Air Pollution and Greenhouse Gas Emissions from Ships

Congressional research reportDec 23, 2009

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Air Pollution and Greenhouse Gas Emissions

from Ships

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Specialist in Environmental Policy

December 23, 2009

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CRS Report for Congress

Prepared for Members and Committees of Congress

Air Pollution and Greenhouse Gas Emissions from Ships

Summary

This report provides information regarding pollution from ships and port facilities; discusses

some of the measures being implemented and considered by local, state, and federal regulatory

agencies; discusses the efforts to strengthen Annex VI of the International Convention for the

Prevention of Pollution from Ships (MARPOL); and describes legislation in Congress to control

emissions from ships, as well as efforts in Congress to address the applicability of proposed EPA

regulations to ships on the Great Lakes.

As pollution from cars, trucks, and land-based stationary sources has been more tightly controlled

over the last 40 years, the contribution of ships and port operations to air pollution in port cities

has become more important. In the same period, foreign trade has grown dramatically; thus,

pollution from shipping and port operations is growing as a percentage of total emissions. In

many cities, ships are now among the largest sources of air pollution. As Congress and the

Administration turn their attention to climate change, there is also a growing recognition that

marine vessels are an important source of greenhouse gas (GHG) emissions.

Controlling these sources of both conventional and greenhouse gas pollutants is complicated by

the fact that most ocean-going ships are not registered in the United States and may not even

purchase the fuel they are using here. Thus, controlling such pollution would seem to lend itself

to an international approach. Such efforts have been slow to yield results: in 1997, the United

States and most countries signed an international agreement known as MARPOL Annex VI,

setting extremely modest controls on air pollution from ships, but the agreement did not enter into

force until 2005, and the United States did not enact legislation to implement it until July 21,

2008 (P.L. 110-280). Negotiations to strengthen Annex VI accelerated in 2008, however, and

amendments that will strengthen its provisions have received preliminary approval. Discussions

regarding GHG emissions have also begun, although without results to date.

While awaiting congressional action and international agreement, the Environmental Protection

Agency (EPA), port cities, and states have begun to act on their own. This report discusses a

number of these efforts, including EPA measures that will require cleaner fuels and will greatly

strengthen emission standards, and measures being implemented in California to reduce pollution

from ships and ports.

In the current Congress, greenhouse gas emissions from ships are addressed in H.R. 2454, the

Waxman-Markey climate change bill. As passed by the House, the bill would direct EPA to

establish emission standards for nonroad vehicles and engines (a category that includes ships), by

December 31, 2012.

In other action, Congress added a provision to the FY2010 EPA appropriation (P.L. 111-88) that

prohibits FY2010 funds being used to implement cleaner fuel requirements as they apply to Great

Lakes ships. Accompanying report language directs EPA to develop provisions to establish

waivers of the low sulfur fuel requirements for Great Lakes ships if the fuel is not available or in

cases of serious economic hardship.

Congressional Research Service

Air Pollution and Greenhouse Gas Emissions from Ships

Contents

Introduction ................................................................................................................................1

MARPOL Annex VI....................................................................................................................3

Provisions of Annex VI .........................................................................................................3

Implementing Legislation (P.L. 110-280)...............................................................................4

Amendments to Annex VI .....................................................................................................4

EPA Regulations for Ocean-Going Ships .....................................................................................5

Category 3 Engines and Fuels .........................................................................................5

Reaction to the New Standards ........................................................................................7

Costs and Benefits of the Proposed Standards..................................................................8

Great Lakes Ships ...........................................................................................................8

Category 1 and 2 Engines.......................................................................................................... 11

California Emission Reduction Measures .................................................................................. 11

Low Sulfur Fuels .......................................................................................................... 12

Emission Controls......................................................................................................... 12

Alternative Power ......................................................................................................... 13

Grants........................................................................................................................... 13

Greenhouse Gases..................................................................................................................... 15

International Efforts to Address GHGs .......................................................................... 15

Shipping vs. Other Transport Modes ............................................................................. 16

Measures to Reduce Ships’ GHG Emissions.................................................................. 16

Conclusion................................................................................................................................ 17

Figures

Figure 1. U.S. Ports and Nonattainment Areas .............................................................................2

Figure 2. Area Proposed for Emission Control Area (ECA) Designation ......................................7

Figure 3. Potential Ambient Reductions of Fine Particulates (PM2.5) from Proposed U.S.

ECA, in 2020 ...........................................................................................................................9

Contacts

Author Contact Information ...................................................................................................... 18

Congressional Research Service

Air Pollution and Greenhouse Gas Emissions from Ships

Introduction

Over the last 40 years, air quality in the United States has improved substantially. Since the

passage of the Clean Air Act in 1970, annual emissions of the six most widespread (“criteria”) air

pollutants have declined 180 million tons (59%), despite major increases in population, motor

vehicle miles traveled, and economic activity.1

Emissions from shipping are a major exception to these trends. Although emission controls have

reduced pollution from new cars and trucks by more than 90%, most ocean-going ships operate

without any pollution controls at all. New and remanufactured engines on tug boats, ferries, and

other smaller ships are subject to emission controls beginning in 2008 and 2009, but most

existing engines in vessels of these types remain uncontrolled.

Pollution from ships is also affected by the fuel they use. Marine vessels other than oceangoing

ships have been required to use cleaner fuels, but ocean-going ships generally use bunker fuel, a

fuel that contains a high level of contaminants: the average fuel used by oceangoing ships

contains 27,000 parts per million (ppm) sulfur, for example—almost 2,000 times as much as

would be allowed in trucks operating on U.S. roads.

In the Los Angeles-Long Beach area—which is both the nation’s busiest port2 and the nation’s

most polluted area3—the problem is particularly acute. According to the South Coast [L.A.-Long

Beach] Air Quality Management District (AQMD):

•

Oceangoing vessels are among the largest sources of nitrogen oxides (NOx) in

the area, emitting more NOx than all power plants and refineries in the South

Coast air basin combined. NOx reacts with volatile organic compounds in the

atmosphere to produce ozone/smog.

•

70% of the area’s emissions of sulfur dioxide (SO2) come from ships. These

emissions need to be cut by over 90%, according to the AQMD, if the area is to

attain the national air quality standard for particulates by the 2014 deadline.

•

Particulates from marine vessels also create significant cancer risks; more than

700 premature deaths are caused in the Los Angeles area annually by these

emissions, according to the AQMD.4

See U.S. EPA, “Air Emissions Summary Through 2005,” at http://www.epa.gov/air/airtrends/2006/

emissions_summary_2005.html, updated with data from 2008 in U.S. EPA, “Air Quality Trends,” at

http://www.epa.gov/airtrends/aqtrends.html#comparison. The six criteria pollutants are ozone, particulate matter,

carbon monoxide, sulfur dioxide, nitrogen oxides, and lead.

