The purpose of this chapter is to introduce the concept of Market Based Measures (MBMs) to reduce Green House Gas (GHG) emissions from ships, and review several distinct MBM proposals that have been under consideration by the International Maritime Organization (IMO). The chapter discusses the mechanisms used by MBMs, and explores how the concept of the Marginal Abatement Cost (MAC) can be linked to MBMs. It also attempts to discuss the pros and cons of the submitted proposals.
The purpose of this chapter is to present some basics as regards the energy efficiency of ships, including related regulatory activity at the International Maritime Organization (IMO) and elsewhere. To that effect, the Energy Efficiency Design Index (EEDI) is first presented, followed by a discussion of Market Based Measures (MBMs) and the recent Initial IMO Strategy to reduce greenhouse gas (GHG) emissions from ships. The discussion includes commentary on possible pitfalls in the policy approach being followed.
The International Maritime Organization (IMO) is a specialized United Nations (UN) agency regulating maritime transport. One of the very hot topics currently on the IMO agenda is decarbonization. In that regard, the IMO decided in 2018 to achieve by 2050 a reduction of at least 50% in maritime green house gas (GHG) emissions vis-à-vis 2008 levels. The purpose of this paper is to discuss the possible role of Market Based Measures (MBMs) so as to achieve the above target. To that effect, a brief discussion of MBMs at the IMO and the EU is presented, and a possible way forward is proposed, focusing on a bunker levy.
The purpose of this chapter is to introduce the concept of Market Based Measures (MBMs) to reduce Green House Gas (GHG) emissions from ships, and review several distinct MBM proposals that were under consideration by the International Maritime Organization (IMO). The chapter then moves on to discuss the concept of Monitoring, Reporting and Verification (MRV) of CO2 emissions and the distinct mechanisms set up the European Union (EU) and the IMO for MRV. The reason the MBM and MRV subjects are treated in the same chapter is twofold: (a) the MRV discussion essentially started when the MBM discussion was suspended in 2013, and (b) MRV is a critical step for any eventual MBM implementation in the future.
As a reaction to an increasing concern with the decreasing of standards in shipping during the 1970s and 1980s the International Maritime Organization adopted the ISM Code, which became mandatory in 1998. This study revisits the ISM Code, firstly exploring the genesis of the code at the international level, and then its operationalization at the national and local level. Based on a three-step case study, the interplay between the essence of the ISM Code and praxis onboard is explored. The study explores the distortion and erosion of the essence of the ISM Code when implemented on the national level in Danish law (step one) and by two Danishbased companies (step two) and finally investigates the local effect of the code as it is displayed onboard (step three).
The study is conducted as an applied socio-legal study; thus, it adopts both an internal (doctrinal) and an external (empirical) approach. It also combines the topdown and bottom-up perspective, consequently applying different methods to fit the content of the different levels examined, while maintaining a qualitative approach.
The research design is inspired by the hermeneutic circle. The first circle (Part I the international level) explores the genesis of the ISM Code, aim to explore the causal explanation for and to determine the essence of the ISM Code. The ‘essence’ is constituted by the ‘principles’ that the regulators intended to be essential to achieve ‘the purpose’. With Santos’s cartographic metaphor as a theoretical analytical framework combined with legal dogmatic method, the first part concentrates on small-scale legality (the international level). The second circle (Part II) is related to medium-scale legality (the national/transnational level). Part II explore the operationalisation of the ISM Code as it is implemented in Danish law, applying legal dogmatic method, combined with analyses of written formal communication to identify the inter-legality that distort the principles when implemented at a national level (step one and two). The third circle (Part III) relates to large-scale legality, applying Goffman’s theoretical framework to analyse the micro level, that constitute the onboard praxis. Praxis is compared with legislation, v revealing a frontstage behaviour that is compliant with regulation and documented by checklists, while in fact praxis deviate, ‘to make it work’ the crew exhibits what Goffman denoted a backstage behaviour.
The ISM Code introduces meta-regulation as a regulatory mechanism. Metaregulation is linked to Santos’s concept of globalization and governance matrix; the study applies Parker’s definition of meta-regulation and the triple loop to study the concept.
The study identifies three principles that constitute the essence of the ISM Code; (1) to establish a genuine link between the company and the flag State; (2) to ensure that the company becomes responsible for the ship’s operation; and (3) to empower the master, ensuring her or his authority. The analyses proved that each of the three principals were distorted at respectively meso and micro level, and that even though the intent was to promote good ship management, in reality it has provided companies the opportunity strut in borrowed plumes.
The 0.1% sulphur limit within Sulphur Emission Control Areas (SECA) has made compulsory the use of either pricier ultra-low sulphur fuel, or the installation of abatement technologies that require significant capital investments. Due to the unexpectedly low fuel prices, Ro-Ro operators have been able to cope with the new sulphur limits, but recent research has shown that if fuel prices increase some Ro-Ro services may face the risk of closure. This paper proposes three key performance indicators (KPIs) to enable the asssessment of the impact of SECAs on Ro-Ro shipping. The KPIs are used on a set of case studies for services of a leading European Ro-Ro operator, and allow benchmarking of a series of operational and policy measures that aim to reverse the negative impacts of SECAs. The operational measures consider speed reduction, new sailing frequency, fleet reconfiguration, as well as investments in abatement technologies. Policy measures include the options of either subsidizing shippers or ship operators, or alternatively introducing new taxes on landbased options. The KPIs can be useful to ship operators seeking to improve the resilience of their network, as well as to regulatory bodies designing new environmental policies and understanding any negative implications these may have on ship operators.
In an effort to reduce the environmental impacts of maritime transportation, the International Maritime Organization (IMO) designated special Sulphur Emission Control Areas (SECAs) where ships are required to use low-sulphur fuel. In January 2015, the sulphur limit within SECAs was lowered to 0.1%, which can only be achieved if vessels are using pricier ultra-low sulphur fuel, or invest in abatement technologies. The increased operating costs borne by Ro-Ro operators in SECAs due to the stricter limits can result in the shutting down of some routes and a redistribution of cargo flows with land-based alternatives. The exact repercussions of the new sulphur limits are difficult to identify in the wake of significant recent reductions of the fuel prices for both low-sulphur and heavy fuel oil. This paper presents a modal split model that estimates modal shifts vis-a-vis competing maritime and land-based modes available to shippers. This allows examining the implications of the recent low prices to modal choice, and the influence a potential increase in fuel prices may have. The model is applied to seven routes affected by the regulation based on data from a leading European Ro-Ro operator. Sensitivity analyses on market share data, cargo values, freight rates, and haulers rates are conducted. Emissions inventories are constructed to assess the environmental efficacy of the SECA regulation. The novelty of the proposed model lies in the examination of the ex-post implications of shutting down a service and the redistribution of transport. Recommendations to mitigate and reverse the negative side-effects of such environmental legislation are proposed.