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Air Pollution from Ships in Danish Harbours: Feasibility Study

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Air Pollution from Ships in Danish Harbours: Feasibility Study THESIS FOR DEGREE OF DOCTOR OF PHILOSOPHY Air Pollution from Ships in Danish Harbours: Feasibility Study of Cold-ironing Technology in Copenhagen FABIO BALLINI Department of Naval, Electrical, Electronic and Telecommunication Engineering UNIVERSITY OF GENOA, Italy 2013 BALLINI FABIO Department of Naval, Electrical, Electronic and Telecommunication Engineering (DITEN), University of Genoa, Italy ABSTRACT Annex VI of the MARPOL Convention (IMO) and a number of EU directives, principally Council Directive 1999/32/EC, set the regulatory framework for the shipping industry and signature member states, while at the same time limiting unilateral regulatory measures. This thesis has studied best-practice examples of unilateral emission control in the North Sea and Baltic Sea region. The main study case has been the Port of Copenhagen. To accommodate the growing cruise traffic, a new cruise pier has been constructed that is prepared for cold-ironing, a technology that allows vessels at berth to use shore power rather than electricity generated by auxiliary engine. To assess the socio-economic impact of this technology, I applied an advanced external air pollution evaluation model, studying emissions from international shipping in the North Sea and Baltic Sea within the specific timeframe of May-August 2012. My calculations demonstrated that the total external health cost of emissions from cruise ships at berth in Copenhagen within the 5-month timeframe was €5,384,086. My calculations also showed that a scenario of 60% of visiting cruise ships using shore power (i.e. approx. the total capacity of the proposed cold ironing utility) would result in an i external health cost saving of NOx SO2 and PM emissions respectively of €2,675,384, €28,535 and €175,590. My cost-benefit analysis demonstrated that the external health costs would balance the capital cost in harbour-side cold-ironing infrastructure in 10-15 years. The thesis also identified two prerequisites for the economic feasibility of shore power in Copenhagen. Firstly, Denmark needs to obtain an exemption from Community Directive (2003/96/EC), Article 14(1)(c) to exempt vessels from paying local Danish environmental tax on shore power. Secondly, a pool of major Baltic destinations needs to be created to ensure that cold-ironing becomes a benchmark incentive-based technology in the region with which to reduce emissions in harbour environments. Keywords: air pollution, cost-benefit analysis, ship exhaust emissions, socio-economic impact, cost-effectiveness, cold-ironing technologies, shore power, impact assessment, feasibility study, external heath costs, investment cost, international maritime law, incentive-based emissions reduction, abatement technology, market penetration, pooling, business case. ii iii iv INDEX INTRODUCTION…………………………………………………..…………………………………………………………..1 1.1.STUDY BACKGROUND……………………………………………………………………………………………………1 1.2 AIM AND RESEARCH QUESTIONS…………………………………………………………………………………..3 1.3METHODOLOGICAL APPROACHES AND SCIENTIFIC FOUNDATION……………..…………………..5 2. THE REGULATORY FRAMEWORK………………………………………………………………………………….7 2.1INTERNATIONAL REGULATIONS…………………………………..………………………………………………….7 2.2 EU REGULATIONS…………………………….……………………………….………………………………………….14 2.3 REGULATIONS APPLYING TO DANISH PORTS…………..……………………………………………………18 2.3.1 POLICY TO REDUCE NOx EMISSION IN DENMARK………………............................19 2.4 COST BENEFIT OF TREADABLE EMISSION CREDIT SYSTEM……………………………………………20 2.5 NORWEGIAN NOx TAXATION AND SUBSIDIES………………………………………………………………23 2.6 NOx TAXATION AND STATE SUBSIDIES IN AN EU PERSPECTIVE……………………………………25 2.7 PM TAX ON PORT EMISSIONS………………………………………………………………………………………29 2.8 DIFFERENTIATED PORT DUES……………………………………………………………………….………………30 2.9 VOLUNTARY AGREEMENTS AND CONSORTIUM BENCHMARKING……………………………….33 3. ABATEMENT TECHNOLOGIES AND ALTERNATIVE FUELS………………………….………………….36 3.1 COST OF NOX ABATEMENT TECHNOLOGY…………………………………………………..……………….36 3.2 USING WATER TO LOWER THE COMBUSTION TEMPERATURE……………………………………..37 3.2.1 WIFE ON DEMAND……………………………………………………………….………………………38 v 3.2.2 HUMID AIR MOTOR……………………………………………….…………..…………………………39 3.3 TREATMENT OF THE EXHAUST GAS……………………………………………….…………………………….39 3.3.1 SCRUBBER…………………………………………………………….……………..……………………….39 3.3.2 SELECTIVE CATALYTIC REDUCTION (SCR)…………………….………………….….………...40 3.3.3 EXHAUST GAS RECIRCULATION (EGR)……………………………………………………………41 3.3.4 LIQUEFIED NATURAL GAS (LNG)………………………………………….…………..…………..43 4. COLD-IRONING TECHNOLOGIES ………………………….………………………….….……………………..47 4.1 COLD-IRONING TECHNOLOGY IN CRUISE SHIPS……………………..…………………………………….47 4.2.ISO STANDARD: HIGH VOLTAGE SHORE CONNECTION (HVSC) SYSTEMS.…….……….……...51 4.3 SYSTEM DESCRIPTION…………………………………………………………………….