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UPDATE MARCH 2018: NRDC published a revised version of the incentive schemes report on its NRDC US webpage, serving a more international audience; and followed by multiple articles such as on Splash247 and on Green Ports Magazine as well as an NRDC blog.
Recognizing ships are one of the largest sources of air pollution, Shenzhen and Hong Kong have introduced incentive programs to encourage ships calling at their ports to use low-sulfur marine fuels and / or shore power. With the introduction of the China Domestic Emission Control Area (DECA) regulations, ships now call at core ports in the three DECA regions (including Yangtze River Delta, Pearl River Delta and Bohai Bay) must use low-sulfur fuel with no more than 0.5% sulfur content while at berth. The regulations will be further tightened in 2019, when ships are required to use 0.5% sulfur fuel anywhere inside the DECA regions. While Shenzhen and Hong Kong continue to offer low-sulfur fuel incentives, there are discussions in these two and other port cities on how to more better incent shipowners / operators go beyond what DECA regulations require.
An incentive program initiated by one port city, however, offers limited financial benefits for shipowners and operators, as eligibility criteria and reporting processes vary at different ports, so applying for incentives at one port at a time means extra administrative costs and efforts. A harmonized incentive program, in which multiple ports along major shipping routes or in the same country collaborate, allows participating ports to develop a consistent approach to reward ships’ environmental performance, and give them the opportunity to exchange insights and experiences to jointly improve the schemes. For shipowners and operators, these harmonized schemes could be more attractive as they can obtain incentives at each participating ports, and the harmonized process to demonstrate environmental performance also reduces administrative burden to apply for incentives.
This paper therefore provides an overview of major global and country-wide incentive and rating programs for encouraging shipowners / operators to reduce air pollution from their ships. The four industry-initiated programs, including the Environmental Ship Index (ESI), Clean Shipping Index (CSI), GHG Emissions Rating and Green Award, allow qualified ships to receive incentives from multiple participating ports and other incentive providers, hence offering the potential of much higher and continued rewards for ships adopting green practices and technologies. The three country-wide incentive programs, adopted by Norway, Sweden and Singapore, offer examples of programs that are designed for meeting a country’s own environmental and green shipping goals and for promoting research, development and adoption of green shipping technologies.