Impacts of the Atlantic trade on shipping transport emissions and the international regulation

Transcription

1 Impacts of the Atlantic trade on shipping transport emissions and the international regulation Jean Monnet Network Conference: Energy and Transportation in the Atlantic Basin: Implications for the European Union and Other Atlantic Actors Center for Transatlantic Relations (CTR) of Johns Hopkins University (JHU) SAIS July 20, Washington D.C. Jordi Bacaria, CIDOB Barcelona & Universitat Autonoma de Barcelona Natalia Soler-Huici, LLM, University of Iceland

2 Introduction 1. The revolution of the containers and the decrease of the cost of the maritime transport 2. Evolution of trade and maritime industry in the Atlantic basin (North-South, East-West) 3. The improvement of logistics and the expansion of global value chains (GVCs) 4. Trade facing maritime Industry emissions 5. International regulations of maritime industry emissions 6. Unilateral action by the EU instead of multilateralism 7. Conclusions

3 1. The revolution of the containers and the decrease of the cost of the maritime transport

4 Containerization Container-carrying capacity has increased 1,200% since 1968, from the first vessel of 1,530 TEU until the last generation vessels of 19,000 o more TEU The fuel efficiency of container ships (4,500 TEU capacity) has improved 35% between 1985 and container ships have grown in size from just 1,500 TEU in 1976 to ships able to carry in excess of 12,000 TEU today, with some ships on order capable of carrying 18,000 TEU

5 The growth of world trade (deflated): the Atlantic region is the least important in container trade relative to other regions Source: Daniel M.Bernhofen D., El-Sahli Z., Kneller R., "Estimating the Effects of the Container Revolution on World Trade, Lund University, Working Paper (February 13, 2013), p.19 < a582cffefb4c > (accessed June 18, 2017).

6 Efficiency On average a container ship emits around 40 times less CO2 than a large freight aircraft and over three times less than a heavy truck. Container shipping is two and a half times more energy efficient than rail and 7 times more so than road fuel prices are an important driver for design efficiency

7 Source: World Shipping Council, About the Industry. Container Ship Design, 2017, < > (accessed June 23, 2017)

8 From the regional perspective weekly capacities are 135,501 TEUs in the Transatlantic Region, 442,261 TEUs in the Trans-Pacific and 397,435 TEUs in FEAST- Europe. the Atlantic region is the least important in container trade relative to other regions

9 the introduction of containers has been more important for international trade than FTAs. In a set of 22 industrialized countries containerization explains a 320% rise in bilateral trade over the first five years after adoption and 790% over 20 years. By comparison, a bilateral free-trade agreement raises trade by 45% over 20 years and GATT membership adds 285%

10 2. Evolution of trade and maritime industry in the Atlantic Basin (North-South, Est-West)

11 Maritime trade routes actually indicate that the Atlantic basin is unimportant compared to the main routes between Asia- Europe and Asia-North America. Among the Atlantic routes the North Atlantic is the most relevant in Latin America and the Caribbean (LAC), where connectivity limitations and below-average logistics performance are considerable barriers to integration and growth in maritime trade. Infrastructure shortcomings, operational inefficiencies, high port costs, lack of integration in logistics platforms (e.g. electronic single windows) result in higher regional maritime transport costs

12 ATLANTIC TRADE ROUTES Trade between an origin group of countries and a destination group of countries is referred to as a trade route. Top Trade Routes (TEU shipped) 2013 Route Atlantic Basin West Bound East Bound North Bound South Bound Total North Europe-North America 2,636,000 2,074,000 4,710,000 North Europe/Mediterranean-East Coast South America 795, ,000 1,680,000 North America-East Coast South America 656, ,000 1,306,000 Other top routes Asia-North America 7,739,000 15,386,000 23,125,000 Asia-North Europe 9,187,000 4,519,000 13,706,000 Source: Adapted from "World Shipping Council" < >

13 TOTAL CARGO VOLUME TONS, 000s RANK PORT COUNTRY MEASURE TONS RANK PORT COUNTRY TEUs 5 Rotterdam Netherlands Metric Tons Rotterdam Netherlands South Louisiana United States Metric Tons Antwerp Belgium Houston United States Metric Tons Itaqui Brazil Metric Tons Hamburg Germany New York / New Jersey United States Bremen/Bremerhaven Germany Metro Vancouver Canada Metric Tons Valencia Spain Hamburg Germany Metric Tons Algeciras - La Linea Spain Santos Brazil Metric Tons New York/New Jersey United States Metric Tons Santos Brazil Itaguai Brazil Metric Tons Savannah United States Felixstowe United Kingdom Gioia Tauro Italy Piraeus Greece Balboa Panama Amsterdam Ports Netherlands Metric Tons Turkey Algeciras - La Linea Spain Metric Tons Tanger Morocco Marseilles France Metric Tons New Orleans United States Metric Tons Beaumont United States Metric Tons Corpus Christi United States Metric Tons Colon Panamá Cartagena Colombia Le Havre France Bremen/Bremerhaven Germany Metric Tons Virginia United States Long Beach United States Metric Tons Valencia Spain Metric Tons Southampton United Kingdom Le Havre France Metric Tons Genoa Italy Dublin Ireland Houston United States Charleston United States Baton Rouge United States Metric Tons Barcelona Spain Grimsby and Immingham United Kingdom Metric Tons Trieste Italy Metric Tons Manzanillo Panama Virginia United States Metric Tons Chennai India Lake Charles United States Metric Tons Genoa Italy Metric Tons Zeebrugge Belgium Montreal Canada Buenos Aires (incl. Exolgen) Argentina Freeport Bahamas Sines Portugal Sao Sebastiao Brazil Metric Tons Plaquemines United States Metric Tons Dunkirk France Metric Tons La Spezia Italy Marseilles France Barcelona Spain Metric Tons San Juan Puerto Rico London United Kingdom Metric Tons Bergen Norway Metric Tons WORLD PORT RANKINGS CONTAINER TRAFFIC TEUs (Twenty-Foot Equivalent Units), 000s 96 London United Kingdom Paranagua Brazil Metric Tons Limon/Moin Costa Rica NOTE: The cargo rankings based on tonnage should be interpreted with caution since these measures are not directly comparable and cannot be converted to a single, standardized unit. Sources: Agência Nacional de Transportes Aquaviários - ANTAQ(Brazil), Institute of Shipping Economics & Logistics ; U.S. Army Corps of Engineers' Waterborne Commerce Statistics Center, Secretariat of Communications and Transport (Mexico), Waterborne Transport Institute (China); AAPA Surveys ; various port internet sites.