According to the Wall Street Journal, Los Angeles and Long Beach ranked number 1 and number 2 in the value of

cargo handled, with a combined total exceeding $248.5 billion in 2003-2004. The port of New York and New Jersey

ranked third with $132.4 billion. See “The Busiest U.S. Ports,” March 9, 2006, at http://americanfuture.net/?p=1447.

The Los Angeles South Coast Air Basin is the only area that EPA considers to be a “Severe 17” nonattainment area

for ozone. The area also has the highest readings in the country for fine particulates (PM2.5), and is among only 8 areas

classified as “Serious” nonattainment areas for larger particles (PM10). See U.S. EPA, “Green Book,” at

http://www.epa.gov/oar/oaqps/greenbk/index.html.

See testimony of Barry R. Wallerstein, Executive Officer, South Coast Air Quality Management District, at

“Legislative Hearing on the Marine Vessel Emissions Reduction Act of 2007, S. 1499,” U.S. Senate, Committee on

Environment and Public Works, February 14, 2008, p. 1.

Congressional Research Service

Figure 1. U.S. Ports and Nonattainment Areas

Source: U.S. EPA, March 2009. Nonattainment areas are areas are areas where concentrations of pollution exceed National Ambient Air Quality Standards. Ozone and

PM2.5 are the pollutants that most commonly exceed the standards. PM2.5 refers to particulate matter with a diameter less than or equal to 2.5 micrometers, often referred

to as “fine particles.”

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Air Pollution and Greenhouse Gas Emissions from Ships

While the Los Angeles-Long Beach area may be the most extreme example, the problem is not

limited to L.A. or to California. According to the Environmental Protection Agency (EPA), more

than 40 U.S. ports nationwide are located in “nonattainment” areas5 for ozone, fine particulates,

or both (Figure 1).6 In addition, according to EPA, “... the problem is not limited to port areas

alone. Santa Barbara County, which has no commercial ports, estimates that by 2020, 67 percent

of its NOx inventory will come from shipping traffic transiting the California coast.... ”7

Oceangoing ships are perhaps the largest source of port emissions, but they are not the only

source. Ports make use of tug boats to guide ships entering and leaving the harbor. Ports make

connections to land-based transportation networks, such as railroads, and they generally operate

large truck terminals. Ships at rest in the port need a source of power, which often comes from

running auxiliary engines. And, in many cases, a harbor is served by substantial local boat or

barge traffic, sometimes including ferry service. Thus, addressing the sources of pollution in a

port may require a multi-faceted approach.

MARPOL Annex VI

Pollution from ships (not only air pollution, but pollution of all kinds) is governed by the

International Convention for the Prevention of Pollution from Ships, first negotiated through the

International Maritime Organization (IMO) in 1973. The Convention, known as MARPOL (for

“MARine POLlution”) 73/78 (the dates referring to the 1973 Convention and its 1978

amendments), applies to all ships of the flag states that have ratified it. About 150 countries,

representing over 98.7% of world shipping tonnage, have done so. The Convention also applies to

ships of non-signatory states while they are operating in waters under the jurisdiction of parties to

MARPOL. Six annexes to MARPOL 73/78 cover various sources of pollution from ships (oil,

noxious liquids, sewage, garbage, etc.) and provide an overarching framework for

implementation.

Provisions of Annex VI

Annex VI of the Convention, which was adopted in 1997 but did not enter into force until 2005,

addresses the Prevention of Air Pollution from Ships. In its 1997 form, the annex represented a

small first step toward controlling such pollution, particularly if one compares it to pollution

controls that the United States and other developed countries impose on land-based sources.

Annex VI:

•

limits the sulfur content of the fuel used in oceangoing ships (bunker fuel) to

4.5% (45,000 parts per million (ppm)). By comparison, highway diesel fuel in the

United States is limited to 15 ppm;

That is, areas where air quality is worse than the health-based standard for ozone, particulates, or both.

Testimony of Bryan Wood-Thomas, U.S. EPA, Office of Transportation and Air Quality, at “Legislative Hearing on

the Marine Vessel Emissions Reduction Act of 2007, S. 1499,” U.S. Senate, Committee on Environment and Public

Works, February 14, 2008, p. 2.

Ibid.

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Air Pollution and Greenhouse Gas Emissions from Ships

•

allows special sulfur oxide (SOx) Emission Control Areas (currently the Baltic

Sea, the North Sea, and the English Channel), where the sulfur content of fuel is

limited to 1.5% (15,000 ppm) or SOx emissions are limited;

•

limits NOx emissions from new engines and engines that have undergone major

conversions to a range of 9.8-17.0 grams per kilowatt-hour (g/kwh), depending

on the rated engine speed. By comparison, power plants in the eastern United

States are limited to 0.45-0.73 g/kwh;

•

allows the regulation of emissions of volatile organic compounds (VOCs) from

tankers by parties to Annex VI in their ports and terminals;

•

prohibits emissions of ozone-depleting substances;

•

prohibits the incineration on ships of polychlorinated biphenyls (PCBs, a class of

toxic chemicals widely used in electrical transformers until the 1970s). In the

United States, PCB production and use were banned in 1976, and disposal has

been strictly regulated since then; and

•

prohibits the incineration of garbage containing more than traces of heavy metals

and of refined petroleum products containing halogen compounds.

Implementing Legislation (P.L. 110-280)

•

The United States is a party to MARPOL 73/78 and most of its annexes, but did

not enact legislation to implement Annex VI until the summer of 2008. The

Senate gave its consent to ratification of Annex VI on April 7, 2006,8 but

Congress needed to enact implementing legislation before the United States

could submit the instrument of ratification. The House passed H.R. 802 to

implement the annex on March 26, 2007. The Senate passed the bill, with an

amendment, June 26, 2008, and the House agreed to the Senate amendment July

8, 2008. The President signed the bill July 21, 2008 (P.L. 110-280).

The Annex VI standards apply to: any oceangoing vessel that is registered in the United States;

ships of any registry in ports, shipyards, terminals, or the internal waters of the United States;

ships of any registry bound for or departing from the United States, while they are located in the

navigable waters of the United States or designated emission control areas; and ships bearing the

flag of any country that has ratified Annex VI traveling through U.S. waters or designated

emission control areas, even if they are not bound for or departing from a U.S. destination. To the

extent consistent with international law, the Annex also applies to any other ship in the U.S.

exclusive economic zone.

Amendments to Annex VI

The United States has participated in negotiations to strengthen Annex VI, and more stringent

limits on both fuels and emissions were approved by the IMO, October 10, 2008:

The Senate consented to ratification through Treaty Document 108-7.

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Air Pollution and Greenhouse Gas Emissions from Ships

•

The new limits cut the allowable sulfur content of bunker fuel to 3.5% (35,000

ppm) starting January 1, 2012, with a further drop to 0.5% (5,000 ppm) on

January 1, 2020. This provision will have little effect prior to 2020, since bunker

fuel currently averages 27,000 ppm sulfur, substantially cleaner than the 2012

requirements.

