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Cooperation Towards Cleaner Emissions Cooperation towards cleaner emissions A process design for the cooperation of the port authorities of Singapore and Rotterdam to reduce bunker emissions Final Report November, 2008 M. G. Minnée Master Thesis, SPM 5910 Systems Engineering Policy Analysis and Management, TU Delft The picture on the front page shows the bunkering of the ‘Emma Maersk’ by the ‘VT Vlissingen’. Source: Port of Rotterdam Authority Cooperation towards cleaner emissions A process design for the cooperation of the port authorities of Singapore and Rotterdam to reduce bunker emissions Final Report November, 2008 Master Thesis, SPM 5910 Systems Engineering Policy Analysis and Management, TU Delft Name: M. G. Minnée Student number: 1102230 Email: [email protected] Graduation Committee: Dr. ir. R.M. Stikkelman TPM faculty Dr. A.F. Correljé TPM faculty M. Prinssen MSHE Port of Rotterdam Authority Dr. ir. P.M. Herder TPM faculty (substituting Prof. M. Weijnen) II Acknowledgements__________________________________ This report is the result of a research done to finalize my master’s degree in Systems Engineering, Policy Analysis and Management (SEPAM). The result could not have been realized without the help of several people: I would like to thank all those who contributed to the quality of my work: Rob Stikkelman for his guidance and keeping me ‘on the right track’ during the entire period and Paulien Herder and Aad Correljé for their input, ideas and reviews during meetings. I would like to thank Port of Rotterdam Authority (PORA) for the opportunity to work on this specific subject, for the experience of working at an office and for their support for my visit to Singapore. In particular I would like to thank Maurits Prinssen for his help and guidance throughout the entire period. It has been a pleasure sitting across the table from you. My gratitude also goes out to the Maritime and Port Authority of Singapore (MPA) and the Nanyang Technological University (NTU) for the facilities they provided me with during my stay in Singapore. Although my stay in Singapore was relatively short, it was very fruitful. This could not have been without the help of many people: mr. Tan Soon Keat for providing a place to work at the NTU during the last two weeks of my stay; Annoek van den Wijngaart for her help and mediation with the MPA in advance and during my stay in Singapore; mr. Maserati for getting me in contact with many of his colleagues and mr. Yow for organizing a working place during the first week of my stay, for showing a large interest in my research and for arranging several interviews during my stay. This research would not have been the same without the help of all those who contributed to the substance of my research. From the Port of Rotterdam Authority, Mr. Backers, Mr. Sebus and Mr. Stadhouders were willing to help me several times; I would like to thank them for their time and effort. Furthermore, I would like to thank all interviewees for their help and the information they provided: In the Netherlands; Mr. Kolpa (Ministry of V&W), Mr. Brutel de la Rivière (KVNR) and Mr. Nobel (Shell); In Singapore; Mr. K. Alam, Mr. Tan, Capt. Solomon George, Mr. Goh Teik Poh (all from APL), Mr. Z. Alam, Mrs. Hoh, Mr. Leong (all from MPA) and Mr. Sivanandam and Mr. Prodduturi (both from SPC). On a more personal note, I would like to thank all my friends and family for their support; in particular Daisy and Marlies who took the effort of reading and improving my report. I specifically like to thank my parents and my housemates; thank you for your patience, laughs and support during the entire period. Malou Minnée November, 2008 III Executive Summary_________________________________ Most of the environmental efforts in transportation have concentrated on the transport on land. Transport at sea however was often forgotten. In April 2008 international agreements (adopted in October 2008) were made by International Maritime Organisation (IMO) to reduce the percentages of polluting substances in emissions caused by the use of bunker oil. The port authorities of Rotterdam and Singapore have indicated that this reduction is a good start but more can be done. Both authorities have agreed to investigate the possibilities to handle the problem of dealing with the emission regulations in the future together [Stikkelman, 2007]. Cooperation could lead to a situation that is beneficial compared to individual approaches of emission reduction. This leads to the following research question: What are the benefits and drawbacks for the Port Authorities of Singapore and Rotterdam if they cooperate in taking measures to reduce emissions due to bunker oil and what should the cooperation process look like? In order to answer this research question a comprehensive analysis was made that focuses on the technical system, the economical system and the stakeholder network in which bunker oil is situated in the