Eastern Mediterranean Region

MoS Master Plan Study

ANNEX VII

Environmental issues

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7.1 Ships air emissions

Recently (may 2007) a study for the Commission has explored the cost effectiveness of
measures with different ambition levels to reduce air emissions from maritime
transport. Technologies exist to reduce emissions from shipping beyond what is currently
legally required and the study has identified a set of emission control measures that are
technically available and that could – if fully applied – reduce by 2020 80% of the SO2
emissions from international shipping, and almost 90 % of the NOx emissions for an yearly
total costs estimated at 5.5 billion €. The study (“Analysis of Policy Measures to Reduce Ship
Emissions in the Context of the Revision of the National Emissions Ceilings Directive”) has
explored several packages of measures that could reduce emissions at lower costs, including
combinations of seawater sulphur scrubbing, lower sulphur content in residual oil, humid air
engines for new built ships, slide valves retrofitting in existing ship engines, as well as the use
of selective catalytic reduction (SCR). Marginal costs of these measures are well below the
costs of the measures for land-based sources that have been proposed by the Thematic
Strategy. The cost-effectiveness of this kind of measures has been compared to those for land-
based sources, considering the impacts that emission reductions from shipping have on human
health and natural environment, considering the proximity of the location of emissions to the
receptor areas that need to be protected against pollution The study demonstrates that limiting
air pollution from shipping reduces the necessity to further control emissions from land-
based sources and provides important cost savings in achieving air quality targets in
Europe.

Assuming the ships air emissions problem is addressed adequately by these measures on a
continuous basis over the next years then the current – and expected future – negative
comparison on these emission factors with road transport may be ameliorated. An advantage
of road sector derive from the shorter amortization period of road vehicles than sea-going
vessels so that innovations to improve environmental performance are more rapidly
implementable by the road sector.

7.2 EU Directive 2005/33 on sulphur in marine fuels

One of main initiatives taken in the field of ships air emission is represented by the Directive
proposing reductions in the sulphur content of marine fuel oils (Directive 2005/33/EC of
the European Parliament and of the Council of 6 July 2005 amending Directive 1999/32/EC).

Marine fuel contained on average 2.7%, or 27,000 parts per million (ppm), of sulphur,
compared with petrol for cars, which starting from 2007 should have 10 ppm sulphur content.
As part of its ship emissions strategy, the Commission presented in November 2002 a
proposal to reduce the sulphur content of marine fuels. The main provisions finalised are the
following:

ƒ a 1.5% sulphur limit for fuels used by all ships in the Baltic Sea, from 19 May 2006,
and the North Sea & Channel, from autumn 2007

ƒ the same 1.5% sulphur limit for fuels used by passenger vessels on regular services
between EU ports, from 19 May 2006

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ƒ a 0.1 % sulphur limit on fuel used by inland vessels and by seagoing ships at berth in EU
ports, from 1 January 2010.

Due to the nature and timing of the EU legislative process, and the IMO’s tacit amendment
procedure, the final application dates for 1.5% fuel sulphur limits in SOx Emission Control
Areas under Directive 2005/33 are not precisely aligned with those in the IMO’s air pollution
convention, MARPOL Annex VI.

The Parliament has negotiated a stronger review in 2008, requiring the Commission to
consider a second-phase limit of 0.5%, depending on progress at IMO.

Contribution made by ships to sulphur deposition Contribution made by ships to sulphur deposition
2000 (in percent) 2020 (in percent)

Source: Susanne Ortmanns - CCB Annual Conference 2007-05-11

The Parliament has also tightened requirements on the availability of low-sulphur fuel and the
use of abatement technology, and introduced an incentive for ships in port to plug in to
clean shore-side electricity.

Significant human health benefits are foreseen thanks to the implementation of the new
measures (e.g. reduction of the incidence of asthma, bronchitis and heart failure, at least 2,000
fewer life years lost every year in the EU year through long-term exposure, 750 fewer deaths
from short-term exposure, and 300 fewer hospital admissions for respiratory illness) and a
reduction of acidification, which continues to destroy forests and lakes in northern Europe
where sulphur deposition causes harmful leaching of acidity, is expected.

