Report on Integrated Maritime Policy 2015

Baltic Sea Parliamentary ConferenceThe Rapporteurs on IntegratedMaritime PolicyReport 2014/2015Baltic Sea Parliamentary ConferenceThe Rapporteurs on IntegratedMaritime PolicyReport 2014/20152The BSPC Rapporteurs on The Baltic Sea Parliamentary ConferenceIntegrated Maritime Policy (BSPC) was established in 1991 as a forum forpolitical dialogue between parliamentariansfrom the Baltic Sea Region. BSPC aims at rais-© Landtag Mecklenburg-Vorpommern, ing awareness and opinion on issues of currentSchwerin 2015 political interest and relevance for the BalticText: Jochen Schulte, Jörgen Pettersson Sea Region. It promotes and drives various in-Editing: Bodo Bahr, Florian Lipowski, itiatives and efforts to support a sustainableGeorg Strätker environmental, social and economic develop-Layout: produktionsbüro TINUS ment of the Baltic Sea Region. It strives at en-Photos: BSPC Secretariat hancing the visibility of the Baltic Sea RegionPrint: produktionsbüro TINUS and its issues in a wider European context.Copies: 250 BSPC gathers parliamentarians from 11Printed on environmentally-friendly paper national parliaments, 11 regional parliamentsPrinted in Germany and 5 parliamentary organisations around theBaltic Sea. The BSPC thus constitutes aunique parliamentary bridge between all theEU- and non-EU countries of the Baltic SeaRegion.BSPC external interfaces include parlia-mentary, governmental, sub-regional and oth-er organizations in the Baltic Sea Region andthe Northern Dimension area, among themCBSS, HELCOM, the Northern DimensionPartnership in Health and Social Well-Being(NDPHS), the Baltic Sea Labour ForumBaltic Sea Parliamentary Conference (BSLF), the Baltic Sea States Sub-regional Co-www.bspc.net operation (BSSSC) and the Baltic Develop-ment Forum.Bodo Bahr BSPC shall initiate and guide political ac-Head of BSPC Secretariat tivities in the region; support and strengthenbb@bspc.net democratic institutions in the participatingstates; improve dialogue between govern-ments, parliaments and civil society; strength-en the common identity of the Baltic Sea Re-BSPC Secretariat gion by means of close co-operation betweenc/o Lennéstraße 1 national and regional parliaments on the basis19053 Schwerin of equality; and initiate and guide political ac-Germany tivities in the Baltic Sea Region, endowingPhone (+49) 385 525 2777 them with additional democratic legitimacyand parliamentary authority.The political recommendations of the an-nual Parliamentary Conferences are expressedin a Conference Resolution adopted by con-sensus by the Conference. The adopted Reso-lution shall be submitted to the governmentsof the Baltic Sea Region, the CBSS and theEU, and disseminated to other relevant na-tional, regional and local stakeholders in theBaltic Sea Region and its neighbourhood.3ContentsPreface ..........................................................................................4A – Activities of the Maritime Rapporteurs.....................................6Baltic Transport Forum ..........................................................6Future Ships Conference ........................................................7Ferry shipping conference on the M/S Pride of Rotterdam .....7Åland Maritime day in Mariehamn ........................................8European Maritime Day (EMD) in Piraeus ............................9B – Legislative Developments at the EU level withregard to all BSPC members ..................................................12Stricter SECA regulations as of 1 January 2015 ....................12Port Reception facilities ........................................................12Trans-European Transport Network (TEN-T) ......................13Proposal for a regulation establishing a framework onmarket access to port services and financial transparency(COM(2013) 296) ...............................................................15Proposal for a directive on the deployment ofalternative fuels infrastructure (COM(2013) 18 final) ..........16Proposal for a regulation on the monitoring,reporting and verification of carbon dioxide emissionsfrom maritime transport and amending Regulation (EU)No 525/2013 (COM(2013) 480 final) .................................17Public consultations on Mid Term Reviews of theEU Maritime Transport Strategy and of the 2011White Paper on transport .....................................................18C – Article written by MP Jörgen Pettersson in Shippaxafter participation at Future Ships Conference30 October 2014, Mariehamn ...............................................214 PrefacePrefaceThis report summarizes the developments in the Integrated Mari-time Policy (IMP) field since the renewed appointment of MPJochen Schulte (Mecklenburg-Vorpommern) and of MP JörgenPettersson (Åland Islands) as BSPC Maritime Rapporteurs by theStanding Committee at the conference in Olsztyn.A number of interesting conferences have taken place throughoutthe past year, such as the Ferry Shipping Conference in Rotterdam,the Åland Maritime Day, or the European Maritime Day in Pirae-us. For further information on the conferences please refer to thefirst part of the report. We have also held talks with a number ofshipping companies in the Baltic Sea regarding an issue that playeda role at all the conferences attended last year: the first experienceswith the new sulphur regulations, which went into effect 1 January2015.Aside from the stricter sulphur regulations we have included a num-ber of other important legislative developments at the internationallevel in the second part of our report, which are going to affect ourown industries and those of third countries operating in the BalticSea. Among others, HELCOM contracting states will have to in-form HELCOM when adequate facilities for the reception of wastewater in the ports of the Baltic Sea become available. We call for theimplementation of an EU-wide concept for the set-up of port re-ception facilities. We also inform about the Directive on the deploy-ment of alternative fuels infrastructure, which demands that shore-side electricity supply is to be installed as a priority in the TEN-Tports. However, the directive heeds criticism also voiced by theBSPC Maritime Rapporteurs regarding the costs not outweighingthe benefits of this measure. Further, we update on a number ofother legislative acts that were the subject of previous report.In the third part of this report we included an article by MP JörgenPettersson published in Shippax. The article begins by detailinghow the use of energy on a global scale is rising, which also comeswith consequences for shipping. The article goes on to stress that to-day’s shipping is very dependent of fuel price development, high-lighting the difficulty