Netherlands and in Singapore. As a result of this analysis, the design space in terms of solutions and trade- offs was determined in which the possible cooperation between both ports can take place. Theory and the analyses mentioned above served as input for the process design. Assuming that there would be benefits from cooperation, a ‘quick and dirty’ scan of the organisational structure was made to determine what the cooperation process should look like. This turned out to be a process, based on the theory of process management. However, the theory of process management does not incorporate the management of possible cultural differences, whereas these might be expected between such different countries. The idea of using process management which was based on a quick scan of the overall organisational structure led to several questions such as: “Will Singaporeans accept and work with process management?” Information from the analyses provided answers to these questions. The technical analysis showed that the bunkering systems in Singapore and Rotterdam do not differ on many parts. Singapore has more standardizations and formalizations for the bunker procedures and the bunker quality than Rotterdam does. Quality and quantity measures are done manually in Singapore while being fully automated in Rotterdam. These differences however, have little influence on the discussion whether or not cooperation is beneficial: they do not provide extra benefit but do not provide disadvantages as well. The analysis also showed that most damage by emissions is done in the coastal areas; therefore, this is the most interesting area to look at when defining a measures or regulation. In the economical analysis a general analysis was made of the bunker market. It was determined that cooperation of both ports will lead to an increase in the world market share. This means an overall reduction in competition between the two ports will take place in case of cooperation on emission reduction. In addition, the main factors were identified that have influence on the price of bunker oil on each other. The economical analysis also comprises a list of decision factors that determines the preference of ship-owners on which ports to bunker. Part of these decision factors are the economic factors. It was shown that a possible increase in costs (due to possible new regulations in Singapore and Rotterdam) would not necessarily mean that the ports would lose customers to other ports. This benefit from cooperation is however only present on the specific shipping route between Singapore and Rotterdam. Emission reduction measures on other routes do not have this extra benefit from cooperation. In general, extra costs on bunkering can also lead to effects outside the bunker market: ships might decide to call other ports not only for their bunker but also for their cargo. The analyses provide input for a list of techniques and policies that can reduce emissions, all with their own level of effectiveness. The fact that few of these have actually been implemented in practice is a result of the negative side-effects these solutions or measures have. The fact that there are so many stakeholders who have an interest in this issue does not contribute to quick and transparent decision-making on this topic. What is seen as the perfect solution for one stakeholder can be the worst solution for another. For this reason, no set of alternatives has yet been chosen to continue decision-making with. All options are still open. Most of the trade-offs between solutions and their negative effects are mentioned in chapter 7. IV An inventory was made of all parties with an interest in this subject and has resulted in a long list of stakeholders. Some of these stakeholders are very dedicated to this subject or are critical for the cooperation process since they have the authority to implement regulations on this subject. The Port of Rotterdam Authority does not have the authority to do so, which means they need the cooperation of other authorities. The Dutch authority to implement regulations dealing with emissions from vessels is spread over several stakeholders; this is in contrast with the centralized authority in Singapore. This is the first of several differences between Singapore and Rotterdam. Other cultural differences that were identified were the amount of branch and environmental organisations in the Netherlands compared to those in Singapore (none). The Singaporeans are very loyal to their superiors. These differences have no influence on whether or not cooperation between both ports leads to an extra benefit, but it does have its effect on the decision-making process: The Port of Rotterdam Authority finds itself in a network of stakeholders, all with significant powers and resources, while the Maritime and Port Authority of Singapore finds itself in a hierarchical system and is theoretically able to decide things by itself.
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