Hong Kong & Shenzhen Green Harbours:

Reducing Marine-related Emissions in the Pearl River Delta

Brief Overview of Current Stakeholder Engagement Study

Veronica Galbraith

Civic Exchange

www.civic-exchange.org

Background

Since 1996, the ports of Shenzhen and Hong Kong have been in the top four largest and busiest container ports in the world when measured by twenty-foot equivalent units (TEUs). In 2006, Hong Kong managed 23,540,000 TEUs while Shenzhen processed 18,470,000 TEUs in container throughput.1

This volume accounts for 9.5% of global container throughput.2 The area that includes Hong Kong and the Pearl River Delta (PRD) is similar in size to the metropolitan areas of Tokyo, Los Angeles, and London,3 which means the relatively small body of water around Hong Kong and neighbouring ports sees the highest density of shipping and logistics traffic in the world.

Figure 1: Hong Kong and Shenzhen handled 9.5% of global container throughput in 2006

Marine transport is an efficient, cost-effective, and comparatively clean way of moving goods around the world.4 But because of the poor quality of the fuel used, ships have a large impact on the quality of the air that surrounds them. 5 This is of particular significance to the PRD ports, which include Hong Kong and East and West Shenzhen. Research has estimated that 3.8 million people live close to the Hong Kong port and are affected directly by shipping and port-related emissions,6 but few initiatives have been implemented to reduce the effect of this pollution on the publics health. This inaction is not typical of ports authorities worldwide. Ports in North America and Europe, for example, have combined local and international laws with voluntary actions to address this issue. Communities have taken issue with the poor air quality associated with ports.

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Governments, ports, and shipping lines globally have introduced more regulations and programs that address the problem of marine emissions. The effect of particulate matter emitted from ships has gained more prominence7 as public health experts increasingly link this specific type of pollution with heart and lung diseases.8 Many port authorities have created guidelines that aim to minimize the negative health and environmental effects stemming from this industry. However, in Hong Kong there is still some resistance to putting public health at the centre of government policy to fight pollution.9 In the case of locally-generated marine sources, recent research showed that they are one of the dominant local sources for about a third of the time in a year,10 suggesting that marine emissions is a problem that must be addressed urgently.

Figure 2: Marine sources dominate Hong Kongs air for 33% of the time in 2006

In 2006, China ratified Annex VI of the MARPOL Convention, which limits the amount of sulphur oxide and nitrogen oxide ships can emit, as well as prohibits intentionally releasing emissions that deplete ozone.11 At 4.5%, the sulphur oxide restrictions are not sufficiently restrictive, as most fuel used by ships contains half the amount of sulphur allowable by Annex VI.12

Although part of China, Hong Kong is an Associate Member of the IMO, which means that Hong Kong must ratify Annex VI independently of the Mainland. Ratifying Annex VI is an important step in regulating marine emissions in Hong Kong, and would bind Hong Kong to modifications in Annex VI.13 Furthermore, ratification is a necessary step in declaring the PRD a Sulphur Emission Control Area (SECA) or, if adopted by the IMO later this year, a Micro-Emission Control Area (also known as Local or Limited ECA).14 Although working in partnership with Mainland China to make the PRD a SECA would improve the regions air quality (with SOx emissions restricted to 1.5%), the considerable land-based pollution from the enormous manufacturing sector in the PRD may hamper such an effort given the IMOs strict criteria in designating SECAs.15 It is for this reason that the newly tabled Micro-ECAs are an attractive option for the PRD: Micro-ECAs do not require evidence of lowered land-based emissions, and can be applied for by one State. Also, designating the PRD a Micro-ECA would reduce SOx emissions dramatically, as it restricts fuel sulphur content to 0.1% 24 nautical miles from the baseline and 100 nautical miles along the coast. In the PRD, this would include from Macau to East Shenzhen. From Hong Kongs perspective, any marine air quality

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agreement must include the entire PRD in order for Hong Kong to remain a competitive port, and to properly address the regional aspects of this problem.

