National Action Plan to address GHG emissions from ships

For ships entering national ports: ratification and enactment into national law of international regulations allows the country to enforce international provisions against internationally trading ships. A failure to enact international laws leaves the States open to non-compliant international ships entering their waters and ports and not having the powers under international law to challenge and enforce those laws. Furthermore, it weakens the ability of the country to make formal representation to the government of the ship and even informally governments may not be willing to engage more proactively with a country that has not enacted the international requirements.

For the international ship register: increasingly, due to legal and contractual issues, shipowners and operators want their vessels to be registered only with flag States that enact and implement all international regulations. Also ships registered with flag States that have not enacted international requirements are likely to be considered a higher risk by port States and so liable to inspection with the potential for enforcement action to be taken including detention.

A country’s Constitution and administrative governance structure also matter. A centralized government system will require coordination and integration, both within and across ministries and agencies. In a federal system, legal and implementation responsibility may rest partly with the central government and partly with State governments or sub-national jurisdictions.

The establishment of a sound coordinating mechanism is critical to developing and implementing a NAP and needs to be addressed early in the process.

In order to structure the process of developing and implementing the NAP in consultation and cooperation with the relevant agencies and stakeholders, the following actions are recommended:

• identify Lead Body
• establish National Task Force
• designate National Focal Point

The process instils ownership and thus ultimately strengthens implementation and compliance. It is also a tool for utilizing the skill sets spread out over a number of institutions, sectors and civil society.

The Lead Body has the principal responsibility for developing the NAP and should be in a position to “champion” the process, i.e. should have a clear understanding of the technicalities of the process and subject matter, along with a strong legitimacy to lead the process.The Lead Body should support mobilizing and securing government buy-in and political will at the highest appropriate level at the earliest stage of developing the NAP and should delegate various aspects or components of the NAP development to other stakeholders with particular competence in the field (e.g. the Port Authority or Ministry of Environment).

It is recommended that a Task Force be established for the purpose of advising and supporting the process of developing and implementing the NAP. The Task Force membership ideally should include both government officials and major national stakeholders, in particular those who would be key to the success of the NAP development and implementation process. It is recommended that the membership of the Task Force include:

• representative(s) from the Lead Body;
• pertinent government bodies (e.g. ministries and agencies dealing with GHG emissions and air pollution, maritime administrations, port authority representatives, and so on);
• stakeholders from the maritime industry and the environmental community, as appropriate (e.g. representatives from shipowners, shipbuilders, classification societies, maritime training organizations, NGOs and academia) and;
• stakeholders from other industries, as appropriate (e.g. renewable energy producers, research institutions).

The Task Force should be established at the earliest possible stage of the development of the NAP, in order to undertake meaningful consultations and ensure ownership by participants and all relevant stakeholders.

1. Registered fleet

This is the fleet flying the country’s flag, i.e. vessels that are registered in the country, regardless of whether they are actively trading in the country’s waters or not. This fleet is likely to include vessels whose owners are not citizens or nationals of the country.

The registered fleet will be of high importance to countries with a large ship registry and hence the associated responsibility as a Flag State but also to countries where ship registration constitutes an important income source.

2. Domestic fleet

The domestic fleet consists of vessels servicing the country’s domestic transport demand by moving goods and people from one port of the country to another port of the country, both along a country’s coast and on inland waterways. The distinction between domestic and international shipping is determined on the basis of port of departure and port of arrival, and not by the flag or nationality of the ship. By this definition, the same ship may be engaged in both international and domestic voyages. There are overlaps between domestic and international shipping and it may be difficult for governments to divorce policies for domestic shipping from policies for international shipping and many countries expand provisions from international conventions such as SOLAS or MARPOL to their domestic fleet, and sometimes even go beyond or anticipate future IMO requirements, which may incentivize early movers.

Domestic shipping falls under the country’s national jurisdiction and inventory of domestic emissions (IPCC, 2006). It could also, for example, be included in a country’s Nationally Determined Contribution (UNFCCC, n.d.) under the 2015 Paris Agreement on Climate Change.