……….………….……….52 4.4 WORK BARGES AND LNG POWER BARGES…………………………………………………………..………53 4.5 COLD-IRONING AS RETROFIT………………………………………………..……………………………………..56 4.6 CURRENT COLD-IRONING MARKET SHARE…………………………….….…………………………………58 4.7 COLD-IRONING PENETRATION IN THE BALTIC SEA.………….……………….………………………….60 5. DANISH ELECTRICITY SUPPLY – THE NORDIC ENERGY MIX AND THE COPENHAGEN CLIMATE PLAN 2015…………………………………..……………………………………………………………….62 5.1 NORDIC ENERGY MIX…………………………………………………………………………….……………………62 5.2 DANISH ELECTRICITY SUPPLY…………………………………………………………………………….………..64 5.3. COPENHAGEN CLIMATE PLAN……………………………………………………………..…………………….65 vi 6. HEALTH COST- EXTERNALITY OF AIR POLLUTION IN DENMARK………………………….……..68 6.1 INTRODUCTION…………………………………………………………………………………………………………..68 6.2. THE EXTERNAL VALUATION OF AIR POLLUTION MODEL ……………..…………..………………..70 6.3 DEFINITION OF THE SCENARIOS……………………………………………………………………………….….71 6.4 PRESENT AND FUTURE HEALTH IMPACT IN EUROPE AND DENMARK OF INTERNATIONAL SHIPPING ……………………………………………………………..………………………76 6.5 EXTERNALITY COSTS PER KG EMISSION………………………………………………………………………..79 7. PRESENTATION OF STUDY CASE: COPENHAGEN CRUISE PORT.……………………………………82 7.1 CRUISE INDUSTR………………….……………………………………………………………………………………...82 7.2TOTAL TRAFFIC ………………………………..……………………………………………………………………….….82 7.3 SIZE OF VESSELS…………………………………………………………………..……….……………………….…….84 7.4 COMPETITIVE POSITION ………………………………………………..…………………………………………...88 7.5 LOGISTICS…………………………………..……………………………………….…………………………………….…92 7.6 ENVIRONMENTAL IMPACT………………………………………………………………………………….……….93 8.COLD IRONING FEASIBILITY AND COST BENEFIT……………………………………………………….100 8.1 COST OF ON-BOARD GENERATION OF ELECTRICITY USING AUXILIARY ENGINES…………………………………………………………………………………..……………….100 8.2 ELECTRICITY COST: MARKET RATE AND REDUCED RATE……..………………………………….....102 8.3 COLD-IRONING BUSINESS CASE …………………………..…………………………………………………….103 8.4 CALCULATION OF EMISSION FACTORS OF AUXILIARY ENGINES………………..………………..108 8.5 TOTAL EMISSIONS REDUCTION…………………………….….………………………………………………..108 vii 8.6 EXTERNAL HEALTH COST ……………………………………………..…………………………………………..110 8.7. COST-BENEFIT ANALYSIS (CBA)…………………………………………………..…………………………….116 9. ANALYSIS AND CONCLUSIONS…………………………………………………………..………..……………120 10 FUTURE WORK…………………………………………………………………………………………….…………126 REFERENCES………………………………………………………………………………………………………….…….127 APPENDIX……………………………………………………………………………………………………………….…..140 viii ix x ACKNOWLEDGMENT I would like to thank my supervisor Associate Professor Riccardo Boz- zo, the Department of Naval, Electrical, Electronic and Telecommunica- tion Engineering, University of Genova, for his scientific support and guidance during the work on this thesis. And I would also like to thank Jørgen Brandt, Head of Section, and Helge R. Olesen, Senior Advisor, at the Department of Environmental Science & DCE, Aarhus University, for their scientific guidance and valuable advice. I would like to thank Kirsten Ledgaard, Director of Planning, By & Havn, for her help and assistance and Bengt Olof Jansson from Copen- hagen Malmö Port for his valuable guidance. I would also particularly like to thank Kristian Anders Hvass and Profes- sor Niels Mygind, Department of International Economics and Manage- ment, Copenhagen Business School, for their scientific guidance. And I would also like to thank the Copenhagen Business School for hosting me in Copenhagen during my fieldwork. Finally, I would like to thank friends and colleagues at the department who helped me by answering my many questions and for our inspiring talks. xi xii LIST OF ABBREVIATIONS AE Auxiliary Engine ATRS Air Transport Research Society BaS-NoS Baltic Sea + North Sea (pertaining to EVA) BIMCO Baltic and International Maritime Council CAFÉ Clean Air for Europe CEEH Centre for Energy, Environment and Health CH4 Methane CO Carbon monoxide CO2 Carbon dioxide CO(NH2)2 Urea CMP Copenhagen Malmö Port CTM Chemical Transport Model DEHM Danish Eulerian Hemispheric Model DKK Danish currency unit (kroner) ECA Emission Control Areas EEB European Environmental Bureau EEDI Energy Efficiency Design Index EGR Exhaust Gas Recirculation ENSO European Network of Transmission System Operators for Electricity EPA Danish Environmental Protection Agency EU The European Union EVA External Valuation of Air Pollution Model GAINS Greenhouse Gas and Air Pollution Interactions and Synergies HAM Humid Air Motor HVSC High-Voltage Shore Connections xiii IMDG Code International Maritime Dangerous Goods Code IMO The International Maritime Organization IPPC Integrated Pollution Prevention and Control ISO International Organization for Standardization KBH2025 Copenhagen Climate Plan LNG Liquefied Natural Gas MARPOL International Convention for the Prevention of Pollution from MCR Maximum Continuous Rotation MGO Marine Gas Oil N2 Nitrogen NaOH Caustic soda NEC National Emission Ceilings NECA Nitrogen Oxide
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