hinges upon
the economic dimension: we would like to know not only how much GHGs these
alternative fuels would avert, but also what is the cost of producing and using them.
Conversely, and barring a technological quantum leap, for as long as these alternative
fuels are not viable economically, they will not be used.
An important parenthesis here is that, and in order to avoid modal shifts to land-based
modes, such a levy should not be confined to the maritime mode, and care should be
taken to prevent modal shifts which could increase overall GHG levels. This is particularly
true not only for short sea shipping (SSS) scenarios but also for longer distance deep sea
services, especially now that the Belt and Road Initiative (BRI) is being pursued by China
so as to link Asia and Europe.
A substantial bunker levy would induce technological changes in the long run and
logistical measures (such as slow steaming) in the short run. In the long run it would lead
to changes in the global fleet towards vessels and technologies that are more energy
efficient, more economically viable and less dependent on fossil fuels than those today.
A levy would also raise monies that could be used for “out-of-sector” GHG emissions
reductions, aid to Least Developed Countries (LDCs) and Small Island Developing States
(SIDS), and other purposes.
However, the prospects of such a development on MBMs are, as things stand, very slim.
Very few stakeholders seem to be interested in it. For a comparison between speed limits
and a bunker levy see Psaraftis (2019c).
In a paper that was published a few months before the April 2018 IMO decision (Psaraftis,
2018), the following statement was made: “.. in spite of much talk about the maritime
industry’s commitment toward serious GHG emissions reductions, it is fair to say that
such reductions are, as things stand, only a wish at this point in time.” Based on what we
have seen since then, including MEPC 72, 73 and 74, we see no significant reason to
retract the above statement. It is true that the April 2018 IMO decision has opened a new
door and maybe created some momentum. However, substance-wise and in order to
guarantee significant GHG emissions reductions in the future, one would have to abandon
the BAU stance that still seems to pervade much of what is done in the maritime industry
today and not be afraid to take bolder steps, even if these entail some political cost.
4. Final remarks
Two last issues that are relevant on the subject of sustainable shipping are nuclear marine
propulsion and how the various emissions reduction options may impact climate change,
and more specifically the mean temperature of the planet.
9
Nuclear marine propulsion is currently confined to naval vessels and ice-breakers and
there is nothing a priori obvious that would preclude its consideration in commercial
shipping. In fact a distinct advantage of nuclear propulsion is the complete elimination of
GHG and other operational emissions. However, issues such as safety, disposal of
radioactive waste and economic viability are also important. Proponents of the nuclear
option argue that such issues have been resolved.
It is noted here that the nuclear option is not included (at least as of yet) as one of the
candidate measures postulated by the IMO in their April 2018 decision. To be more
precise, the nuclear option is not explicitly excluded by the IMO as a potential measure,
however this option is not visible in any of the current discussions on alternative (low
carbon or zero carbon) fuels to reduce maritime GHG emissions. This is so in spite of
the fact that a GHG emissions reduction goal of at least 50% would seem to encourage
a stance not to exclude any solutions, however radical these solutions may seem.
However, political considerations, especially after the Fukushima accident in Japan, seem
to be a factor that currently weighs against the use of this option in commercial shipping.
Whether or not this exclusion continues as we move towards 2050 is not clear at this
point in time. Readers interested in the topic are referred to the work of the Royal
Academy of Engineering3, of Lloyd’s Register4, and of Hirdaris et al. (2014), among
others.
The final issue is how various emissions reduction options may impact climate change,
and more specifically the mean temperature of the planet. This is true not only as regards
GHGs, but also as regards other emissions. For instance, the anticipated drastic (but
largely unknown) reduction of maritime SO x emissions as soon as the global 0.50%
sulphur cap kicks in as of 1/1/2020 will reduce the “radiative cooling” effect caused by
SOx emissions in the atmosphere. As such, it may increase global warming. But what the
increase will be is basically unknown (for a discussion of the relevant issues see Eyring
et al. (2010) and more recently Gratsos (2018), among others). In addition, producing
vast quantities of low sulphur fuels would certainly require some energy, which, if not from
renewable or nuclear sources, would also increase global CO2. Again, the impact of this
development on climate change is by and large unknown.
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3
https://www.raeng.org.uk/news/news-releases/2013/July/a-sea-of-options-for-future-ship-propulsion
4
https://www.lr.org/en/nuclear-power/
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