of operating shipping, setting prices and mak-ing predictions about the future. Lastly, the article summarizes anumber of alternatives to fossil fuels, among them Liquefied Natu-ral Gas (LNG) / Liquefied Petroleum Gas (LPG), biofuel, alcohol,and other options.Preface 5Jochen Schulte Jörgen PetterssonFinally, based on our activities and talks with stakeholders, wewould like to suggest action on the new, stricter sulphur regulationsas of 1 January 2015. On 1 October 2014 Eurostat published fig-ures regarding the modal split in Europe. A comparison of the 2007and 2012 numbers shows that the share of transport via land re-mains at 75% of total transport. The politically desirable modalshift to rail and water thus did not take place. Numbers for the timeperiod after 1 January 2015 have not yet been published. Worse,our activities and talks with maritime companies all around the Bal-tic Sea Region throughout 2014/2015 have shown signs of a modalshift taking place from sea to land. Therefore, we find it prudent toinvestigate, if and how a modal shift from sea to land has takenplace since the introduction of the stricter SECA regulations on 1January 2015. Should such a modal shift have indeed taken place itwould then be in order to evaluate how counter-measures could beinitiated and how the affected sector can be supported, bearing inmind EU state aid rules.Rostock, August 2015Jochen Schulte Jörgen PetterssonMaritime Rapporteur Maritime Rapporteur6 A – Activities of the Maritime RapporteursA – Activities of the MaritimeRapporteursBaltic Transport ForumOn 28 October 2014 MP Jochen Schulte participated in the 11thBaltic Transport Forum in Rostock. One of the main issues was thedeepening of the seaside access to the Port of Rostock, which is partof the Scandinavian-Mediterranean Core Network Corridor. Thedeepening of the seaside access of the port depends on its consider-ation in the German federal transport infrastructure plan, which iscoordinated throughout 2015.An important precondition for an agreement on a new transport in-frastructure plan is a realistic prediction about the future develop-ment of transport in Germany. To this end, the Germany Ministry ofTransport and Infrastructure commissioned a transport prognosiswith 2030 as its target year. The participants in the forum disagreedon whether this prognosis assumes a correct development of transportnumbers, especially in comparison to other German sea ports. For thePort of Rostock the prognosis merely assumes an annual growth rateof 1.5%. An alternative study by the Institute for Sea Traffic and Lo-gistics in Bremen instead predicts an annual growth rate of 2.5%, un-der good economic conditions even 3.5%. The authors do note, how-ever, that the latter scenario would require enough industrial areas fornew companies and lower transport costs. These issues were furtherdeveloped in other sessions of the conference.The European Commission regards the development of the Europe-an ports as an urgent need, given that transport via the Europeanports is estimated to increase by 50% by 2030 in a low-growth sce-nario (see also chapter on European Maritime Day 2015 in this sec-tion of the report).In a Round Table attended by the CEOs of various shipping com-panies active in the Baltic Sea Region it was also discussed how theyrespond to the new, stricter sulphur regulations that went into effect1 January 2015, as well as to other environmental regulations.For a more detailed evaluation of the new sulphur regulations,please also consult the chapter below on the European MaritimeDay 2015 in Piraeus as well as Jörgen Pettersson’s article in sectionC of this report.A – Activities of the Maritime Rapporteurs 7Future Ships ConferenceOn 30 October 2014 MP Jörgen Pettersson took part in the confer-ence Future Ships. The conference was held in Mariehamn. At theconference the effects of the Sulphur Directive were discussed. Itwas concluded that today’s shipping is very dependent on fuel pricedevelopment. Margins are small and easily influenced by worldmarket whims. So it has always been, but this time it is the combi-nation of general decline and crisis during the past seven years andSulphur Directive making the situation more difficult. New types ofenergy sources were discussed such as LNG / LPG, biofuel, alcoholand new innovative sources such as for instance hydrocarbon. Forfurther reading see MP Pettersson’s article in the appendix.Ferry shipping conference on the M/S Pride ofRotterdamOn 21-23 April 2015 MP Jörgen Pettersson took part in the ferryshipping conference on the M/S Pride of Rotterdam. At the confer-ence it was concluded that the Sulphur Directive will possibly resultin more partnerships, alliances and mergers. However, low bunkerprices put a consolidation on hold. The Sulphur Directive willchange the logistic map. There will probably be more transport onshort ferry lines between Finland and Sweden. However, it is tooearly to say if it is due to the Sulphur Directive or otherwise newtransport patterns. There are many reasons for more optimism inshipping. Lower interest rates, better results for companies andscrapping of old tonnage will stimulate new builds and investments.Moreover, there are plans for substantial investments in digital me-dia over the coming years, both for passenger, cruising and generalcargo ships. The trend is that LNG soon will be available every-where in Europe. Environment becomes more important by theday.It was clear at the conference that there are threats in the pipeline.Both the Ballast Water Convention and the nitrogen regulationscan be difficult to manage. Moreover, the different operating rulesin different parts of the EU create difficulties for the shipping sec-tor. These rules should be harmonized and the same all over. Therewill also be a review of safety regulations. The shipping industry hasto be able to tell the future in order to adapt. How will we travel infive years’ time? There is probably room for growth. What will bethe impact of low cost airlines and new shopping on shore centers8 A – Activities of the Maritime Rapporteursin the harbors? Since the customers are onboard the ferries prettylong time there however will be possibilities to make sales onboard.The ferry lines are the motorways of the seas. Maybe the EU couldbe working even harder to get rid of the trailers on the motorwayson land. There are, according to the business sector, larger possibil-ities today than before the crisis in 2008. The year 2015 and thecoming years can be very good for shipping.