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7.3 Shore-side electricity

Another interesting initiative aiming at the reduction of ship air emissions is represented by
the “Recommendation on the promotion of shore-side electricity for use by ships at berth in
EU ports” adopted by the EU Commission in 2006. Shore-side electricity means providing
electricity to ships at berth in ports from the national grid instead of ships producing
electricity using their own engines. This eliminates local air and noise emissions from ships'
engines while at berths in port. The Recommendation is not legally binding and its main
objective consists in the promotion of shore-side electricity as a means of abating ships
emissions in EU ports, particularly in populated areas which suffer from poor air quality. It
aims to do this by providing information on practicalities, benefits and costs, by calling for
harmonized international standards, and by highlighting the possible use of electricity tax
reductions as an incentive to ship operators to use shore-side electricity. In general the
benefits and costs of shore-side electricity vary significantly depending on the existing
configuration and location of the port, berth and ship. This means that its cost-effectiveness
needs to be studied on a case-by-case basis, and that direct reduction of marine engine
emissions should continue to be pursued. The Impact Assessment accompanying the
Recommendation provides an illustration of the benefits that could be achieved through a
larger use of this tool within the EU. The analysis is based on 500 berths assuming medium-
sized engines. One important factor influencing the benefits is the sulphur content of the fuel.
Community law sets tighter limits on the content of sulphur in fuel used at berth in most
conditions from 2010. Therefore illustrations are provided for fuel sulphur content of 2,7 and
0,1 %. It is shown that the use of shore-side electricity would realise total monetised benefits
in a range of between EUR 252 and 708 million per annum in case of 2,7 % sulphur fuel use
and between EUR 103 and 284 million per annum in case of 0,1 % sulphur fuel
implementation. These reflect improved human health and reduced material damage as a
result of reductions in air pollutant emissions. Switching to shore-side electricity will also
result in other benefits that are not included in these figures. It will reduce carbon dioxide
(CO2) emissions by over 50 %, carbon monoxide (CO) emissions by about 99 %, and nitrous
oxide emissions (N20) by over 50 %. It will eliminate vibrations and noise from auxiliary
engines, which has been measured at 90-120 dB in close proximity and improve maintenance
conditions for the ships’ engineers. In environmental terms, shore-side electricity achieves
emission reductions well beyond those achieved from switching to 0,1 % sulphur fuel at
berth (as Directive 2005/33/EC requires from 2010), particularly for NOx and PM. It
therefore merits particular consideration in ports where ship NOx and PM emissions are
contributing to local air quality problems, such as exceedances of ambient air quality limit
values for ozone and particles. In general the analyses suggest that. In economic terms, shore-
side electricity should generate savings compared to low sulphur fuel for new-build ships
regularly visiting the same ports, especially, but not only, if electricity tax reductions are
offered as allowed under Directive 2003/96/EC. Member States and local authorities might
wish to consider other means to encourage ports to invest in shore-side electricity
infrastructure and to ensure its use.

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Emission reduction efficiencies

Source: Service Contract on Ship Emissions: Assignment, Abatement and Market-based

Instruments

7.4 The Annex VI of MARPOL 73/78 Convention

Also Annex VI (Prevention of Air Pollution from Ships) of the Marine Pollution Convention,
MARPOL 73/78, of the International Maritime Organization (IMO) deals with air pollutant
emissions from. This document contains provisions on Sulphur Oxide Emission Control
Areas (Baltic Sea, North Sea & English Channel) and nitrogen oxide emissions standards for
ships' engines. The EU aims at implementing the SOx Emission Control Areas set out in
Annex VI, and at pressing for tighter NOx standards. The Commission also urges Member
States to bring forward ratification of this important international instrument. As far as the
East Mediterranean Area is concerned, Italy, Cyprus, Greece, Slovenia, Bulgaria, Croatia and
Romania implemented the Annex VI to the MARPOL 73/78 convention (please refer to
relevant Chapter in DELI 1).

The IMO decided to revise the current MARPOL Annex VI and in support of this EMSA
(European Maritime Safety Agency) has been requested to provide technical assistance to the
European Commission in this process, as in the implementation of the Directive 2005/33/EC.

7.5 Ship-based abatement techniques

The air emission problem of short sea shipping is also being addressed by industry via ship-
based abatement techniques that, provided they have no adverse effect on ecosystems and

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are developed subject to appropriate approval and control mechanisms, can provide emission
reductions at least equivalent to, or even greater than, those achievable using low sulphur fuel.