•

New limits will also apply in Sulfur Emission Control Areas—currently the

Baltic Sea, North Sea, and English Channel, but potentially including other areas.

Sulfur content in those areas, currently capped at 1.5% (15,000 ppm), will be

capped at 1.0% (10,000 ppm) effective July 1, 2010, and 0.10% (1,000 ppm)

effective January 1, 2015.

•

IMO also agreed to reductions in nitrogen oxide (NOx) emissions from marine

engines, with the new standards to be phased in. For engines installed on ships

constructed after January 1, 2011, but before 2016, NOx limits would be reduced

about 20% to a range of 7.7 to 14.4 grams per kilowatt-hour, depending on the

rated engine speed. For engines installed on ships constructed after January 1,

2016, the limits would be reduced about 80%, to a range of 2.0 to 3.4 g/kWh

while ships are operating in designated emission control areas. Outside emission

control areas, the prior limit (7.7 to 14.4 g/kWh) would apply.9

EPA Regulations for Ocean-Going Ships

Before Congress enacted the Annex VI implementing legislation in 2008, EPA had already

promulgated regulations under the Clean Air Act that were as stringent as the 1997 Annex VI

standards, and shipping companies were already generally meeting the standards. In addition, the

agency has promulgated standards for smaller engines.

EPA groups ship engines in three categories. The largest of these engines—the main engines on

oceangoing ships—are diesel engines with a per-cylinder displacement at or above 30 liters.

These are referred to as “Category 3” or “C3” engines. Category 1 and 2 engines (those smaller

than 7 liters per cylinder, and those from 7 to 30 liters per cylinder, respectively), are used in

boats or smaller ships—tugs, ferries, some Great Lakes freighters, fishing boats, and recreational

boats, for example.

Category 3 Engines and Fuels

EPA began addressing emissions from Category 3 engines about a decade ago, and two steps the

agency took in 2009 will significantly strengthen its regulations. But it is important to bear three

factors in mind, as one considers the potential impact of the new regulations. First, the new EPA

emission standards will only apply to engines installed on vessels flagged or registered in the

United States. In 2007, only 6.7% of the world’s ocean-going ships (and only 1.2%, if measured

by carrying capacity) were registered in the United States. 10 Thus, EPA’s emission standards for

“International Maritime Panel Sets Limits on Ships’ Sulfur, Nitrogen Oxide Emissions,” Daily Environment Report,

October 14, 2008, p. A-6. For a copy of Annex VI as revised by the October 10, 2008 agreement, see the IMO website

at http://www.imo.org/includes/blastDataOnly.asp/data_id%3D23760/176%2858%29.pdf.

United Nations Conference on Trade and Development, Review of Maritime Transport 2007, p. 36, at

http://www.unctad.org/en/docs/rmt2007_en.pdf.

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Air Pollution and Greenhouse Gas Emissions from Ships

C3 engines by themselves (i.e., apart from the similar Annex VI rules) will have little effect on

the overall level of pollution from ocean-going ships. Second, when the more stringent

requirements do take effect, they will apply only to new and remanufactured engines, so

improvements resulting from the standards will be gradual. Third, EPA will be able to achieve

more substantial emission reductions through standards for marine fuel. These will affect

emissions from both new and existing engines, and from both U.S.- and foreign-flagged ships.

The new C3 standards will require substantially cleaner fuel, a point to which we will return after

describing the existing and proposed rules in more detail.

Current C3 engine standards were promulgated February 28, 2003, and went into effect in 2004.11

These standards mirrored the relatively lenient requirements of Annex VI, adopted by the IMO in

1997. In October 1999, EPA also established a voluntary certification program so that engine

manufacturers could show that their new engines were compliant with Annex VI. EPA believes

that all marine Category 3 diesel engines sold in the United States since January 1, 2000, have

met Annex VI requirements.

When the 2003 standards were promulgated, EPA set itself a deadline of April 2007 to

promulgate stronger standards for C3 engines. EPA subsequently reset this deadline to December

2009: the Administrator signed new regulations December 18. Thus, 2009 has seen several

developments that will strengthen emission standards for ships and expand the use of cleaner

fuels. The new standards are in line with the Annex VI amendments that were negotiated in 2008.

EPA has also proposed to add U.S. waters to those areas designated as Emission Control Areas

under the annex. Specifically:

•

On March 27, 2009, EPA proposed that the entire U.S. coastline except portions

of Alaska be designated by the IMO as an Emission Control Area (ECA), subject

to the lower sulfur limits in bunker fuel discussed above. As shown in Figure 2,

the proposed ECA includes the entire coastline of the contiguous 48 states,

Southeastern Alaska, and the main Hawaiian Islands, extending to a distance of

200 nautical miles from shore. EPA anticipates that this amendment will be

adopted at the next IMO Marine Environment Protection Committee meeting

(MEPC 60) which is scheduled for March 2010. Adoption of the ECA will set

sulfur limits of 10,000 ppm as early as August 2012, and 1,000 ppm effective

January 1, 2015.

•

On July 1, 2009, EPA proposed regulations that will strengthen emission

standards for new C3 marine engines and will implement the low sulfur fuel

requirements that apply in ECAs starting in 2015. These regulations were

finalized, with relatively minor changes on December 18, 2009.12 New marine

engines will be required to meet these standards in two phases: Tier 2, which

would apply to new engines beginning in 2011, would require “more efficient use

of current engine technologies, including engine timing, engine cooling, and

advanced computer controls,” resulting in a 15% to 25% reduction in NOx

emissions, compared to Tier 1 standards; Tier 3, effective in 2016, would reduce

68 Federal Register 9746, February 28, 2003.

The proposal appeared in the Federal Register August 28, 2009: “Control of Emissions from New Marine

Compression-Ignition Engines at or Above 30 Liters per Cylinder,” 74 Federal Register 44442. The final regulations

had not yet appeared in the Federal Register as of this writing, but a pre-publication copy, as signed by the

Administrator on December 18, can be found at http://www.epa.gov/otaq/oceanvessels.htm#regs.

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Air Pollution and Greenhouse Gas Emissions from Ships

NOx emissions from new engines 80% below current standards through the

application of aftertreatment technology such as selective catalytic reduction

(SCR), a technology now widely used at electric power plants.

Figure 2. Area Proposed for Emission Control Area (ECA) Designation

Source: U.S. EPA

Reaction to the New Standards

In general, the Category 3 engine standards and the ECA proposal have been supported by the

shipping industry and by environmental groups.13 The World Shipping Council (WSC), whose

member companies carry over 90% of the United States’ international containerized ocean cargo,

in its comments on the C3 standards, stated, “... the WSC and its members fully support the

proposal to codify and adopt these standards as proposed in the current rulemaking,” although

they went on to suggest a number of clarifications and technical improvements. 14 Regarding the

ECA proposal, a spokesman for the Pacific Marine Shipping Association was quoted as saying,

“We've been waiting for this a long time. We're pleased to see everything moving forward as

planned.”15

See “Industry, Environmental Groups Offer Praise for EPA Proposal to Limit Ship Emissions,” Daily Environment

Report, August 5, 2009, p. A-5. Also see “U.S., Canada Propose Areas for Large Cuts in Emissions from Oceangoing

Ships,” Daily Environment Report, March 31, 2009, p. A-5.