Åland Maritime Day in MariehamnOn 21 May 2015 MP Jörgen Pettersson took part in the conferenceÅland Maritime Day in Mariehamn.MP Jörgen Pettersson acted as moderator in two blocks at the con-ference. The first was about RoRo and RoPax shipping industry.The second block was a shipping policy seminar organized by theÅland government.At the conference it was discussed how general cargo will be trans-ported in the future. The containerization of global general cargo willcontinue to reach more than 90 percent in 2018. The container fleetis very young. (Total: 5.094 ships worldwide.) The RoRo fleet is veryold. (Total: 679 ships worldwide.) The general cargo fleet is very oldtoo. (Total: 15.236 ships.) In northern Europe there are 1.664 con-tainer ships, 208 RoRo ships and 3.000 general cargo ships. It wasconcluded that the ten biggest cargo ports in Baltic Sea are Ust-Luu-ga, St Petersburg, Primorsk, Riga, Gothenburg, Klaipeda, Gdansk,Tallinn, Ventspils, Lübeck, Rostock and Sköldvik.The conference discussed how general cargo will be transported inthe future. It was concluded that there will be a demand for morecost-efficient, environmentally friendly, frequent and careful trans-port. There will be more sent in containers and energy prices will beincreasingly more important. New RoRo ship investment will bemade by owners who are financially strong and have innovativeideas.At the conference an interesting shipping management tool was dis-cussed. It was the EU funded Zero Vision Tool. It stands for a moresafe, environmentally and energy efficient as well as profitable trans-port by sea. It might be that this tool will be a key for the futureshipping management.A – Activities of the Maritime Rapporteurs 9European Maritime Day (EMD) in Piraeus andfollow-upOn 28-29 May 2015, MP Jochen Schulte took part in the Europe-an Maritime Day in Piraeus, which focused on “Ports and Coasts,gateways to maritime growth”. The European Maritime Day fo-cused on the role of ports and coasts as gateways to maritimegrowth. The maritime community addressed jobs creation, sustain-ability and competitiveness in these regions. The conference hostedhigh-level sessions and stakeholder workshops attracting delegatesand experts from across Europe and beyond. Speakers, includingMinisters, Commissioners, CEOs and experts, discussed the spec-trum of opportunities and great challenges that our coasts and seaspresent, shared best practices, and developed new synergies.Two events at the EMD were of particular interest for our work: theplenary session “Ports and coasts, engines for Blue Growth” and thestakeholder workshop “LNG for Shipping – Risks and Opportuni-ties”.At the plenary session, the participants made it very clear that be-yond the major ports in Europe also the smaller and medium-sizedports constitute centers for growth, and therefore do not merelyfunction as end or change nodes within a transport chain. One ofthe main reasons for this is that 20% of the goods coming to Europeby sea pass through just three ports. High-performing ports cannotoptimally develop their maritime connections with other EU ports,increasing the risk of congestion in their hinterland, in particularroad congestion, to the disadvantage of citizens living there. Thisstructural gap threatens the development of short-sea shipping as analternative to saturated land routes. Further, in 2011 EU ports han-dled 3.7 billion tons. According to the latest projections in a low-growth scenario, it is estimated that volume will increase by 50% by2030. All ports across the trans-European network will therefore beneeded to help accommodate growth.In addition to these challenges the sector is continually evolvingand has the potential to make existing port infrastructure obsoleteor require significant upgrade. Changes include the increased sizeand complexity of the fleet, stricter requirements on environmentalperformance and alternative fuels, an increased need for value-add-ed services within the areas of the ports, and significant develop-ments in the energy trades.Against this background, one important element in strengtheningthe growth potential of the European ports is to set up an adequate10 A – Activities of the Maritime RapporteursLNG infrastructure. In the stakeholder workshop “LNG for Ship-ping – Risks and Opportunities”, two pilot actions for the easternand western Mediterranean Sea were presented to detail the infra-structure development requirements to widely adopt LNG as ma-rine fuel for shipping operations in the region. The COSTA Actionaims at developing framework conditions for the use of LNG forships in the Mediterranean, Atlantic Ocean and Black Sea areas. Itwill result in preparing an LNG Masterplan for short-sea shippingbetween the Mediterranean Sea and North Atlantic Ocean as well asthe Deep Sea cruising in the North Atlantic Ocean towards theAzores and the Madeira Island. To this end, regional feasibility stud-ies for the eastern and western Mediterranean will depict the trans-port connections between the harbors in the Mediterranean and theAtlantic, laying the ground for the aforementioned LNG Master-plan. The projects are an answer to the implementation of the re-quirements of Annex VI of the MARPOL Convention. Against thisbackground, it has to be evaluated, which bunker volume for shipsrunning on LNG has to be made available, also in smaller ports.For the Mediterranean there are hence feasibility studies for the im-plementation of a cross-border LNG infrastructure. The countriessurrounding the Mediterranean have thus learned from past mis-takes, partly also from experiences in the Baltic Sea Region prior tothe designation of the Baltic Sea as Emission Control Area (ECA)for sulphur, where adequate feasibility studies had not been under-taken beforehand. The Baltic Sea Region should bear this in mindwhen setting up its own LNG infrastructure. With the EU Direc-tive on the deployment of alternative fuels infrastructure, all mari-time ports of the TEN-T Core network are required to be equippedwith LNG refueling points according to common technical stand-ards by 2020 (see also section B of this report). A Baltic Sea-widefeasibility study – similar to the ones carried out in the Mediterra-nean – will therefore have to analyze how much transport takesplace between the Baltic Sea ports. A LNG infrastructure will haveto be set up in a needs- and target-oriented fashion. To our knowl-edge, no such Baltic Sea-wide feasibility study exists. The BalticPorts Organization has announced the development of the “LNGin Baltic Sea Ports II” initiative, but only within five ports of theBaltic Sea Region. The sequel project involves ports from Sweden,Germany and Lithuania. Three of them are TEN-T Core Networkseaports and two are comprehensive ports. LNG small scale bun-kering infrastructure studies are scheduled in the ports of Helsing-borg, Trelleborg, and Sundsvall, Rostock and Klaipėda.If the Baltic Sea Region already has to deal with stricter