An example of such an initiative is represented by the ECOMOS Project. The project is

promoted by an Italian Consortium composed by FINCANTIERI (shipyards), CETENA
S.p.A. (shipping technology institute), RAM. The project is focused on the maritime
transportation effect over the marine environment, and on the reduction of funnel damaging
emissions effects To this purpose ECOMOS aims at working over the operating fluids acting
in the following directions:

ƒ Upstream the combustion, through an adequate treatment of the used oil fuel

ƒ Downstream the combustion process and the energetic recover, through an exhaust gas
cleaning, before their emission

In particular, the project is dedicated to the short-range transportations, like the situation of
the Motorways of the Sea, to minimize the impact of similar transportations over the
ecosystem, transforming this ships exercise in something environmental-friendly. The project
objective is to realize an integrated fall system : currently some devices able to the reduction
of nocive emissions (relative to just one pollutant) are experimentally installed on any ships.
An integrated system would instead be able to knock down the three main pollutants
(SOx, NOx and particulate). The research aspires to the development of a prototype of this
integrated system, with perspective of an easy installation on new construction ships and on
older ships, already in exercise over the motorways of the sea. Furthermore the new system
shouldn’t significantly modify the vessel performance.

Another interesting initiative is the I.P. HERCULES (Integrated Project: High Efficiency
R&D on Combustion with Ultra Low Emissions for Ships), a large scale cooperative R&D
project supported by the European Commission within the Sixth Framework Programme and
the Swiss Federal Government (BBW & BFE). The Consortium includes engine makers,
component suppliers and equipment manufacturers, compounded by renowned universities
and research institutions, as well as, world-class shipping companies.

The Project aims at developing new technologies to drastically reduce gaseous and
particulate emissions from marine engines and concurrently increase engine efficiency and
reliability, hence reducing specific fuel consumption, CO2 emissions and engine lifecycle
costs. Successive objectives for improvements to be available onboard ships are set for the
years 2010 and 2020. These objectives will be attained through interrelated developments in
thermodynamics and mechanics of "extreme" parameter engines, advanced combustion
concepts, multistage intelligent turbocharging, "hot" engines with energy recovery and
compounding, internal emission reduction methods and advanced aftertreatment techniques,
new sensors for emissions and performance monitoring, adaptive control for intelligent
engines.

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Source: IP HERCULES Project

Another relevant project is the METHAPU, supported by funding under the Sixth Research
Framework Programme of the European Union, which focuses on validation of renewable
methanol based auxiliary power system for commercial vessels. The consortium consists of
Wärtsilä (Finland), Wallenius Marine (Sweden), Lloyd's Register (UK), University of Genoa
(Italy) and Det Norske Veritas (Norway).

This specific targeted research project aims to validate methanol technology on board a cargo
vessel involved in international trade. In addition to that, another major aim is to innovate
necessary technical justifications for the use of renewable methanol on board commercial
vessels in order to support the introduction of necessary regulations to allowing the use of
methanol as a marine fuel. The specific components of the technology to be validated are
methanol fuel bunkering, distribution, storage system and methanol consuming solid oxid fuel
cell (SOFC) unit.

Within the Workshop on the revision of MARPOL Annex VI that took place in Lisbon in
2007 (see the section “The Annex VI of MARPOL 73/78 Convention), several proposals have
been made by different actors with the aim of reducing ships’ air emissions. For example
INTERTANKO (International Association of Independent Tanker Owners) believes that a
wide use of MDO (Marine Diesel Oil) and the building of engines designed for use of MDO
only will accommodate further emission reductions. Then implementation of MDO would
allow, amongst others, for

ƒ CO2 emissions lower than from de-sulphurisation of residuals

ƒ Lower CO2 emissions with MDO due to lower fuel consumption by ships

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ƒ Lower CO2 emissions with MDO since no need to heat residual fuels prior treatment &
injection

ƒ A global standard for at sea, coastal and at berth operations

7.6 The UNITE Project

The UNITE project (2003) assessed marginal environmental costs for a number of specific
routes in urban areas and important inter-urban relations, covering both passenger and goods
transport. All modes were covered, and a broad range of vehicle types was considered for
which costs related to the emission of air pollutants, greenhouse gases and noise proved to
be relevant and quantifiable cost categories.