The domestic fleet is likely to be of high importance to countries with long coastlines or extensive inland waterways, as well as for island countries.

3. Fleet servicing the country’s international transport demand

The fleet servicing the country’s international transport demand consists of those vessels moving goods and people between one of the country’s ports and a port of another country.

This fleet might be of particular importance to countries with high volumes of imports and/or exports carried by sea and large or many ports. Although NAP’s influence on this fleet may be limited, countries may wish to explore the potential of port incentive schemes or the supply of low-carbon and zero-carbon fuels for international shipping.

4. Fleet passing through the country’s territorial waters

The fleet passing through the country’s territorial waters includes those vessels that enjoy the right of innocent passage through the territorial sea (UNCLOS, article 17), i.e. vessels that operate in the territorial waters, but do not stop at a port of that country.

This fleet might be of particular relevance to countries with long coastlines as well as to countries close or adjacent to international key trading routes, which are generally located between major markets such as North America, Western Europe and East Asia. Along these routes, there are locations at which ships are forced to pass through in order to reduce distance travelled and costs. These points can be regarded as bottlenecks or choke points (the Panama Canal, the Suez Canal, the Strait of Malacca, the Strait of Hormuz, the Strait of Gibraltar and the Strait of Dover). These areas of high ship densities give rise to significant navigation risks and can also result in poor air quality affecting coastal communities.

It should be considered that there may be a limited influence of a NAP on this fleet, especially since, under UNCLOS, Coastal States may adopt laws and regulations for the prevention, reduction and control of pollution from vessels through the “competent international organization” (e.g. IMO).

5. Fleet owned by national shipowners

This is the fleet of ships owned by companies registered in the country. UNCTAD (2014) distinguishes between the concept of the “nationality of ultimate owner” and the “beneficial ownership location”. The latter reflects the location of the primary reference company; that is, the country in which the company that has the main commercial responsibility for the vessel is located. The “nationality of ultimate owner” is the nationality of the ship’s owner, independent of the location of the primary reference country. Just as today most ships fly a flag from a different country than the owner’s nationality, owners are increasingly locating their companies in third countries, adding a possible third dimension to the “nationality” of a ship (UNCTAD, 2014).

6. National fishing fleet

This is the national fleet of fishing vessels operating from/to a port of the country. Fishing vessels, although not engaged in maritime transport strictly speaking, share many of the technical challenges faced by other ships in their decarbonization journey.

A number of existing public policies for sustainable fisheries, including targeted State subsidies, may be used to support the decarbonization of fishing vessels, and in this regard may be considered as part of NAPs.

Understanding the role and importance of ports in a country can help determine the scope of the NAP and what actions could be taken to address emissions. As all ports are different, it may be appropriate for individual ports to assess their own emissions and develop emissions reduction strategies accordingly, inline with the targets and goals set out in the NAP. In this regard, the GEF-UNDP-IMO Global Maritime Energy Efficiency Partnerships (GloMEEP) Project has published a Port Emissions Toolkit, to provide guidance to ports in developing a port emissions inventory, and how to develop a port emissions reduction strategy. The toolkit can be found here.

Furthermore, Arup, the engineering consultancy company, has developed a framework for ports to establish an organizational net-zero roadmap.[1] The figure below identifies the stages in developing a roadmap. Importantly they argue that this process helps realize the benefits that system-level consideration of decarbonization trends can bring, whilst also facilitating emissions reductions in ports’ direct control and their zone of influence.

Ports and their hinterland are also critical hubs for services to support shipping including bunkering, repair docks and shipyards, shipping companies, and maritime education and training establishments. All these need consideration as relevant stakeholders and as having a role in the reduction of emissions from the maritime sector.