sulphur reg-ulations we should ask how to support the maritime industry in theA – Activities of the Maritime Rapporteurs 11region, for retrofitting existing ships to meet the new requirementsis more expensive than deploying them outside of SECA areaswhere they can run on Heavy Fuel Oil.Against this background we have held talks with major shippingcompanies in the northern and southern Baltic Sea Region, amongothers Ab Eckerö, Scandlines and TT Line. Since Scandlines onlyruns ferries on short routes, i.e. between Rødby-Puttgarden andGedser-Rostock, the stricter sulphur regulations do not significant-ly impact their business. TT Line, on the other hand, is active onlonger routes and has confirmed that the new regulations adverselyimpact their business. Ab Eckerö has reported first signs of a modalshift from sea to land. We will continue to discuss with affectedshipping companies their experiences with these new rules.Our activities and talks with maritime companies all around theBaltic Sea Region throughout 2014/2015 have shown signs of amodal shift taking place from sea to land. Therefore, we find it pru-dent to investigate, if and how a modal shift from sea to land hastaken place since the introduction of the stricter SECA regulationson 1 January 2015. Should such a modal shift have indeed takenplace it would then be in order to evaluate how counter-measurescould be initiated and how the affected sector can be supported,bearing in mind EU state aid rules.12 B – Legislative Developments at the EU level with regard to all BSPC membersB – Legislative Developments atthe EU level with regard toall BSPC membersStricter SECA regulations as of 1 January 2015One ongoing theme of our work has been the challenge of vesselsbeing subject to stricter regulations both at global or regional levelfor 10 years since the creation of the first Emission.Control Area in the Baltic Sea. Since, ECAs have been enlarged toThe Channel and North Sea, as well as North America and the max-imum sulphur content has been reduced gradually from 4.5% to1.5% and 1% up to this date, while the regulations set new limitsin 2015 at 0.1% sulphur, which presents significant challenges forthe industry including oil majors, shipping lines and shippers.Please refer to Parts A and C of this report for our evaluation of theconsequences of the stricter sulphur regulations, which went intoeffect 1 January 2015.Port Reception facilitiesLast year, we asked the governments in the Baltic Sea Region withthe resolution from our 23rd annual conference in Olsztyn to:“proceed with strong efforts and dedicated resources for the continuedimprovement and modernization of the waste water treatment capacitythroughout the entire Baltic Sea Region, in compliance with the stricterthreshold values agreed by HELCOM, and to ensure continuous workto upgrade reception facilities for sewage in passenger ports in line withthe Special Area Status of the Baltic Sea under MARPOL Annex IV ofthe International Maritime Organization.”The BSPC Standing Committee dealt extensively with the imple-mentation of this demand at its January meeting in Brussels. Thereason is that the obligations for special areas – ensuing from MAR-POL Annex IV regarding the set-up of reception facilities for sew-age in the ports of the special area „Baltic Sea“ – only becomeB – Legislative Developments at the EU level with regard to all BSPC members 13effective once all contracting parties have informed HELCOMwhen adequate facilities in the respective countries are actuallyavailable. This requires an estimation of how shipping in the BalticSea will develop.A major current challenge for cruise tourism in the Baltic Sea is thatthe set-up of such reception facilities in the ports of the Baltic SeaRegion is by no means certain, even though all HELCOM con-tracting parties in 2011 agreed to this. For instance, some states hadgreat difficulties to even estimate how passenger shipping in theBaltic Sea will develop. And estimation of the further developmentis very difficult. Further uncertainties come from the fact that manyships currently mix black with grey water, which then has to betreated as black water. Since the discharge of grey water will also beallowed after the entry-into-force of the special area provisions un-der MARPOL Annex IV, both types of waste water could be sepa-rated even more in the future, which would in turn impact theamount of water to be released at the ports. Moreover, municipaltreatment plants in some countries partly have problems to receivewaste water in larger quantities, as those treatment plants are onlyallowed to receive waste water that meets certain limits, due to tech-nical and legal reasons. Finally – and with a view to the pricing ofport fees – there is evidence to show that price-sensitive ship opera-tors release exactly the amount at the ports that they are allowed ac-cording to the port fees. If money for the reception of waste wateris charged additionally, the offer is often declined.The Baltic Sea parliamentarians have always supported the notion ofbringing economic and ecological aspects together, as much as possi-ble. Especially for the tourism sector, the good ecological state is anindispensable pre-condition in the competition with other regions.And for this reason, we also have to bear in mind economic aspectswhen devising strategies for the protection of the Baltic Sea. Againstthe background of these challenges we call for the implementation ofan EU-wide concept for the set-up of port reception facilities.Trans-European Transport Network (TEN-T)On 28 May 2915 the Commission issued the work plans for the 9core network corridors and two horizontal corridors (Motorways ofthe Sea and European Rail Traffic Management System). A total of964 projects have been identified for the corridors concerning theBaltic Sea Region, namely the North Sea-Baltic Core Network14 B – Legislative Developments at the EU level with regard to all BSPC membersCorridor, the Scandinavian-Mediterranean Core Network Corridorand the Orient-East Med Core Network Corridor.Core network corridors were introduced to facilitate the coordinat-ed implementation of the core network. They bring together publicand private resources and concentrate EU support from the Con-necting Europe Facility (CEF), particularly to remove bottlenecks,build missing cross-border connections and promote modal inte-gration and interoperability.Nine core network corridors are identified in the annex to the CEFRegulation, which includes a list of projects pre-identified for pos-sible EU funding during the period 2014 – 2020, based on theiradded value for TEN-T development and their maturity status.A work plan is drawn up for each corridor that will set out the cur-rent status of its