For quantifying the costs due to airborne pollutants and noise exposure the Impact Pathway
Approach was applied comprising the following steps

ƒ emission calculation

ƒ dispersion and chemical conversion modelling of air pollutants / noise propagation

ƒ calculation of physical impacts

ƒ monetary valuation of these impacts.

The results showed significant variations between the locations studied, reflecting the
different characters and conditions of the relations. Besides the magnitude of total costs, the
relative shares of air pollution, noise and global warming vary to different degrees. As for
maritime shipping a case study regarding a passenger ferry service in the Baltic sea was
assessed with regard to the marginal environmental costs for atmospheric emissions of a
typical passenger ferry travelling from Helsinki (Finland) to Tallinn (Estonia). Marginal costs
mean the environmental costs caused by an additional vessel on a certain route or visiting a
port. Marginal costs were assessed both for the route, and berth periods at ports. In general,
for the whole trip, the marginal emission costs for the open sea part are much larger than
those of the berth periods altogether because at ports the vessel uses reserve engines and low
sulphur fuel, whereas at sea the main engines are run on fuel with high sulphur content. In the
case of scheduled passenger ferry traffic discharges of wastes or contaminated liquids to sea
are not considered a problem. Because of well-established waste management practices of
shipping companies, waste and bilge waters are disposed of at ports.

7.7 The REALISE Project

The REALISE project (2002-2005) aimed at assisting European business actors and policy-
makers to secure the key maritime transport objective of the European Commission White
Paper on ‘A European Transport Policy’, achieving a substantial modal shift of incremental
freight from road to sea and a development of intermodality. In this context the work

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programme of REALISE was focused on three integrative studies: Statistics, Environmental

impact, Multi-modal pricing and cost structures.

Within the Environmental Impact work package, the following environmental impacts
relevant to the evaluation of surface transport modes were identified:

ƒ Local air pollution

ƒ Global warming

ƒ Noise pollution

ƒ Accidents

ƒ Congestion

As for the local air pollution category, the emission scores of surface transport modes have
been evaluated on the following variables or parameters:

ƒ SO2 - Sulphur dioxide

ƒ NOx - Nitrogen Oxydes

ƒ CO - Carbon Monoxide

ƒ nm-VOC - Non-methane volatile organic compounds

ƒ PM - Fine particles

As for global warming, the project distinguished transport mode-specific emission scores on
the following variables or parameters:

ƒ CO2 - Carbon dioxide (greenhouse gas)

ƒ N2O - Nitrous oxide (greenhouse gas)

ƒ CH4 – Methane (greenhouse gas)

ƒ N - Nitrogen

ƒ S - Sulphur

SO2 and S are generally not included in most environmental impact analyses that do not focus
primarily on sea transport. However the REALISE project included these elements too as the
fuel employed by SSS vessels tends to have significant sulphur contents.

As regards noise pollution, apart from its “loudness” (in dB(A)), what determines the
nuisance or loss of amenity due to noise, is the mobile source which produces it, its duration,
its frequency and (dis)continuity as well as site-specific characteristics. Finally, it should be
noted that it has a highly pronounced local dimension.

Water pollution is an important element, in fact it appears that a large share of

environmental impacts by maritime transport is not through atmospheric pollution and noise

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emissions, but through routine emissions to water, like the discharge of ballast water. Despite
that, due to a lack of systematic intelligence on this pollution phenomenon, it was impossible
to include it in a structured and founded way into the project. Moreover, based on new EU-
rules for vessels to keep a ‘logbook’ on their waste management activities (see the European
Directive 2000/59/EC), it should be possible to reduce this phenomenon seriously. That can
influence the comparative and relative environmental performance of SSS vis-à-vis the other
modes. Furthermore, by excluding this external element, also water pollution due to accidents
at sea was neglected. This is also a deficiency, but from an intermodal comparative point of
view, it is compensated by the fact that also the environmental impact of land transport
accidents in terms of soil and water pollution is not measured. On the other hand, the human
and material consequences of transport casualties were measured.

It was also decided that land use would have not been considered for the several reasons. For
example, if a new road, railway or navigation infrastructure is built, there is normally a
purchasing transaction to the previous (public or not) owner so only part of the expenses
should be regarded a social cost. Furthermore around this environmental impact there are
some criticalities due to its monetarization.