See “Comments of the World Shipping Council Submitted on September 28, 2009 to the U.S. Environmental

Protection Agency in the Matter of Proposed Rule, Control of Emissions from New Marine Compression-Ignition

Engines at or Above 30 Liters per Cylinder,” Docket Number: EPA-HQ-OAR-2007-0121, at

http://www.regulations.gov/search/Regs/home.html#docketDetail?R=EPA-HQ-OAR-2007-0121.

T.L. Garrett, Vice President, Pacific Marine Shipping Association, as quoted in “U.S., Canada Propose Areas for

Large Cuts in Emissions from Oceangoing Ships,” Daily Environment Report, March 31, 2009, p. A-5.

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Air Pollution and Greenhouse Gas Emissions from Ships

The Clean Air Task Force, and 34 other environmental organizations stated, “EPA’s proposed C3

Marine Engine rule is a substantial step in the right direction.”16 They would have liked to see the

proposed emission standards strengthened to cover all new ships travelling in U.S. waters, no

matter where they are registered, and would have liked stronger standards for NOx and

particulate matter from the existing fleet of ships. Environmental groups also support the

ECA/fuel sulfur proposal, although they would like to see it expanded to include Alaska’s Arctic

waters.

Costs and Benefits of the Proposed Standards

EPA estimates that the benefits of its new regulations for C3 engines and fuel will outweigh the

costs by at least 30 to 1. The benefits include annually preventing between 12,000 and 31,000

premature deaths, 1,500,000 work days lost, and 9,600,000 minor restricted activity days, which

the agency values at between $99 billion and $270 billion annually. 17 The reductions in pollution,

shown in Figure 3, are greatest near the coasts, but more modest reductions would extend a

substantial distance inland, according to EPA modeling.

The agency’s estimated cost of the proposals is approximately $1.85 billion in 2020, increasing to

$3.11 billion in 2030. Of the 2020 costs, nearly 89% are attributable to the use of lower-sulfur

fuel in the proposed ECA. These costs are substantial, but they will be spread over such a huge

volume of traded goods that they may be little noticed. According to the agency:

These costs are expected to be completely passed on to the consumers of ocean

transportation. The impacts of these costs on society are estimated to be minimal, resulting in

a small increase in the goods transported. For example, EPA estimates it will result in an

increase of about $0.01 for a pair of tennis shoes, and about $0.03 for a bushel of grain.18

Great Lakes Ships

Perhaps the most controversial aspect of the ECA and Category 3 rules was their proposed

application to the large ships that ply the Great Lakes. The Great Lakes would be included in the

proposed ECA and, therefore, ships operating on the lakes would be required to burn low sulfur

fuels under the ECA proposal.

More than 100 U.S.- and Canadian-flagged cargo ships operate on the Great Lakes. These ships

generally carry bulk cargoes, including iron ore, coal, limestone, agricultural products, and rock

salt. The associations that represent the U.S. and Canadian ship owners estimate that they carry as

much as 150 million tons of cargo annually.19

Clean Air Task Force et al., “Comments on Proposed Large Marine Diesel Engine Rule,” September 28, 2009, p. 30,

Docket Number: EPA-HQ-OAR-2007-0121at http://www.regulations.gov/search/Regs/home.html#documentDetail?R=

0900006480a3df87.

U.S. EPA, “Regulatory Announcement: EPA Proposal for Control of Emissions from New Marine CompressionIgnition Engines at or Above 30 Liters Per Cylinder,” June 2009, at http://www.epa.gov/otaq/regs/nonroad/marine/ci/

420f09029.htm#4.

U.S. EPA, Office of Transportation and Air Quality, “EPA Proposal for Control of Emissions from New Marine

Compression-Ignition Engines at or Above 30 Liters Per Cylinder,” Fact Sheet, p. 4, at http://www.epa.gov/otaq/regs/

nonroad/marine/ci/420f09029.pdf.

The Lake Carriers’ Association represents 18 American companies that operate 55 vessels on the Great Lakes. These

(continued...)

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Figure 3. Potential Ambient Reductions of Fine Particulates (PM2.5) from Proposed

U.S. ECA, in 2020

Source: U.S. EPA

Many of these ships are old. The Lake Carriers’ Association (LCA) identified one U.S.-flagged

vessel built in 1906 and 17 others built between 1929 and 1960 that are still in operation. Thirteen

of these ships have powerplants that were designed to burn heavy residual fuel. According to the

LCA,

It is theoretically possible to switch the fuel supply system for the boilers to distillate fuel.

However, it would require modifications including new fuel pumps, bypass of the fuel

heating systems, new burners and burner tips, and possibly new air diffusers. A number of

upgrades to the automation system would also have to have been done to ensure the proper

air to fuel ratio and that the fuel cut off valves are sufficient to ensure that absolutely no

diesel fuel enters the boiler in the off position.20

(...continued)

vessels can carry as much as 115 million tons of cargo in a given year, according to the association. The Canadian

Shipowners Association represents the owners of 68 Canadian vessels with an annual volume of over 62 million metric

tons in 2008, slightly more than half of which were carried between Canada and the United States. See their respective

comments on the proposed Category 3 rule at http://www.regulations.gov, Docket Number: EPA-HQ-OAR-2007-0121.

Comments of the Lake Carriers’ Association on the proposed Category 3 rule, September 28, 2009, p. 4, at

http://www.regulations.gov/search/Regs/home.html#documentDetail?R=0900006480a3e004.

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LCA estimated the cost of converting these 13 steamers’ powerplants to run on diesel fuel or of

converting them to self-unloading barges powered by tugs to be $20 million to $27 million each.

Another 13 vessels were identified by LCA as facing significant impacts because of higher fuel

prices, even though they are able to safely burn low sulfur distillate fuel.

The case made by the Lake Carriers Association and other industry commenters that older Great

Lakes ships will face significant impacts appears not to have been considered by EPA when it

proposed the ECA and C3 regulations. The Category 3 Regulatory Impact Analysis did indicate,

however, that switching from residual fuel to lower sulfur distillate would increase costs borne by

shipping companies $145 per tonne of fuel, or 44%.21 For ocean-going ships, this cost increase is

not as great as it might seem, since they operate in an ECA only a small percentage of the time

and can burn dirtier fuel outside of ECAs. Great Lakes ships, however, operate in the proposed

ECA 100% of the time, and thus would face a greater increase in costs.22

The Great Lakes shipping companies made a sufficiently persuasive case that Congress addressed

their concerns. Section 442 of H.R. 2996, the FY2010 appropriations for Interior, Environment,

and Related Agencies, signed by the President, October 30, 2009 (P.L. 111-88), provides that:

None of the funds made available for the Environmental Protection Agency in this Act may

be expended by the Administrator of the Environmental Protection Agency to issue a final

rule that includes fuel sulfur standards applicable to existing steamships that operate

exclusively within the Great Lakes, and their connecting and tributary waters.