Stages in developing a net-zero roadmap for ports (Arup, 2021)

[1] Arup (2021) Ports: Net-zero, systems thinking and big opportunities. June 2021 https://www.arup.com/perspectives/ports-net-zero-systems-thinking-and-big-opportunities

The choice of objectives and actions should be based on national priorities and criteria. Possible criteria include:

Emissions reduction potential

• Facilitate transformational impacts (i.e. long term, significant changes) that enable a shift to a low/zero emissions economy over the long term.
• Achieve significant emissions reductions relative to a baseline scenario.
• Target high-emitting or fast-growing maritime sectors.
• Eliminate key barriers to emissions reductions.

Feasibility

• Be aligned with national economic and development priorities and objectives. Be feasible to implement and enforce, given current and anticipated political, legal and regulatory context.
• Have stakeholder support.

Benefits and costs

• Deliver multiple benefits, including emissions reductions and various economic, social and environmental benefits (such as reduced fuel costs, improved air quality, improved public health and reduced health care costs, job creation in new sectors, increased stakeholder participation in policy-making processes, creation of new business or investment opportunities, decreased energy dependency, etc.).
• Deliver a positive economic return (e.g. through financial savings from reduced fuel costs, job growth through new industries, productivity gains that increase GDP and create jobs, reduced health care costs from air pollution).
• Be cost-effective in reducing ship emissions and achieving other benefits for a given amount of resources (e.g. as determined through marginal abatement cost curves (MACC)).
• Leverage private sector investment in low emissions development/technologies.

Other

• Have been shown to be effective in other jurisdictions.
• Be measurable, in order to enable monitoring and evaluation of their performance over time.
• Be expected to have a fair distribution of costs and benefits across society, for example, across different geographic regions, income groups or industry sectors.
• Be expected to expand and entrench support from domestic constituencies and lock in low emissions technologies and behaviour.

A summary of major capital types, the level of risk vs. return for each capital type, and the key providers of capital type is set out in the figure below.  This summary is taken from a recent journal article[1] that has a focus on finance for developing a sustainable ocean economy. However, it is suggested that the capital types and risks are equally relevant for funding national action to address climate change. As such they could be used to guide consideration of policy on financing action for the maritime transport sector.

Maritime transport could be considered as providing potential for economic development, for example, through research and development, manufacturing, employment in shipping and port services.  However, this economic development may only be likely at a national level where the NAP for reducing ship emissions is explicitly linked to other policy goals/initiatives, e.g. development of clean/green/renewable energy.

[1] Sumaila, U.R., et al. Financing a sustainable ocean economy. Nature Communications 12, 3259 (2021)

Furthermore, to promote transparency in implementation of the national action plan, enhance stakeholder buy-in and communicate risk, the use of quantifiable goals and metrics is considered an imperative. Such goals can be linked to graphical representations such as risk registers/traffic light schemes to illustrate progress. This is especially important when linking financial budgets to outcomes.

Potential barriers to the development and implementation of a NAP

Potential barriers may include:

• Weak regulatory authority;
• Lack of support from other ministries and stakeholders and lack of agreement on goals and objectives;
• Multiplicity of ministries involved makes coordination a challenge;
• No incentives for involvement of stakeholders and even a lack of interest in the issue;
• Lack of clarity on responsibilities and commitments during implementation;
• Lack of information;
• Competing policy priorities;
• Lack of an adequate budget;
• Non-availability or high cost of appropriate technology;
• Lack of trained personnel in relevant ministries and agencies;
• Inability to agree on appropriate objectives and a monitoring and evaluation strategy;
• Limitations on the ability of stakeholders to adopt specific measures recommended in the NAP – for example, the economic climate places constraints on ability of especially medium and small shipowners to invest in new equipment.

Once the aim, objectives and actions are identified, responsibilities allocated, timeframes set and resource requirements as well as potential funding sources identified, the various elements of the NAP can be assembled into an implementation plan. The table below provides a possible outline.

The NAP is expected to cover a significant range of activities which will require careful and consistent management. It is recommended that the management of the NAP implementation be considered at an early stage.