To be fast or to be furious?

Three years have passed since ICCT’s popular staff blog “Fast and Furious” discussed China’s bold actions to slash gasoline and diesel sulfur content for on-road vehicles and predicting a likely pivot to a focus on marine fuel in the near future.

Much of that prediction came true. Later that year, China Ministry of Transport (MoT) released an action plan to establish domestic emission control areas (DECA) in three key coastal regions. The DECA plans slashed the maximum marine fuel sulfur content for oceangoing vessels at berth by over 80% compared to the then average level. Following that announcement, both Yangtze River Delta and Shenzhen went a step further, promising early adoption of emission control areas in 2016.

That was fast. However, the DECA regulations are less “furious” than China’s requirements for road transport in important ways. First of all, the regulations only cover three key coastal regions, which is less than half of China’s eastern coastline (Figure 1). Many major port cities, including some of the world’s top container ports (e.g. Qingdao, and Xiamen), are not included. Second, the rules only mandate the fuel sulfur requirement during the ships’ parking time at ports for the first three years (2016-2018) of the four-year policy, therefore impacting only a small fraction (10% in the Pearl River Delta region) of the total coastal emissions from ships (Figure 2). Third, the fuel sulfur level targeted (0.5%, or 5000 ppm) is several orders of magnitude higher than for road diesel and only takes effect for transiting ships in 2019, one year before the International Maritime Organization’s (IMO) equivalent global sulfur cap which kicks in.

The good news is the China’s momentum to fight air pollution is still building. This year, China released its new three-year action plan to win the “Blue Sky War”, which advises that DECA should be expanded. Subsequently, MoT released a detailed plan for DECA 2.0, and is currently soliciting stakeholder input. The proposal expands the DECA coverage to all of China’s coastline starting in 2019 and further slashes the marine fuel sulfur content by another 80% for certain regions like Hainan Province starting in 2022. It also begins to address NOx emissions from the domestic fleet by adopting Phase II of the marine emission standards ahead of the original timeline.

China can indeed take quick action on environment when the government is sufficiently motivated. Unfortunately, these actions are likely to be watered down by coping measures taken by the ship operators. Our recent study on ship rerouting shows that the narrower the emission control area (ECA), and the bigger the price differential between ECA-compliant fuel and baseline marine fuels, the more likely ships will reroute to avoid the zone. When rerouting, ships can use cheaper but dirtier marine fuel, even it means a longer traveling distance. We estimate that an ECA of 12 nautical miles width could cover only 15% of all ship emissions, while a 100-nm ECA could regulate about 76% of ship air pollution within 200 nm of China’s shores (Figure 3). Part of the difference between these values is due to ship rerouting.

There is an alternative.  As on old African proverb states, “If you want to go fast, go alone. If you want to go far, go together.” If China wants to maximize the benefit of its ECA control zone, it can go beyond its own territorial waters and work through the IMO.  An IMO ECA designation would provide enforcement authority over foreign-flagged vessels out as far as 200 nm. This approach requires extensive research, time, and patience to collaborate amongst international stakeholders. If China wants to act fast, a porous 12 nm ECA may be as far as it can go on its own. Establishing the smaller ECA would demonstrate that China has exhausted domestic measures for ship emission control and is viewed as a stepping stone towards an IMO ECA. We are hopeful that a Chinese ECA application is on the horizon.

ICCT is in the process of evaluating the feasibility of an ECA in the Pearl River Delta. This comprehensive study will measure the cost-benefit of ECA implementation and compare that to other land-based control measures in 2030.

So, stay tuned for our next installment.  Maybe Fast and the Furious 3: Shenzhen Drift!

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