infrastructure, a schedule for removing physical,technical, operational and administrative bottlenecks, and an over-view of the financial resources (EU, international, national, region-al and local; public and private).To make sure that the corridors are developed effectively and effi-ciently, each will be led by a European Coordinator, supported by aconsultative forum (the “Corridor Forum”).For the corridors of importance for the Baltic Sea Region, the re-viewers for the respective work plans see the following bottlenecksand missing links:North Sea-Baltic Core Network Corridor: a Rail Baltic 1435 mmgauge direct line from Tallinn to the Lithuanian/Polish border,Lithuanian/Polish border to Bialystok upgrade, Warsaw – Bialystokupgrade, the cross-border operational systems, such as ERTMS(European Rail Traffic Management System) for rail and ITS (Intel-ligent Transport Systems) for road. Further, traffic management sys-tems must be developed along the corridor and multimodal con-nections with the ports should further be developed.Scandinavian-Mediterranean Core Network Corridor: The FehmarnBelt crossing will be removed by the construction of the new im-mersed rail/road tunnel under the 19 km wide Fehmarn strait be-tween Rødby in Denmark and Puttgarden in Germany. After thecompletion of the project, the travel time between Copenhagen andHamburg will be reduced by approximately one hour, and for railfreight transport by approximately two hours.B – Legislative Developments at the EU level with regard to all BSPC members 15Orient-East Med Core Network Corridor: Most importantly, theElbe also needs important upgrading to be able to attract trafficflows.Overall, the most pressing challenges are seen regarding the dredg-ing in ports, shore-side electricity, LNG supply, hinterland connec-tions as well as standardization of logistics software.Examples for successful projects within the TEN-T framework in-clude two ferries operating between Rødby and Puttgarden, whichhave been retrofitted to run on hybrid engines. The total costs ofthis project, which is implemented by Scandlines DeutschlandGmbH and Scandlines Danmark ApS, amount to € 11 million.With the modernization of these Baltic Sea ferries sulphur emis-sions are reduced to virtually zero, particles from ship emissions arereduced by almost 90% and CO emissions are reduced by 15%.2The European Commission decided in late 2014 to co-finance thisproject with € 2 million. The project is expected to be concluded bythe end of 2015. It takes account of the stricter exhaust-gas legisla-tion in the North and Baltic Sea, which went into force 1 January2015.Proposal for a regulation establishing a frameworkon market access to port services and financialtransparency (COM(2013) 296)After the Transport Committee of the European Parliament agreedon 17 March 2014 to abstain from an opinion on the Commission’sregulation proposal regarding market access to port services (see lastyear’s report), the Transport, Telecommunications and EnergyCouncil on 8 October 2014 adopted a general approach on newrules for access to the port services market in the EU and the finan-cial transparency of ports.The main questions agreed at the Council meeting relate to theports and services covered by the draft regulation.The ministers agreed that the regulation would cover all seaportslisted in the trans-European transport network guidelines, i.e. in-cluding the comprehensive network as well as the core network.However, member states may decide to leave out ports in the com-prehensive network located in the outermost region. They may also16 B – Legislative Developments at the EU level with regard to all BSPC membersdecide not to apply the rules on the separation of accounts to smallports in the comprehensive network, subject to certain conditions.On the other hand, member states would also be free to decidewhether to apply the regulation to other ports as well.When it comes to the different categories of service, cargo handlingand passenger services will be subject to the financial transparencyrules but exempt from the market access provisions, as initially pro-posed by the Commission. Member states will remain free to decideon market access rules for these services, in compliance with theCourt of Justice case-law.Members states may decide not to apply market access rules to pi-lotage into and out of ports, but the other parts of the proposal, in-cluding the provisions on financial transparency, will be applicable.Dredging will only be covered by the rules requiring separate ac-counts for publicly funded activities. These rules will apply whenthe port management body which receives public funding providesdredging within the port area under its jurisdiction.These changes thus partly respond to criticism we voiced in lastyear’s report.A number of other provisions have been made more flexible com-pared to the original Commission proposal in order to avoid dispro-portionate administrative burdens for small ports and to take intoaccount the diversity of the port sector in Europe as well as the par-ticular circumstances of the member states. For instance, the poten-tial for limiting the number of service providers has been expanded,e.g. to include cases where the level of traffic does not make it eco-nomically viable for several service providers to operate. Considera-tions of safety, security and environmental sustainability have alsobeen included as grounds for limiting the number of providers andfor imposing public service obligations. Transitional provisions havebeen adapted so as not to interfere with contracts concluded beforethe adoption of the regulation.Proposal for a directive on the deployment ofalternative fuels infrastructure (COM(2013) 18final)In last year’s report we informed about the Commission’s Commu-nication “Clean Power for Transport: A European alternative fuelsB – Legislative Developments at the EU level with regard to all BSPC members 17strategy” and the corresponding directive on the deployment of al-ternative fuels infrastructure. The European Parliament had passeda compromise text of the Commission’s proposed directive on thedeployment of an alternative fuels infrastructure; the agreement bythe Council followed later in 2014.The Directive on the deployment of alternative fuels infrastructurewas published in the Official Journal of the EU on 28 October2014. The aspired goal is the development on an EU-wide networkfor alternative fuels and of the necessary infrastructure. The Mem-ber States must define concrete national targets for putting in placenew recharge and refuel points. However, the text no longer con-tains minimum targets for recharge and refuel points, as originallyproposed by the Commission. The adoption of a legal framework