As for accidents, the modelling of material and human impacts of traffic casualties was
included. The subsequent costs due to accidents can be valued via methods that evaluate the
costs of accidents via multiplying the numbers of dead and injured by the per unit cost (“the
value of a statistical life”) of these deaths and injuries (as occasionally evaluated on a more
top-down basis by national or supranational organizations) in relation to the degree and
number of deaths and injured due to transport.

Congestion was included too. On average, if the throughput capacity of the transport system
is fixed, the greater the number of users, the larger the possibility that the average journey
time per user increases, and/or the larger the possibility that the average difference between
the planned timetable and the real timetable shows discrepancies. This loss of time can be
valued either via market price estimations or a willingness-topay estimation.

Project’s main results indicate that - with the exception of certain emissions to air (not
including CO2) – short sea shipping appears as the transport mode having the lowest
environmental impact. If additionally, one takes into account external effects of transport,
such as noise, accidents and congestion, SSS outperforms road transport to an even greater
degree. Hence, any process of internalizing external costs would see SSS as the preferred
mode in cost and price terms. There is, however, one significant problem for short sea
shipping consisting in air emissions of Sulphur S, Sulphur Dioxydes SOx, and
Particulates, and to a lesser extent Nitrogen Oxydes NOx (where road transport is making
up ground rapidly).

The following charts contain environmental impact costs in “normal” and “improved”
circumstances. For road transport, “normal circumstances” stands for Euro III technology and
“improved circumstances” stands for Euro IV technology. As regards SSS, “normal
circumstances” represents the current situation, with “improved circumstances” standing for
approximately “10% less emissions” on all fronts except for S, SO2 and NOx emissions that
are expected to be regulated more severely due to the entry into force of EU Directives.

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Emission of S and SO2 are expected to go down by 40%, due to the foreseen implementations
of certain regulations. NOx, is supposed to go down by nearly 50%.

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Mode-specific aggregated environmental impact costs according to the REALISE Project

Total Gross Aggregated

Cost of Cost of Cost of
Mode Unit cost of aggregated total excl.
noise accidents congestion
emissions total noise

Normal Performance

Road a (60% diesel

€ / 100
technology – 40% 1,2834 1,45 0,35 0,227 3,31 1,86
tonkm
gasoline technology)

Road b (100% diesel € / 100

1,4735 1,45 0,35 0,227 3,50 2,05
technology) tonkm

Rail (100% diesel € / 100

1,0084 4,1 0,078 0 5,19 1,09
traction) tonkm

Rail (100% € / 100

0,0179 4,1 0,078 0 4,20 0,10
electrical traction) tonkm

€ / 100
SSS 0,9186 0 0,019 0 0,94 0,94
tonkm

€ / 100
Inland navigation 1,0206 0 0 0 1,02 1,02
tonkm

€ / 100
Pre and post haulage 2,4778 1,45 0,35 0,797 5,07 3,62
tonkm

Hotelling and
€ / unit 0,0051 p.m. p.m. p.m. 0,0051 0,0051
manoeuvring unit

Total Gross Aggregated

Cost of Cost of Cost of
Mode Unit cost of aggregated total excl.
noise accidents congestion
emissions total noise

Improved Performance
Road a (60% diesel
€ / 100
technology – 40% 0,3381 1,45 0,35 0,227 2,37 0,92
tonkm
gasoline technology)

Road b (100% diesel € / 100

0,1080 1,45 0,35 0,227 2,14 0,69
technology) tonkm

Rail (100% diesel € / 100

0,3121 4,1 0,078 0 4,49 0,39
traction) tonkm

Rail (100% € / 100

0,0143 4,1 0,078 0 4,19 0,09
electrical traction) tonkm

€ / 100
SSS 0,7563 0 0,019 0 0,78 0,78
tonkm

€ / 100
Inland navigation 0,6864 0 0 0 0,69 0,69
tonkm

€ / 100
Pre and post haulage 0,1659 1,45 0,35 0,797 2,76 1,31
tonkm

Hotelling and
€ / unit 0,0040 p.m. p.m. p.m. 0,0040 0,0040
manoeuvring unit
Source: REALISE Project elaboration.

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