This prohibition applies only to the period covered by the appropriation, i.e., FY2010. But

language in the accompanying Conference Report (H.Rept. 111-316), states that EPA has received

comments detailing significant negative economic impacts for carriers that operate Category 3

engine vessels exclusively within the Great Lakes, and the report adds:

Because of these economic impacts, EPA should include waiver provisions similar to those

in other EPA rules in the final rule—one to waive the 10,000 ppm sulfur standard for Great

Lakes Category 3 diesel engine vessels that burn residual fuel if EPA determines that 10,000

ppm residual fuel is not available; and one to waive fuel requirements for an owner/operator

of a Great Lakes Category 3 diesel engine vessel based upon a showing of serious economic

hardship. It is important that EPA structure such a waiver provision similar to the other fuels

rules, where parties can apply for and receive a waiver in sufficient time prior to the

implementation of the requirements. Finally, EPA should perform a study and issue a report

U.S. EPA, Office of Transportation and Air Quality, “Draft Regulatory Impact Analysis: Control of Emissions of Air

Pollution from Category 3 Marine Diesel Engines,” June 2009, p. 5-58, available at http://www.epa.gov/otaq/regs/

nonroad/marine/ci/420d09002.pdf. The RIA found no substantial increase, however, for ships switching from distillate

fuel to lower sulfur distillate fuel. For this group, the additional fuel cost was less than $1.00 per barrel, about 2 cents a

gallon.

How this cost increase would affect the shipping companies and their customers is a different question. The ships

have a large cost advantage over other modes of transportation because they use significantly less fuel per ton-mile:

according to the Army Corps of Engineers, Great Lakes carriers use 90% less fuel per ton-mile than trucks, and 66%

less than trains. The Corps estimated that Great Lakes shipping annually saves its customers $3.6 billion in

transportation costs compared to the next least expensive mode of transportation. Furthermore, the low sulfur fuel

requirements for shipping companies are not happening in a vacuum. Both trucks and trains also face lower sulfur fuel

requirements: in both cases, the sulfur limit will be 15 parts per million, as compared to the 1,000 ppm allowed on ships

in the proposed ECA. Thus, although Great Lakes ships would undoubtedly incur costs to comply with the C3 and

ECA proposals, higher costs would not necessarily eliminate the huge cost advantage they hold over competing modes

of transportation. Rather, the impacts on them will depend on the degree to which they can pass on higher costs to their

customers and the ability of those customers to do the same, a question that was not analyzed in EPA’s RIA.

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within six months that evaluates the economic impact of the final rule on Great Lakes

carriers.23

The final C3 rule provides the two Great Lakes waivers discussed in the report language.

Category 1 and 2 Engines

Category 1 and 2 engines (those smaller than 7 liters per cylinder, and those from 7 to 30 liters

per cylinder, respectively), are used in boats or ships that operate in U.S. waters—tugs, ferries,

smaller Great Lakes freighters, fishing boats, and recreational boats, for example—virtually all of

which are registered in the United States. While smaller than Category 3 engines, these engines

are still rather large: they generate at least 800 horsepower.

EPA is further along in regulating the emissions of these categories, as compared to Category 3.

Regulations that will reduce emissions of NOx from new or remanufactured engines by 24% and

emissions of particulates by 12% when fully implemented, were promulgated in 1999 and began

taking effect between 2004 and 2007. More stringent standards were promulgated May 6, 2008,

and will take effect between now and 2014.24 The final 2014 standards will require ultra low

sulfur diesel fuel (15 ppm sulfur) and high efficiency catalytic emission controls capable of

reducing particulate matter emissions by 90% and NOx emissions by 80%, along with “sizeable

reductions” of hydrocarbon, carbon monoxide, and air toxic emissions, according to EPA.25

As with the new Category 3 regulations, EPA estimates that benefits of the May 2008 rule will

substantially exceed the costs of compliance – in this case, by a figure of at least 9 to 1. The

principal benefits that the agency estimated are health benefits: a reduction of between 1,150 and

1,400 premature deaths, 120,000 work days lost, and approximately 1,000,000 minor restrictedactivity days annually. The agency estimates that these benefits will be worth between $8.4

billion and $11 billion in 2030, whereas the annual social costs will be approximately $740

million in that year. The impact of these costs on society is expected to be manageable, with the

price of marine transportation services estimated to increase by about 1.1%.26

California Emission Reduction Measures

California, being more adversely affected than most other areas, has also played a leadership role

in identifying and implementing emission reduction measures applicable to shipping. The state

has focused on port activities, in addition to fuel and emission standards for marine vessels.

California’s measures fall into four categories: (1) requiring the use of lower sulfur fuel; (2)

requiring emission controls on harbor vessels and shore-side equipment; (3) providing alternative

U.S. Congress, House, “Department of the Interior, Environment, and Related Agencies Appropriations Act, 2010,”

Conference Report to Accompany H.R. 2996, October 28, 2009, pp. 109-110.

73 Federal Register 25097, May 6, 2008.

For information, see U.S. EPA, Office of Transportation and Air Quality, “Diesel Boats and Ships,” at

http://www.epa.gov/oms/marine.htm.

For additional information, see the EPA Regulatory Impact Analysis at http://www.epa.gov/otaq/regs/nonroad/

420r08001a.pdf.

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(electric) power to ships while they are docked at marine terminals; and (4) providing grants for

the re-powering of harbor craft and short-haul trucks with cleaner engines.

Low Sulfur Fuels

The California Air Resources Board (CARB), at a July 24, 2008, meeting, approved regulations

that required both U.S.- and foreign-flagged vessels sailing within 24 miles of its coast to use low

sulfur fuels in both main and auxiliary engines beginning July 1, 2009. Compliant fuels are

marine diesel oil with 5,000 ppm or less sulfur or marine gas oil with 15,000 ppm or less sulfur.

In January 2012, sulfur in both types of fuel will be limited to 1,000 ppm. The rules replace low

sulfur fuel requirements that the state implemented in 2007, but which were overturned by the

U.S. Court of Appeals for the Ninth Circuit in February 2008.27 The original rules would have set

a 1,000 ppm limit two years earlier, in 2010.

Emission Controls

California has, in general, led the nation in imposing more stringent requirements on diesel

engines. In addition, the ports of Los Angeles and Long Beach have developed procedures to

require that trucks serving the ports will be replaced by newer, less-emitting models. According to

a description of the ports’ plan:

... all pre-1989 trucks will be barred from entering the ports’ terminals beginning Oct. 1

[2008]. Effective Jan. 1, 2010, all 1989-1993 trucks and any 1994-2003 trucks without

certified pollution control equipment will be banned. By Jan. 1, 2012, all trucks entering the

port must meet the 2007 federal standard for heavy-duty diesel trucks....