is,however, part of the compromise. After the entry-into-force of thedirective the Member States can define targets and submit their re-spective national strategy framework until the end of 2016. Mostimportantly, the directive requires that all maritime ports of theTEN-T Core network are equipped with LNG refueling points ac-cording to common technical standards by 2020.An important amendment has remained in the directive regardingthe use of shore-side electricity for the supply of ships. Shore-sideelectricity supply is still to be installed as a priority in ports of theTEN-T Core Network and in other maritime and inland ports bythe end of 2025, however if provided that there is demand and thecosts do not outweigh the benefits. This is an important amend-ment that considers criticism that was also voiced by the BSPC’sMaritime Rapporteurs in previous reports.Proposal for a regulation on the monitoring, reportingand verification of carbon dioxide emissions frommaritime transport and amending Regulation (EU)No 525/2013 (COM(2013) 480 final)In past reports we informed that the European Commission has setout a strategy for progressively integrating maritime emissions intothe EU’s policy for reducing its domestic greenhouse gas emissions.As part of the strategy, the Commission put forward a legislativeproposal to establish an EU system for monitoring, reporting andverifying emissions from large ships using EU ports (COM(2013)480). The proposal would create an EU-wide legal framework forcollecting and publishing verified annual data on CO emissions218 B – Legislative Developments at the EU level with regard to all BSPC membersfrom all large ships (over 5,000 gross tons) that use EU ports, irre-spective of where the ships are registered. At the latest as of 31 Au-gust 2017 ship owners would have to report and monitor (as of Jan-uary 2018) the verified amount of CO2 emitted by their large shipson voyages to, from and between EU ports. Owners would also berequired to provide certain other information, such as data to deter-mine the ships’ energy efficiency. As of 2019 ships owners would beobliged to submit an annual report to the Commission and the re-spective national authorities regarding the emissions on board andany other climate-relevant information. As of 30 June 2019 all shipswill have to carry a valid document on board, which confirms thecorrect reporting in line with the regulation.We reported that the European Parliament wanted to widen thescope of the regulation, both with regard to the type and size of theregulated vessels as well as to the pollutants. However, negotiationsin the European Council proved difficult. On 28 April 2015 theEuropean Parliament has now agreed to the regulation. It could notpush through central demands, such as broadening the scope of theregulation both with regard to vessels smaller than 5,000 gross tonsand with regard to emissions other than CO . So far, the shipping2sector is not subject to a regime for the reduction of CO .2The European Council is expected to pass the regulation soon.Public consultations on Mid Term Reviews of the EUMaritime Transport Strategy and of the 2011 WhitePaper on transportOn 28 January 2015 the European Commission opened a publicconsultation on a Mid Term Review of the EU Maritime TransportStrategy of 2009. The European Union wants to collect the views ofcitizens and stakeholders on this Strategy for further improvementif deemed necessary. Participants were asked about the key develop-ments and challenges for the maritime sector as well as any sugges-tion for initiatives aimed at enhancing the growth of the EU ship-ping industry. The Commission especially wants to gather opinionson the ecological impact of sea transport and on the use of alterna-tive fuels.B – Legislative Developments at the EU level with regard to all BSPC members 19The Maritime Transport Strategy 2018 addresses two main issues:the ability of the maritime transport sector to provide cost-efficientmaritime transport services adapted to the needs of sustainable eco-nomic growth of the economy, and the long-term competitivenessof the EU shipping sector, enhancing its capacity to generate valueand employment in the EU through the whole cluster of maritimeindustries.The questionnaire is divided into 2 parts: one about the respondentinformation and another one about objectives (envisaged actionsand initiatives). The consultancy was open until 22 April. A reportabout the results will be made publicly available on the Commis-sion’s website.In another public consultation the European Commission is under-taking a mid-term review of the 2011 White Paper on Transport.The consultation aims at collecting stakeholders’ views on the WhitePaper: “Roadmap to a Single European Transport Areas – Towardsa competitive and resource efficient transport system”.The general objective of the 2011 White Paper was to define a long-term strategy that would help the EU transport system achieve theoverall goal of the Common Transport Policy, i.e. to provide currentand future generations with access to safe, secure, reliable and af-fordable mobility resources to meet their own needs and aspira-tions, while minimizing undesirable impacts such as congestion, ac-cidents, air and noise pollution, and climate change effects.In line with impact assessment accompanying the White Paper, theCommission would like to take stock of the progress and to assessthe validity of the analysis of the situation in transport sector as wellas trends, priorities and targets that were identified in 2011. Sincethen, new developments have occurred, such as the emergence ofnew technological opportunities, currently lower oil prices, the con-tinued economic crisis and the adoption of the 2030 climate andenergy framework by the European Council.After analysis of the contributions a summary report will be pub-lished on the Commission’s website. The contributions will feedinto the stock taking of the 2011 White Paper on Transport.20 B – Legislative Developments at the EU level with regard to all BSPC membersFinancingOn 30 January 2015 the European Commission issued a midwayevaluation of the joint Baltic Sea research and development pro-gram BONUS, in which the Baltic Sea riparian countries cooperatewith the support from the research framework, particularly in thefield of environmental research. The evaluation confirms increasingtarget achievement and efficient implementation, but does high-light problems regarding financial implementation as well as withrespect to the inclusion of small and medium-sized enterprises intothe program. The involved member states strive for a continuationand possibly further development of BONUS within Horizon 2020(see last year’s report). However, the financing