There are international examples of cooperation among ports, and among regions. In the United States, the Port Authorities have been the driving force in reducing marine emissions with Californian ports being among the most active in implementing wide-ranging policies that affect shipping and other industries associated with moving goods. The Ports of Los Angeles and Long Beach have combined their efforts to combat marine emissions and port-related activities. This agreement, the San Pedro Bay Ports Clean Air Action Plan (CAAP) could be a good model for Hong Kong because it addresses multiple sources of marine-related air pollution, including ships, rail, trucks, harbourgoing vessels and equipment at the terminals.16 Also, the collaborative nature of the CAAP meant that no port lost its competitive advantage due to stricter environmental standards. Such collaboration among ports in the PRD would similarly benefit local ports.

The state of California has also implemented the Goods Movement Action Plan (GMAP) that details the needed infrastructure in transporting goods and the related public health and environmental implications. 17 In Europe, examples of collaboration include the SECAs present in the Baltic and North Seas. Since 2005, the United States, Canada and Mexico have been examining the technical feasibility of implementing a North American SECA to address serious concerns about the health effects of particulate matter from the shipping industry.18 Also, the Vancouver, Seattle and Tacoma Ports have been collaborating to cut pollution from marine sources as well as associated trucks and trains that service the ports by 2015.19 Other initiatives that have been implemented by port-related stakeholders include lowered dues for ships abiding by stricter emissions standards, cold-ironing, using cleaner fuels and increasing efficiency near and at ports, reducing vessel speed when approaching port, reducing truck idling and waiting times, and retrofitting engines.

Green Harbours Project

Looking to these very different types of initiatives and building on our previous research on marine emissions, 20 Civic Exchange is currently undertaking a multi-stakeholder engagement study with the ambitious goal of producing draft guidelines to lead the reduction of marine-related air pollution. Marine-related air emissions is a regional problem with multiple sources of pollution, and the best way to tackle this problem is for everyone associated with this industry to be suitably involved.

To achieve this, Civic Exchange is bringing together stakeholders from ocean-going shipping and regional ports as well as local craft and the trucks that service the ports. Despite the geographic proximity of these areas as well as close business ties (many of the terminals in neighbouring Shenzhen are owned by Hong Kong terminal operators), this study is the first time that stakeholders from all sectors and both regions have been simultaneously engaged. The strong response from stakeholders also indicates an awareness of the importance of controlling emissions from these sources.

In order to understand the issues facing each of these sectors, Civic Exchange has just conducted two sets of workshops. The first workshops targeted single stakeholder groups and aimed to: identify the challenges facing each industry in reducing air emissions; share current clean practices; and learn about programs worldwide that affect this particular sector. The second workshop brought together all four groups to come up

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with suggested guidelines based on the insights gained in the smaller workshops to reduce marine-related emissions in Hong Kong and the PRD.

Preliminary final remarks

As seen in the initiatives undertaken internationally, regionally, locally and by the private sector, some voluntary measures have been effective in some ports. However, strong legislation must also be present, as private companies cannot have the same wide-ranging impact as clear, firm laws do.21 Because of the extremely competitive nature of these businesses, many will not adopt cleaner practices unless they are guaranteed that their competitors are also doing so. When all companies must comply with the same environmental policy, no one company loses its competitive advantage.

Thus, while the ratification of Annex VI is an important step for Hong Kong, it addresses only one source of pollution. The shipping industry is just one, albeit major, stakeholder in the effort to reduce marine emissions. Local measures must be taken to reduce air pollution from local craft, ports, and the trucks that do business at the ports. Working with the PRD authorities and ports, Hong Kong can lead the way in becoming Asias cleanest port.

The Green Harbours project Final Report will be available from our website (www.civicexchange.org) in May, 2008.

1Marine Department, Ranking of Container Ports of the World, www.mardep.gov.hk/en/publication/pdf/portstat_2_y_b5.pdf2 This number is derived Marin