A $35 gate fee for each 20-foot container unit that passes through the port will generate

funds to help underwrite subsidies to upgrade and replace trucks.28

The Port of Los Angeles estimates that truck emissions have been reduced about 70% since

October 1, 2008, as a result of these requirements.29

In addition, CARB has adopted regulations for harbor craft, including ferries, tugboats, and tow

boats, which will require the replacement of unregulated engines beginning in 2009, and will

Pacific Merchant Marine Ass’n v. Goldstene, 517 F.3d 1108 (9th Cir. 2008). The court held that the state’s Marine

Vessel Rules were preempted by the federal Clean Air Act because the regulations set emission standards for marine

engines without California having received a waiver from EPA to do so. California has since asked EPA for a waiver to

enforce the original rules, in addition to developing the rules applying only to fuels. If the waiver is granted, the

original (2007) requirements would be enforced. See “California Air Board Seeks Federal Waiver to Enforce Ship

Auxiliary Engine Rules,” Daily Environment Report, May 13, 2008, p. A-1. See also, CARB, “Advisory on Plans to

Implement a Proposed ARB Regulation on Fuel Sulfur and Other Operational Requirements for Ocean-Going

Vessels,” October 2008, at http://www.arb.ca.gov/ports/marinevess/documents/advisory1008.pdf.

“Los Angeles Harbor Commission Approves Program to Replace Older Diesel Trucks,” Daily Environment Report,

March 24, 2008, p. A-9.

“January 1, 2010 Truck Restrictions Will Bring More Clean Trucks to Port of Los Angeles, Continue to Reduce

Harmful Air Emissions,” Port of Los Angeles News Release, December 4, 2009, at http://www.portoflosangeles.org/

newsroom/2009_releases/news_120409_ctp_truck_ban.asp.

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accelerate the adoption of EPA’s Category 1 and Category 2 marine engine pollution controls.

These rules became effective November 19, 2008.30

Alternative Power

In June 2004, the Port of Los Angeles opened the world’s first Alternative Maritime Power

(AMP) terminal for container ships, where cargo ships can plug in to power instead of operating

auxiliary engines to generate electricity while at berth. The electrification project was the result of

a lawsuit brought by the Natural Resources Defense Council and other groups, who sued the city

claiming it failed to fully weigh air quality and other environmental impacts of a new container

terminal. As a result of the suit, a state appeals court halted work on the terminal in October 2002,

and Los Angeles subsequently agreed to electrify the terminal to cut diesel emissions while ships

are at docks, among other measures. 31 A second terminal was outfitted with AMP capability in

2005. To encourage shippers to use the AMP facilities, in December 2004, the Los Angeles Board

of Harbor Commissioners passed a policy resolution to help each existing Port customer

underwrite the cost of building or retrofitting their first container or cruise ship to run on

electrical power when docked, a cost estimated at $320,000-$830,000 per vessel.32 Cruise ship

terminals in San Francisco and Seattle are also implementing AMP, and CARB obtained final

approval of regulations to require the use of AMP at the state’s six largest ports, in December

2008.33

Grants

CARB, the Ports of Los Angeles and Long Beach, and the South Coast Air Quality Management

District also intend to provide substantial amounts of financial support for the replacement of

older, high-emitting engines and the conversion to lower emitting power sources. CARB awarded

$247 million in FY2007-FY2008 funds for “goods movement emission reduction” projects (about

$137 million of which was designated for ports); another $250 million was appropriated in

FY2008-FY2009, and a third cycle of $250 million was appropriated in the FY2009-FY2010

state budget. According to CARB, most requests for the funds came from trucking companies,

which would replace older engines or trucks with new models that reduce emissions as much as

90%.34

Information on these regulations can be found at http://www.arb.ca.gov/regact/2007/chc07/chc07.htm.

Natural Resources Defense Council v. City of Los Angeles, 126 Cal. Rptr. 2d 615 (Cal. App. 2002).

See Port of Los Angeles, “Alternative Marine Power,” at http://www.portoflosangeles.org/environment/

alt_maritime_power.asp. Also see “Alternative Maritime Power “Off and Running,” presented by Eric Caris, at

http://www.ffca2006.com/documents/presentations/marine/Eric%20Caris.pdf.

See California Air Resources Board, “Rulemaking to Consider Adoption of Proposed Regulations to Reduce

Emissions from Diesel Auxiliary Engines on Ocean-Going Vessels While at Berth at a California Port,” at

http://www.arb.ca.gov/regact/2007/shorepwr07/shorepwr07.htm. The December 2008 regulation will require container

vessels, passenger vessels, and reefers (refrigerated ships for perishable cargo) to reduce on-board power generation

50% by 2014, 70% by 2017, and 80% by 2020. Tankers, vehicle carriers, and bulk and general cargo ships are not

affected by the regulation.

See CARB, “Emissions Reduction Plan for Ports and Goods Movement in California: Update on Implementation,”

Staff Presentation, Air Resources Board Meeting , Oakland, CA, April 24, 2008 at ftp://ftp.arb.ca.gov/carbis/board/

books/2008/042408/08-4-7pres.pdf.

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In February 2009, CARB noted that state funding for bond programs had been suspended,

pending “effective resolution of the current fiscal year budget crisis and a restoration of the state’s

ability to access the bond market.” This affected FY2007-FY2008 funds awarded to local

agencies under the Goods Movement Program, as well as the FY2008-FY2009 funds that had not

yet been awarded.35 Some funding has since been freed up, but a Department of Finance directive

prohibited CARB from making allocations for the second and third installments ($250 million

each) appropriated for this program.

In addition to the CARB funding, the ports of Los Angeles and Long Beach, as noted earlier, will

provide subsidies for truck and engine replacement from a fund generated by a $35 to $70 per

container fee. The grants will provide $20,000 for the cost of each truck compliant with EPA’s

2007 emission standards used by port concessionaires. The ports began distributing $44 million in

incentive checks in December 2008, for the first 2,200 low-emission trucks purchased under the

program. 36

These grants have also experienced funding problems. The per-container fees that are to fund the

system were to have been collected beginning in November 2008, but implementation was

delayed by the Federal Maritime Commission (FMC), which maintained that the ports’ program

(referred to as the PortCheck Agreement) is anti-competitive and interferes with interstate

commerce. FMC delayed implementation of the fees by requiring two 45-day review periods.

