Maritime Air Emissions

Texas Lawyer

In recent years, the international maritime community has tackled Nitrous Oxide (NOx) and Sulphur Oxide (SOx) air emissions, which are major contributors to acid rain and ozone-producing pollution, though perhaps at the expense of the marine environment. Nation states that are parties to MARPOL Annex VI, the air emissions regime of the International Convention to Prevent Pollution from Ships, adopted regulations to substantially reduce NOx and SOx emissions over time. The regs limit the amount of NOx emissions from marine diesel engines with a power output of more than 130 kW. With pressure from regional entities, the International Maritime Organization (IMO) adopted regulations creating emission control areas (“ECAs”) around North America, certain U.S. territories in the Caribbean Sea, as well as the North Sea and the Baltic Sea that prohibit the use of bunker fuel (to power vessel propulsion systems) containing more than 0.1% mass by mass (m/m) of Sulphur. South Korea recently implemented a similar ECA.  On Jan. 1, 2020, new IMO regulations came into force prohibiting the use worldwide of bunker fuel containing more than 0.5% m/m sulphur. Previously, bunker fuels contained 3.5% m/m sulphur or more.

The U.S. Coast Guard and the EPA are parties to a Memorandum of Understanding (MOU) in which each agrees to cooperate in enforcing Annex VI through inspections of marine fueling facilities, shipboard compliance inspections and record reviews, as well as investigations and enforcement actions. Annex VI violations are subject to civil penalties, and knowing or willful violations expose violators to potential criminal penalties. As well, each vessel’s flag state has the authority to enforce Annex VI requirements.

The Annex VI regs permit vessel operators to continue burning higher sulfur diesel oil provided their vessels are equipped with approved Exhaust Gas Cleaning Systems (EGCS) otherwise known as scrubbers, that can achieve the same level of emissions reductions. Scrubbers take SOx and carbon particulate matter out of the propulsion system’s exhaust and either store it on board for later disposal (a closed-loop system) or pump it over the side into the surrounding marine environment (an open-loop system). There are also hybrid-scrubber systems that permit the use of an open-loop system on the high seas and a closed-loop system closer to shore where certain nations or principalities prohibit the use of open-loop systems.

A number of countries have banned the use of open-loop scrubbers within their territorial waters, however, the United States only imposes some restrictions on the use of open-loop systems within 3.0 nautical miles of U.S. shores to regulate the pH content of the wash-water discharge, and Texas has imposed no restrictions of any kind. Scrubbers are installed on approximately 10 to 15% of the world’s merchant vessel fleet, and about 80% of those are open-loop systems, which discharge contaminated wash-water overboard.

The IMO reported a forecast that the Annex VI regulations will reduce SOx emissions from ships by 77% or an annual emissions reduction of approximately 8.5 million metric tons. In contrast, the International Council on Clean Transportation’s marine program leader, Bryan Comer, reports that a study by the Royal Belgian Institute of Natural Sciences estimates that if 15 to 35% of the merchant fleet operating in the English Channel were equipped with open-loop or hybrid scrubbers, the pH of the of the Channel’s waters would drop annually by between 0.004 and 0.0010 pH units, or the equivalent of ocean acidification over two to four years due to climate change. This does not take into account Carbon and diesel-particulate matter, which is also pumped overboard. Decreasing the atmosphere’s acidification at the expense of the marine environment seems destined to generate both expected and unintended ill consequences that will only exacerbate the oceans’ plight. Sadly, scrubber-unit operations also cause a significant increase in a vessel’s operational power load and greenhouse gas (GHG) emissions by as much as 2% to 9% depending on the vessel’s size and power output.

As important as it is to reduce NOx and Sox emissions, the maritime industry is only just now turning its attention to ratcheting down GHG emissions emanating from the world’s fleet. In 2011, the IMO promulgated mandatory energy efficiency regulations for new ships (Energy Efficiency Design Index or EEDI) and the Ship Energy Efficiency Management Plan (SEEMP) for all ships. In 2018, the IMO adopted an initial strategy for reducing GHG emissions from shipping by 40% by 2030 when compared to 2008 levels, but no international regulations are yet in place that mandate any industry requirements to achieve such a reduction.

In 2023, the IMO intends to revise its initial strategy to rate each vessel in terms of its energy efficiency and establish its annual operational carbon intensity indicator (CII), with ships rating very-low/low over one to three consecutive years required to submit a corrective action plan with the CII baseline gradually lowering each year. While these energy-efficiency standards will certainly create market incentives to reduce GHG emissions, they appear to be a meager start to reduce emissions from the world’s fleet of merchant ships, which generate about 2.5 to 3.0% of the world’s annual GHG emissions (the equivalent of nearly one billion metric tons of CO2). Moreover, the capital investment and years necessary to build new compliant vessels requires a massive undertaking.

Meanwhile, the European Union has implemented a three-part approach to address GHG emissions from the maritime sector: monitoring, reporting and verification (MRV) of CO2 emissions from ships using EU ports; establishing GHG reduction targets for the maritime transport sector; and including maritime transport in the EU’s Emissions Trading System (ETS). The EU’s MRV regulation led the IMO to create its own IMO Data Collection System, which started collecting vessel fuel consumption data in 2019. The EU plans to incorporate the shipping sector into the ETS in 2023, which will incentivize the sector to engage in carbon trading to reduce emissions. Nevertheless, there are still no mandatory standards in place in the EU to achieve defined GHG emissions reductions from the maritime sector as a whole, and there are none in the United States.

Yet, there are limited signs of progress. A.P. Moeller-Maersk’s CEO of Ocean & Logistics Vincent Clerc reports in January 2022 that Maersk and X-Press Feeders have ordered the world’s first container vessels that will operate on carbon-neutral “green” methanol, and leading global retailers, including Amazon, Ikea and Unilever have announced that they will require all of their ocean cargo to be carried aboard vessels powered by zero-carbon fuels by 2040. In an opinion piece in Time, Clerc advocates for a more ambitious net-zero emissions goal by 2050 for the maritime industry, a drop-dead date for building new compliant fossil-fuel vessels, and a more punitive carbon tax to reduce the current cost gap between green and fossil fuels.

Consumers and maritime-trade stakeholders are demanding a more sustainable approach. Maritime regulators should heed their voices, failing which the market will adopt its own ad hoc strategy. With major industry players joining the GHG emissions-reduction chorus, it’s time for the IMO to compose the symphony that the maritime industry needs to play to fulfill its part in the global effort that confronts us.

“Maritime Air Emissions,” by Keith B. Letourneau was published in Texas Lawyer on January 20, 2022.

Reprinted with permission from the January 20, 2022, edition of Texas Lawyer © 2022 ALM Properties, Inc. All rights reserved. Further duplication without permission is prohibited.