Norwegian regulatory regime on emission, ECA Zones and use of LNG Olav Akselsen, Director General, Norwegian Maritime Authority

06.05.2015

Contribution of international shipping to global CO2-emissions

• 2,2 % of the worlds CO2-emissions, ~ 796* million tons per year

* Third IMO GHG Study 2014

57493

745 7961170

1740

4177

5433

8286

0

1000

2000

3000

4000

5000

6000

7000

8000

9000

06.05.2015

International regulations

Secure even playing field for

Norwegian flagged ships IMO

EU

Norwegian regulatory regime on emissions to air

- only international regulations apply• MARPOL Annex VI

– Sulphur content in fuel oil (Reg.14)

– NOx emissions from marine diesel engines (Reg.13)

– Energy efficiency (Reg.20, 21, 22)

• EU directive as regards the sulphur content of marine fuels

– Maximum sulphur content of marine fuels used by ships at berth in Union ports

– Passenger ships operating on regular services to or from any Union port

• EU Implementing decision on frequency of sampling of marine fuels being used on board ships

06.05.2015

MARPOL Annex VI – SOx and PM

• General requirements

The sulphur content of any fuel oil shallnot exceed

• 3,50%

• 0,50% (1 January 2020)

• Requirements within Emission Control

Areas

The sulphur content of any fuel oil shallnot exceed

• 0,10% on and after 1.January 2015

The Norwegian coast up to 62oN is an Emission Control Area for SOx

06.05.2015

Energy efficiency for ships

• The regulations on energy efficiency for ships entered into force January 1st 2013 for international shipping:

Energy Efficiency Design Index

– ‘CO2 index for new ships’

Ship Energy Efficiency Management

Plan (SEEMP)

– A plan on how to lower the fuel oil consumption on board

• These regulations will enter into force for domestic vessels in Norway from July 1st 2015

Projections of international shippings CO2-

emissions (data from IMO 3rd GHG study 2014)

06.05.2015

Estimated effect of the regulations on energy efficiency for ships

06.05.2015

MARPOL Annex VI – NOx

• Tier I, January 1st 2000

• Tier II, January 1st 2011

• Tier III, January 1st 2016*

– Only in ECA for ‘new ships’

– New NOx-ECAs:

• North Sea area?

• Baltic Sea area?

– The date(s) for any new NOx ECA will be the adoption dateof the amendment, or specifiedin the amendments

06.05.2015

*Only the North American ECA which currently has NOx

included along with SOx

LNG: The fuel for the future

Three important drivers

• A clean fuel

– Can meet the IMO tier 3 requirements on emissions

• Economical

– LNG has the potential to be economical competitive to heavy fuel oil (HFO)

• Quantity

– The predicted amount of natural gas is huge . May last for the next 1000

years if Gas Hydrates are included

5/6/2015

Experience on emission LNG – vs - MDO

0

0.05

0.1

0.15

0.2

0.25

MDO - 1% S LNG

g /

kW

h

Particles

0

100

200

300

400

500

600

MDO - 1% S LNG

g /

kW

h

CO2

0

2

4

6

8

10

12

MDO - 1% S LNG

g /

kW

h

NOx

0

1

2

3

4

5

6

MDO - 1% S LNG

g /

kW

h

SOx

5/6/2015

Norway - a leading LNG nation

06.05.2015

80% of worlds

LNG-powered

fleet under

Norwegian flag

Norway – a leading LNG nation

• Long experience

• Broad range of

specialists

• Well developed

distribution system

• Large fleet – 46 ships

• Several newbuildings

• International interest

06.05.2015

5/6/2015

LNG - The fuel for the future

Challenges:

– Supply chain and

availability of

bunkering

stations

5/6/2015

Development driven by innovative ship-ownersand political framework

06.05.2015

Incentives in Norway

Environmental effect is the main driver, implemented by:

– Political decisions on public transport in1996(ferries)

– Charterer agreements – NOx reduction exchange (supply ships)

– Coastguard (5 ships)

– Emission tax on NOx ~ NOK 19,1 pr. kg, or;

– Alternatively: Owners can join the private NOx fund and only pay

NOK 4,00 pr. kg and be able to re-allocate funds when investing

in low NOx technology, new diesel engines, LNG engines,

Selective catalytic reduction systems (SCR) etc.

5/6/2015

5/6/2015

Fredrikstad

Skangass

Terminal

Bunkering of LNG

• From tanks at LNG plants

• From tank farms, refilled by

gas tanker and/or trailer

• From trailers on quay/terminal

5/6/2015

Operational experience with LNG in Norway

Viking Energy – Eidesvik

• Viking Energy: 13 years

operation without one

hour off-hire caused by

the gas system

• Gas mode in 97 % of total

energy production time

• ~18% reduction in operation

and maintenance cost

5/6/2015

Is LNG dangerous?

• The amount of energy is enormous• Odorless and colorless at room temperature

• -162 deg. C - special material requirements

• No reported accidents in Norway

With the correct set of rules and regulations and close supervision, LNG is a safe fuel

06.05.2015

International regulations – the IGF Code

5/6/2015

• 2004 Proposal from Norway to develop Gas Code

• 2009 Interim Guidelines adopted in June 2009

Resolution MSC.285(86)

• 2009 The development of the IGF-Code started

• 2013 It was agreed to finalize the Code for Natural

Gas as a first step.

• Approval in principle at MSC 94 November 2014

• Adoption at MSC 95 June 2015?

• Entry into force 1. January 2017?

IMO

Norwegian regulations on LNG fuelled ships

Regulation in force

– Reg. of June 17th 2002 No. 644 concerning cargo ships with natural gas

fuelled combustion engines

– Reg. of September 9th 2005 No.1218 concerning construction and

operation of gas-fuelled passenger ships

Today use of IMO Resolution MSC 285(86) Interim Guideline on safety for

natural gas-fuelled engine installations in ships is accepted as basis.

Regulations to be updated in acc. to IMO IGF-Code

5/6/2015

HTW - Training for Gas Fuelled Ship Crew

Human Element, Training and Watch-Keeping developed February 2014

• Training requirements for officers and crew on board ships using gases or other low flashpoint Fuels

5/6/2015

5/6/2015

Source: DNV GL

78 confirmed newbuilds

MF Ampere: First battery-only ferry

5/6/2015

A maritime step

towards zero

emissions in

shipping

To the Future: LNG Fuelled Shipping

15.4.2015

Owners are invited

to build LNG

fuelled vessels to

Norwegian

regulations!

Thank you for

your

attention!