These actions delayed the start of fee collection until February 18, 2009.37

The Port of Los Angeles is also collaborating with the South Coast Air Quality Management

District to provide up to $100,000 for each natural gas (LNG or CNG) truck purchased by port

concessionaires and up to 80% of the cost of electric trucks. This has led to the purchase of more

than 400 alternate fuel trucks. About 8.5% of the cargo moves at the port were being made by

these alternative fuel trucks as of October 2009.38

Besides state and local funding, U.S. EPA has become a source of funds for diesel emission

reductions at ports. The stimulus package (the American Recovery and Reinvestment Act of

2009, P.L. 111-5) contained $300 million for diesel emission reduction grants. This money may

be used for purposes authorized under Title VII, Subtitle G of the Energy Policy Act of 2005 (P.L.

109-58), including retrofit of diesel trucks, marine engines, and cargo handling equipment, not

only in California, but in other states as well. Of the first $156 million awarded, at least $29

Although funds are appropriated to ARB as part of the state’s budget process, ARB must obtain the cash through the

Pooled Money Investment Board. See CARB, “Prop 1B/Goods Movement Update” (e-mail to listserve on February 4,

2009), at http://www.arb.ca.gov/bonds/gmbond/docs/2_4_2009_email_update_to_listserv.pdf. Additional information

was provided on July 1 at http://www.arb.ca.gov/bonds/gmbond/docs/july_2009_semi_annual_report_to_dof.pdf.

“Port of Los Angeles Begins Estimated $44 Million Pay-Out Process to Clean Truck Program Concessionaires that

Applied for Port’s 2007-Compliant Incentive Program,” Press Release, December 23, 2008, at

http://www.portoflosangeles.org/environment/ctp.asp.

Trucking interests also sued the ports to prevent implementation of PortCheck, focusing on the mechanism it uses

(i.e., its requirement that truckers be concessionaires of the ports and submit to numerous administrative, financial,

training, maintenance, and insurance requirements, in addition to using cleaner trucks). See American Trucking Ass'ns

Inc. v. City of Los Angeles, C.D. Cal., No. 08-4920. In April 2009, the U.S. District Court for the Central District of

California blocked the ports of Los Angeles and Long Beach from enforcing the concessionaire requirements of the

PortCheck program on the grounds that they interfered with interstate commerce. The Port of Long Beach subsequently

settled with the trucking associations. See “Port of Long Beach, Calif., Settles Lawsuit Over Clean-Truck Program,”

Daily Environment Report, October 22, 2009, p. A-3.

http://www.portoflosangeles.org/CTP/CTP_Cargo_Move_Analysis.pdf

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million went for diesel reduction activities at ports, including $8 million to California ports. There

is an additional $60 million in diesel emission reduction grant money in P.L. 111-88, the Fiscal

Year 2010 Interior, Environment, and Related Agencies Appropriation, signed by the President

October 30, 2009.

Greenhouse Gases

Ships are also an important source of greenhouse gas (GHG) pollutants. Although there is a wide

range of estimates, the International Maritime Organization’s consensus is that international

shipping emitted 843 million metric tonnes of carbon dioxide, 2.7% of global CO2 emissions in

2007. Including domestic shipping and fishing vessels larger than 100 gross tonnes, the amount

would increase to 1.019 billion tonnes, 3.3% of global emissions.39 At these levels, only five

countries (the United States, China, Russia, India, and Japan) account for a higher percentage of

the world total of CO2 emissions.40

In addition to the CO2 emissions, the low quality fuel (bunker fuel) that ships use and the absence

of pollution controls result in significant emissions of black carbon and nitrogen oxides, which

also contribute to climate change. The refrigerants used on ships (hydrofluorcarbons and

perfluorocarbons—HFCs and PFCs) are also potent greenhouse gases when released to the

atmosphere. Thus, the total impact of ships on climate may be somewhat greater than 3%.

International Efforts to Address GHGs

For the most part, these emissions occur in international waters, and the sources are vessels not

registered in the United States. Addressing the emissions, therefore, is likely to require

international agreement. On the international level, however, there has been disagreement over

who should take responsibility to abate GHG emissions. Rather than cover these emissions under

the Kyoto Protocol, nations agreed to look to the IMO for sector-specific provisions to reduce

GHG emissions from shipping.41 The IMO’s Marine Environment Protection Committee has

begun negotiations on the issue, and has stated that the issue is “high on the Committee’s

agenda.” Thus far, however, it has agreed only on voluntary guidelines on ship design and

operational efficiency, while continuing to discuss market-based instruments to reduce GHG

emissions.42 Some in the industry, including shipping industry associations from several European

countries, have suggested applying a cap-and-trade scheme to shipping’s GHG emissions. At

U.N.-sponsored climate negotiations, on the other hand, there has been talk of imposing a tax on

bunker fuel.43

International Maritime Organization, Updated Study on Greenhouse Gas Emissions from Ships, Executive Summary

of Phase 1 Report, 1st September 2008, p. 5 at regserver.unfccc.int/seors/attachment/file_storage/6ep77qqvcujba7k.doc.

Both estimates exclude emissions from naval vessels. Cited below as “IMO 2008 Update.”

Oceana, Shipping Impacts on Climate: A Source with Solutions, p. 2, at http://www.oceana.org/fileadmin/oceana/

uploads/Climate_Change/Oceana_Shipping_Report.pdf.

Under the UN Framework Convention on Climate Change, emissions from internationally used fuels (both ships and

aviation) are calculated by countries but reported separately from national emissions, such as those subject to the

United Nations Kyoto Protocol.

For information on IMO discussions, see http://www.imo.org/Environment/mainframe.asp?topic_id=1737.

“U.N. Climate Talks Consider Carbon Tax on Air, Sea Transport; Progress on Draft Text,” Daily Environment

Report, October 7, 2009, p. A-14.

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As with many other sectors, the European Union has been a driving force in getting international

consideration of controlling the shipping sector’s GHG emissions. The EU has considered adding

the shipping industry to its cap-and-trade system, the EU Emissions Trading Scheme (ETS), but

for now is deferring to the IMO. Approving a broad package of climate measures on December

17, 2008, the European Parliament left shipping out of the package, pending the outcome of the

IMO discussions. Satu Hassi, a Finnish lawmaker from the Parliament’s Green Group, who

oversaw negotiations on emission reduction targets for non-ETS sectors, was quoted as saying the

“EU will act unilaterally” should IMO discussions not produce sufficient results.44

Shipping vs. Other Transport Modes

Ocean-going ships are already by far the most efficient means of goods movement. As noted by

the United Nations Conference on Trade and Development (UNCTAD):

While in absolute terms GHG emissions from international shipping are significant, in

relative terms maritime transport – in particular where larger ships are used – surpasses other

modes of transport in terms of fuel efficiency and climate friendliness. On a per ton

kilometre (km) basis and depending on ship sizes, CO2 emissions from shipping are lower

than emissions from other modes. For example, emissions from rail could be 3 to 4 times

higher than emissions from tankers, while emissions from road and air transport could,

respectively, be 5 to 150 times and 54 to 150 times higher. Equally, in terms of fuel

consumption (kilowatt (kW)/ton/km), a container ship (3,700 twenty-foot equivalent units

