The Carbon Market on the Naval Industry
Since the Kyoto Protocol, the maritime transportation has always been out of the emissions reduction scenario. However, the reality is changing, and faster than one might think.
The Carbon Trading or Carbon Market often called emissions trading is a market-based tool to limit GHG. The Carbon Market trades emissions under cap-and-trade schemes or with credits that pay for or offset GHG reductions.
Cap-and-trade schemes are the most popular way to regulate carbon dioxide (CO2) and other emissions. The scheme’s regulating body begins by setting a cap on allowable emissions. It then distributes or auctions off emissions allowances that total the cap. Companies that do not have enough allowances to cover their emissions must either make reductions (becoming more energy efficient) or buy another companies’ spare credits. Members with extra allowances (the efficient companies) can sell them or bank them for future use. Cap-and-trade schemes can be either mandatory or voluntary. But, for now, the industry and the aviation companies are the only ones that are involved in the EU Emissions Trading System (EU ETS).
Recently, MRV – Monitoring, Reporting, and Verification – (which entered into force this latest year) was created and it is the first legislation that concerns ship emissions, though it is not a worldwide regulation mostly directed to Europe.
“(…) international shipping emitted 796 million tonnes of CO2 in 2012, that is, about 2.2% of the total global CO2 emissions for that year (…)”
Source: IMO
It is also estimated that ship emissions will increase 50 to 250% by 2050 if measures are not taken. With this record values, it is necessary to take actions, and MRV may not be enough, once it does not include all the ships.
It is also estimated that ship emissions will increase 50 to 250% by 2050, if measures are not taken. With this record values, it is necessary to take actions, and MRV may not be enough, once it does not include all the ships.
Figure 1 – CO2 emissions from shipping between 1997-2007
Energy consumption and CO2 emissions from the Shipping sector could be reduced by up to 75% applying operational measures and implementing existing technologies. Many of these measures are cost-effective and offer benefits, as reduced fuel bills, and ensure the payback of any operational or investment costs. Further reduction could be achieved by implementing new and innovative technologies.
IMO is also requiring the full adoption of this strategy until 2023. It aims to cover all ships of 5000 GT and above, with fewer exemptions and reporting emissions to the flag state.
Until then, ship owners must take actions to be prepared for these regulations that are being prepared to be implemented in a near future – implementing energy saving strategies, by performing a proper energy audit and diagnosis, followed by the identification of energy saving actions at machinery level as well as at the ship operation and awareness of the crew.
The strategy to follow has already been put in place by some companies, and it is based on the implementation of ISO 50001. Count on TecnoVeritas experience to help you, and find out how to implement the most suitable solutions to allow your fleet to save energy and fuel.