arrangements are stilldisputed between the Commission and some member states.C – Article written by MP Jörgen Pettersson in Shippax after participation at Future Ships Conference 21C – Article written by MP JörgenPettersson in Shippax afterparticipation at Future ShipsConference 30 October2014, MariehamnSulphur DirectiveOn 1 January this year the Sulphur Directive came in force for shipsoperating in the SECA areas. The concern was great before end ofthe year concerning the economic impact the directive would have.The answer so far has been reassuring. Prices of oil throughout theworld have plummeted since last fall and ship owners and the ship-pers can relax for the moment but certainly not count their chick-ens.The use of energy is in constant rising. It is estimated that between100 and 135 billion tons of oil have been consumed in the worldsince the oil era began in the 1850s. In 2003 over 80 million barrels(one barrel = 120 liters) of oil per year was consumed. In 2013, tenyears later, it was up to 91 million barrels. International shippinguses between 200 and 270 million tons of fossil fuel every year. Thegreat gap between numbers depends on whether one refers to thefuel as sold or consumed. These are numbers too big to compre-hend, numbers which also describes the unpredictable when itcomes to, for example, price trends on fossil products.Overall, the amount of energy used (all results) in the world haveincreased by 30 per cent from the year 2000 till today which is achallenging fact. Tore Longva at DNV GL [Det Norske Veritas -Germanischer Lloyd] summarizes: ”This is far from just a shippingproblem, the whole society will be forced to adapt and becomemore sustainable than today. Shipping becomes a big start to thesolution of this dilemma because it brings world trade. However,the food chain requires a sustainability mindset that permeates ev-erything.”22 C – Article written by MP Jörgen Pettersson in Shippax after participation at Future Ships ConferenceTo achieve this most ambitious goal there are many different factorsthat must interact. One of the most important is that with the helpof IT solutions streamline shipping loading and unloading. Theship queues coming in and out of ports is something almost every-one has seen at some point. All of which helps to increase the costto consumers. This is a good example of where systems using re-mote controls can facilitate and make handling more rational.Today’s shipping is very dependent on fuel price development. Mar-gins are small and easily influenced by world market whims. So ithas always been, but this time it is the combination of general de-cline/crisis during the past seven years and Sulphur Directive mak-ing the situation more difficult than during usual “slumps”. The dif-ficulty of this to predict is also clear in the light of what actuallyhappened in the recent past. In October 2014, Brent Oil cost USD95 per barrel. In late January of this year, the price is below USD50. Thus, the anticipated price shock marine diesel momentarilygone. This highlights the difficulty of operating shipping, settingprices and – above all – speaking and predicting about the future.In the midst of Sulphur Directive’s wake it’s not only fuel prices thatmake it difficult for shipping companies. Other surprises may aswell turn up. For example, in California, USA, low sulphur fuel hasbeen a requirement since the year 2009. This means that many ves-sels choose to have two different fuels on board, a low sulphur con-tent and a “normal” one. Approaching CA one simply switchesfrom one tank to the other.This is not without consequences, especially if the change is notcarefully prepared and tested. In 2009 and 2013, 116 ships totallingapproximately 8,000 calls was affected by stalling of the machine.In European conditions that would convert into 102 ships per yearin the English Channel, where the SECA area takes effect. So far,and as to our knowledge however, no vessels have been affected bythis ”Loss of Propulsion” in the SECA area.The introduction of the Directive brought with it great suspicionalso when it comes to monitoring and compliance. Passenger ferriestrafficking Finland and Sweden cannot wait. They must follow therules and rinse tanks, sealing leaks and take care of sludge in the sep-arators (due to incompatibility) and refuel 0.1% bunker. This isknown at the highest level of legislation in the EU.”A policy is only as good as its implementation. The EU Commis-sion must therefore ensure that all Member States comply with theSulphur Directive and have a coherent and simple system forC – Article written by MP Jörgen Pettersson in Shippax after participation at Future Ships Conference 23enforcement. The spread between HFO [Heavy Fuel Oil] andMGO [Marine Gas Oil] is currently so wide that a ship owner whodoesn’t comply can save big money. Penalties must therefore bestringent enough so that we don’t end up with a situation where theship owners’ who does most and comply most, ends up paying thehighest cost”, says Mats Löfström, Parliamentary Assistant to NilsTorvalds, Member of the European Parliament.The Sulphur Directive and the increasing use of energy in the worldpin points the futures greatest challenge. What kind of energyshould we use? This issue is not exactly new for international ship-ping. During the last 100 years the development has gone fromwind to coal to oil. Now one further change awaits that we need toadapt to – doing good for the common environment. Regardingthe negative impact of traditional fossil fuels; they are well knownand undisputed. It is all about a finite resource that is bad for theenvironment in the form of sulphur emissions and greenhouse gas-es. Therefore, the IMO and the EU have applied the world’s strict-est environmental standards from 1 January 2015. The rest of theworld is expected to follow in 2020 or later in 2025. This standardmeans that the fuel used on board must be cleaner than what is al-lowed today.The effect of this concludes less pollution and a better environment.European cities can already see the results of that work when theamount of particles (Black Carbon) has now decreased, which ofcourse has positive effects for the population. Diesel fuel is Europe’smost common fuel and all diesel engines emit particulates. This iswhy the problem cannot fully be eliminated but well limited (so far,it’s all about technological achievements!).At the Conference of the Future Vessel newly arranged in the mari-time town of Mariehamn, Chief Engineer Bernt Bergman, presi-dent of the Åland Technology Clusters and ombudsman at theFinnish Shipowners’ Association, brought up the topic of future fu-els:“Fossil fuels will simply not disappear overnight. We can expect atleast 20 to 30 years before we reach