14 connections between ports and liners are important to maintain high efficiency and lower transportation costs. the first Atlantic port in traffic both in volume and containers is Rotterdam. I In containers among the first 30 are 6 European ports, Rotterdam (11), Antwerp (14), Hamburg (17), Bremen/Bremerhaven (24), Valencia (28), Algeciras - La Linea (29), and one in U.S., New York /New Jersey (23).

15 3. The improvement of logistics and the expansion of global value chains (GVCs)

16 The development of the GVC Global Value Chains is associated with the decrease in the cost of shipping and its efficiency. technological advances and ICT have reduced trade and co-ordination costs. foreign direct investment (FDI) has been a major driver of growth of GVCs

17 What is important with GVC and international relations are the relationship between the countries' contribution to GVC and their geopolitical strategies Saudi Arabia is the G-20 country that has least incorporated imported inputs used in exports (around 1% in 2009), followed by Russia (5%), Brazil (9.5% and United States (10%). By contrast, Canada, China, France, Germany, India, Italy, Korea, Mexico and Turkey exceed 20% countries that are little integrated in the GVCs follow opportunistic and isolationist strategies and are more prone to conflicts. However, the countries which are most integrated in the GVCs are following co-operative strategies with their neighbors and are closer to multilateralism

18 G20 countries with less backward participation Total GVC participation Backward Participation Forward Participation Saudi Arabia Brazil Indonesia Rusia Argentina Australia Japan United States G20 countries with more backward participation Korea China Mexico Italy Turkey Germany India Canada UK Source: Elaborated from OECD/WTO (2016), "Trade in value added (Edition 2016)", OECD- WTO: Statistics on Trade in Value Added (database). (Accessed on 02 July 2017)

19 Intermodal network There are some differences between U.S. and EU in transport connections and intermodal network The EU has an intermodal network that poses unique challenges because many countries are land-locked, or they do not have deep-water ports that can accommodate liner vessels. This means cargo often must transit long distances by truck, rail or barge, often through several countries, between the actual origin or destination and the port served by the liner vessel

20 Trans-European transport network (TEN-T) The second generation of the work plans of the 11 European Coordinators as approved in December 2016, establish the basis for action until Le links among different corridors such as the Atlantic, the Mediterranean, will improve the intermodal network in Europa and its connections with the Atlantic Basin

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23 Mediterranean corridor

24 4. Regulatory efforts that deal with emissions from international shipping

25 Effects of global warming for maritime transport Sea level rise: threatens port infrastructure affects clearance under bridges near coasts More frequent and extreme weather conditions: longer waiting time less reliable shipments

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27 Current regulation of shipping emissions in the context of the LOSC Annex VI of MARPOL (first adopted in 1997) Limits the main pollutants in ships exhaust gas (SO x and NO x ) Prohibits deliberate emissions of ozone depleting substances Regulates shipboard incineration and emissions of volatile organic compounds from tankers 2011 amendments to Annex VI to reduce CO 2 Energy Efficiency Design Index for new ships Ship Energy Efficiency Management Plan for all ships

28 Regional initiatives to control air emissions from shipping The 1979 Convention on Long-Range Transboundary Air Pollution as a precedent to global regulation The EU s strategy for integrating maritime emissions into the EU s policy for reducing its domestic GHG emissions in three steps: MRV of CO 2 emissions from large ships using EU ports Establishing GHG reduction targets for the shipping sector Market based measures

29 New challenges Developing economies and the IMO s measures to reduce GHG Energy transition: methane emissions are projected to increase rapidly as the share of LGN in the fuel mix increases

30 CONCLUSIONS The revolution of the containers in the 70s and the technological change has given rise to the revolution of the transports in manufactures trade that explains the GVC and the globalization Container shipping is two and a half times more energy efficient than rail and 7 times more so than road. Fuel prices are an important driver for design efficiency The Atlantic region is the least important in container trade relative to other regions The introduction of containers has been more important for international trade than FTAs

31 Countries that are little integrated in the GVCs follow opportunistic and isolationist strategies and are more prone to conflicts. Countries which are most integrated in the GVCs are following co-operative strategies with their neighbors and are closer to multilateralism The EU has an intermodal network that poses unique challenges because many countries are land-locked, or they do not have deep-water ports that can accommodate liner vessels

32 Maritime transport is not a great contributor to climate change. CO2 emissions are projected to increase between 50 and 250 per cent in the period up to 2050 for business as usual scenarios In 2003 the European Commission set out a phased strategy for progressively integrating maritime emissions into the EU s policy for reducing its domestic GHG emissions These EU measures have encountered fierce opposition from the industry

33 NEW CHALLENGES Maintain trade and the GVCs improve the economic development of the South Atlantic basin reduce emissions per unit, increasing efficiency even at low energy prices Adjusting emissions from maritime transport to the objectives of the Paris agreement Build a multilateral system for regulating emissions and effective control of the maritime industry