(TEUs)), for instance, is estimated to consume on average 77 times less energy than a freight

aircraft (Boeing 747-400), about 7 times less than a heavy truck and about 3 times less than

rail.45

But, in general, shipping does not compete with other modes of transport. Only in a small number

of cases involving high value or perishable commodities, or relatively short distances between

countries that also have land links, are mode shifts between shipping and air, truck, or rail

transport possible. Ships move more than 80% of the volume of international trade, and are likely

to continue doing so. As the overall volume of trade grows, GHG emissions from shipping are

projected to be 2.4 to 3 times the current level by 2050 unless control measures are adopted.46

Measures to Reduce Ships’ GHG Emissions

A number of measures might be taken to reduce the shipping sector’s GHG emissions. One of the

more common suggestions is that ships operate at lower speeds. The IMO’s 2000 study of GHG

emissions from ships concluded that a 10% reduction in speed would result in a 23.3% reduction

in emissions.47 Slowing speeds is not without problems. According to the 2000 IMO report:

“European Parliament Gives Final Approval to Far-Reaching Climate Protection Strategy,” Daily Environment

Report, December 18, 2008, p. A-1.

“Maritime Transport and the Climate Change Challenge,” Note by the UNCTAD Secretariat, 9 December 2008,

prepared for the Multi-Year Expert Meeting on Transport and Trade Facilitation, Geneva, Switzerland, 16-18 February

2009, at http://www.unctad.org/en/docs/cimem1d2_en.pdf.

IMO 2008 Update, op. cit., p. 5.

Norwegian Marine Technology Research Institute – MARINTEK et al., for the International Maritime Organization

(IMO), Study of Greenhouse Gas Emissions from Ships, March 2000, p. 17, at http://unfccc.int/files/

methods_and_science/emissions_from_intl_transport/application/pdf/imoghgmain.pdf. This one measure (slow

steaming) dwarfed the potential of any of the other technical and operational measures examined in the IMO study: in

(continued...)

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For most ship engines, running at reduced speed / slow steaming may ... cause problems.

Such problems may be vibrations (critical RPM of engine / shaft) and accelerating sooting in

the exhausted gas channel. Sooting problems are normally coincident with incomplete

combustion and increasing GHG emission per fuel unit consumed. For ships permanently

operating at slow speed, however, engine modifications / de-rating may be a solution.48

In addition, of course, cargo owners may consider the lost time in reaching the ship’s destination

to be more valuable than the fuel and GHG savings. Thus, in a competitive market with low fuel

costs, ship owners will tend to offer as swift a service as they can safely provide.

Nevertheless, it is possible without changes in technology or fuels to achieve significant GHG

emission reductions, and shipping companies have begun to implement slow steaming policies to

reduce their emissions. A.P. Moller – Maersk Group, the world’s largest container shipper, for

example, reports that it reduced fuel consumption in its transport group 6% in 2008 compared to

the fuel used for the same level of business activity in 2007. In addition to slow steaming, the

company has implemented waste heat recovery systems on 32 ships, has installed software in

containers to reduce energy consumption for cooling, and has developed a voyage planning

program to identify the most fuel-efficient routes, and a “just in time” steady running strategy that

minimizes engine loads.49

Cleaner fuels and emission controls could also lower emissions, particularly if one focuses on

emissions of black carbon and nitrogen oxides. Like slow steaming, these could be implemented

without the need to replace ship engines or the ships themselves.

The use of alternative power in ports may also reduce GHG emissions, if the shore power is

derived from low-carbon sources such as natural gas, or no-carbon sources (hydropower, wind,

solar, or nuclear).

New ships may be able to reduce emissions further through better hull design, more efficient

propulsion, and propeller coatings, among other options. A detailed discussion of options (in the

context of Navy ships) is provided in CRS Report RL33360, Navy Ship Propulsion Technologies:

Options for Reducing Oil Use—Background for Congress, by (name redacted)

Conclusion

As pollution from cars, trucks, and land-based stationary sources has been more tightly controlled

over the last 40 years, the contribution of ships and port operations to air pollution in port cities

has become more important. Simultaneously, foreign trade has grown dramatically, adding to the

burden of pollution from these sources. Thus, pollution from ships and the port operations that

serve them is now among the most important sources of sulfur oxides, nitrogen oxides,

particulates, and other pollutants in numerous U.S. cities.

(...continued)

the short term (10 years), it accounted for nearly 60% of the total reductions identified; over a 20-year horizon, it still

accounted for 43% of potential reductions.

Ibid., p. 91.

Preparing for the Future, A.P. Moller – Maersk Group’s Health, Safety, Security and Environment Report 2008, p.

30, at http://media.maersk.com/da/PressReleases/2009/Documents/Maersk%20HSSE%202008_Final.pdf.

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Controlling these sources of pollution is complicated by the fact that most oceangoing ships are

registered in foreign countries. As a result, initial efforts at control were focused on international

negotiations through the IMO, which established a basic structure (MARPOL Annex VI) that

appears likely to be the basis of more stringent future controls. Negotiating, ratifying, and

implementing MARPOL agreements has been time-consuming, but now has resulted in

significant levels of regulation that will gradually be implemented over the next six years. EPA

and state and local agencies (particularly those in California) have also begun to address pollution

from ships using the Clean Air Act and comparable state authorities.

Not all pollution from marine vessels comes from foreign ships. Smaller craft, such as ferries,

tugboats, and fishing boats do tend to be registered in the United States, and are thus more

amenable to control. Even for these smaller craft, the technical issues can be complex, as the

vessels include a wide variety of engine sizes and ship configurations. Safety also poses

important considerations, as ships must be able to depend on their sources of power in what may

be extreme weather conditions and while dealing with a variety of navigational hazards. A

particular issue has arisen regarding Great Lakes freighters, many of which were built more than

50 years ago, and might face significant costs in upgrading to burn cleaner fuel. The FY2010

appropriation for EPA has prohibited the expenditure of funds in this fiscal year to issue final fuel

sulfur standards applicable to existing steamships operating exclusively within the Great Lakes,

and accompanying report language states that EPA should develop waiver provisions available to

these ships.

Because ships and port operations are now such significant sources of air pollution, and because

of the importance of shipping to the national and world economy, implementation of the

emissions regulations for ships and ports, including the cleaner fuels requirements, may continue

to be of interest to Congress. In addition, ships are a large and growing source of greenhouse gas

emissions; how and whether to regulate these emissions are the subject of IMO discussions and

are a small part of the larger debate over legislation to address climate change.

Congress has begun efforts to address these problems, by enacting legislation to implement

MARPOL Annex VI in July 2008. But this is likely to be just the start of Congressional attention

to air pollution from ships. Action at the state level, in the courts, and at U.S. EPA will continue to

bring the issue to Congress’s attention, with numerous opportunities for oversight and legislation.

Author Contact Information

(name redacted)

Specialist in Environmental Policy

[redacted]@crs.loc.gov, 7-....

Congressional Research Service

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