Peak Oil”, thus the breakpointwhen oil use begins to decline in the world. So far it has only grown.Still there are reasons to analyse what the alternatives of today are.24 C – Article written by MP Jörgen Pettersson in Shippax after participation at Future Ships ConferenceLNG / LPGThe supply is abundant, estimated to approximately 230-270 mil-lion tons per year. Natural gas is also very environmentally friendlycompared to traditional fossil fuels, though not harmless. When itcomes to greenhouse gases, this is just as bad for the environment asdiesel, resulting of the energy used for example to cool the LNG gasto minus 163 degrees Celsius. LNG is becoming big in shippingbut has a good way to go before it’s ”everyday” fuel. The transitionthat in many ways began with Viking Line choosing LNG opera-tion in M/S Viking Grace is slow. Not until the next decade, the bigbreakthrough will happen, thanks in part to the EU’s decision onClean Fuel Strategy that will be a reality in 2025 and involve LNGsupply in 139 European ports.”When looking forward it is important that we will ensure enoughamounts of compliant fuel, both MGO and LNG. The experienceof LNG is extremely good. However, the rollout of LNG as shipfuel will be gradual and not come over night since new ships, bun-kering facilities and other infrastructure is needed. Therefore it isimportant to lower the flash point for marine diesel so that the ship-ping industry could have access to the automotive diesel market,which is much bigger, meaning greater supply which also shouldmean lower prices”, says Mats Löfström.Natural gas is by its nature very useful. The access is good and therisks are few. It is useful in the home, in cars, ships, in the processindustry and much more. One of the pioneering countries is Nor-way where shipping embraced the advantages of technology onboard passenger ships as well as tankers and more. Even old shipshave subsequently been converted to LNG operation. Today thereare about 50 LNG-fuelled ships worldwide (LNG tankers exclud-ed) and 50 new ones are about to be built in a mere future.BiofuelThe availability of biofuels in forms of diesel form is so far extreme-ly small, only about 16 million tons worldwide in 2013. For this toalso cover shipping it requires a lot more. However, there are noshortage of plans and ideas. Biodiesel distinguishes mainly betweenFAME (Fatty Acid Methyl Ester) and HVO (Hydro GeneratedVegetable Oil) which, incidentally, Finnish Neste is the world lead-er in. For biofuels can also count pyrolysis oil (produced by residualforest) which is interesting for Finnish forest industry as it strugglesC – Article written by MP Jörgen Pettersson in Shippax after participation at Future Ships Conference 25to find new sources of revenue when the paper exports are nearlywiped out. From an emission point of view, biofuel is a strong alter-native. Greenhouse gases are negligible compared to fossil fuels andsulphur emissions are minimal. Particulate emissions are not ac-knowledged, but some research has indicated that the amount ofcarcinogens are smaller in biofuel.AlcoholDuring the year 2013 a hundred million tons of methanol was pro-duced in the world. The ceiling however is far away, it is very easy tomanufacture more. Ethanol is slightly smaller in volume, seventy-five million tons per year, but it is already being used on land vehi-cles. Not least in Brazil ethanol is an increasingly common fuel.Among the shipping operators, Swedish shipping conglomerateStena examines alcohol as fuel and argue that availability does notpose as any major problems. Using natural gas production emissionof greenhouse gases are the same as with LNG; Zero. Sulphur emis-sions are also zero, and the amount of particles in the alcohol aswith LNG is equal to zero.OtherThere are also other fuel alternatives, but not on a large scale. Yet.This may concern storing electrical energy in an accumulator, whichis coming up and about in various contexts, including at sea. Algaeis an option which in fact even helps to actually clean the environ-ment. The cultures are extremely effective due to that the algae’s arerich in fatty acids and growing rapidly.Now there is also increasingly more reliable way to clean hydrocar-bons, which makes it possible to transform plastic and householdwaste to fuel by pyrolysis and/or depolymerisation.The effects of these different fuels on the environment depends onhow the production will go about, for example, the algae living ac-tually in carbon dioxide which reduces the amount of greenhousegases in the atmosphere.Jörgen Pettersson26 C – Article written by MP Jörgen Pettersson in Shippax after participation at Future Ships ConferenceFACTSLNG IN BRIEF• Liquid Natural Gas broadly complies with all therequirements that new rules today put on fossil fuels.• LNG is completely free of sulphur emissions.• The price of LNG gas is predicted to be more stable and lesssensitive to economic cycles than the price of oil.• The availability of LNG is considered to exceed the nowknown oil reserves.• LNG is expected to almost certainly become the main shipfuel in the future.FUTUREAt the seminar Future Vessels Tore Longva, DNV-GL [Det NorskeVeritas - Germanischer Lloyd], 150 years in the year!, held a talkabout how the world looks like in 2050. His conclusions:• The world’s population is composed of nine billion people, sixbillion of them live in cities. A very much larger middle classin China places tremendous demands on that what ishappening at sea is environmentally friendly.• Shipping must be digitally and transparent. Everything isvisible and it affects the image of what is happening.• Our elements do not last forever. We have to deal withlimitations in the extraction of fossil fuels along with otherelements.• It will take 80 per cent more energy than today to geteverything to swim. It is estimated that economic activityworldwide will quadruple which require force in many ways.C – Article written by MP Jörgen Pettersson in Shippax after participation at Future Ships Conference 27TODAY’S MARITIME TRANSPORT IN FIGURES• 7-11 percent of the value of a commodity is made up oftransport costs.• 0.23 percent represents insurance requirements,during the years 2012-2012.• 90 per cent of today’s ships are reused.• 20.000 marine organisms are introduced every year, there areso many good reasons to keep your eyes on invasive species.• 5.000 tons of oil is spilled ”accidentally” every year. (2010-2012)• 900 million tons of carbon is emission by shipping each year.• 22 million tons of nitrogen. Per year.• 12 million tons of sulphur dioxide each year from shipping.Baltic Sea Parliamentary Conference Secretariatwww.bspc.netBSPC Secretariatc/o Lennéstraße 119053 SchwerinGermanyPhone (+49) 385 525 2777