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Canada / New England Cruise Symposium“Green Cruising – Managing Environmental Impact”

June 9th, 2010

North West & Canada Cruise Association

John Hansen, President

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John Hansen, President, North West & Canada Cruise

Association, Moderator

Michael Crye, Executive Vice President Technical & Regulatory

Affairs, Cruise Lines International Association

Paul Topping, Manager Environmental Protection, Transport

Canada

Rich Pruitt, Director, Environmental and Public Health

Programs - Royal Caribbean International / Celebrity Cruises

Tom Dow, Vice President-Public Affairs, Carnival Corporation & PLC

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SHIP DEVELOPMENT

Princess Patricia : Year built 1962 Carnival Dream : Year built 2009

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Fundamentals for a viable & sustainable cruise sector

Quality Product /Destinations

Market Demand

Health, Safety and Security

Community Relations

Environmental Protection

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CANADA NEW ENGLANDCRUISE SYMPOSIUM

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Michael Crye, EVP

Cruise Lines International Association

(CLIA)

“HOW IS THE SHIPPING/CRUISE INDUSTRY

REGULATED?”

Bodies of the United Nations develop international treaties:

UN,

IMO

ILO

WHO

ISO

REGULATORY BODIES

A. Law of the Sea Treaty (LOS)B. Safety of Life at Sea Treaty (SOLAS)C. International ship and Port Facilities Code (ISPS)D. International Safety Management Code (ISM)E. International Convention for the Prevention of Pollution

form Ships (MARPOL)F. Standards for Training Certification and Watchkeeping

(STCW)G. Consolidated Maritime Labour Convention (MLC) (not yet

in effect)H. International Health Regulations (IHR)I. Ballast Water Convention (not yet in effect)

What are those treaties?

TREATIES

How do these agencies of the United Nations develop these treaties?

UNITED NATIONS

Member states, most of the countries of the world,collaborate and negotiate the treaties that control shipping actions throughout the world’s oceans.

The treaties become law in a particular country when the country ratifies the treaties and incorporate them into their law.

How are the Conventions enforced?

UNITED NATIONS

Flag State Enforcement

Each ship is registered in a particular country and if that country has ratified the convention, then it has the responsibility to enforce the convention.

The flags that CLIA ships fly include, Bahamas, Netherlands, UK, Bermuda, Panama, Marshall Islands, Malta. All have ratified the above conventions so they apply to the CLIA ships wherever they operate.

Many countries including the US and Canada delegate their inspection functions to organizations called classification societies like American Bureau of Shipping, Lloyd’s Register, Det Norske Veritas.

How are the Conventions enforced?

UNITED NATIONS

Port State Control

Each of the above treaties is also subject to whatis called port state control which means that when a ship visits a particular country,that country can enforce the requirements of the Convention on those ships in its waters.

How are the Conventions enforced?

UNITED NATIONS

Domestic Laws

Countries like Canada and the U.S. have their own laws that apply to ships that operate within their waters. These laws can be those which implement the Conventions and incorporate them into their laws like the U.S. Act to Prevent Pollution from Ships or the Clean Water Act or Clean Air Act. In Canada the Canada Shipping Act, Migratory Bird Act, and Regulations for the Prevention of Pollution from Ships and for Dangerous Chemicals are some examples.

MICHAEL CRYE

EVP

mcrye@cruising.org

Washington D.C. Area Office:

2111 Wilson Boulevard, 8th Floor

Arlington, Virginia 22201

(703) 522-8463

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Regulating vessel air emissions

Canada New England Cruise Ship SymposiumJune 9, 2010Paul Topping

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BackgroundNorth American Emission Control Area

• The North American Emission Control Area proposed by Canada, United States and France was adopted on March 26, 2010

• It is the largest such area established by Parties to Annex VI of the MARPOL Convention (along coasts out to the 200 nautical limit, south of 60°N and Hawaii)

• Its stringent standards are expected to reduce sulphur oxides by 96 percent and nitrogen oxides up to 80 percent as well as reduce other pollutants

• This approach will protect health of North Americans on both sides of the border

• The measures will come into force in August 2012.

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North American Emission Control Area

Adopted March 26, 2010.

___________

Includes waters under the jurisdictions of Canada, the United States, and France.

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Drivers

• Government of Canada Commitments on Clean Air and regulatory alignment with international standards

- Accession to Annex VI to the International Convention for the Prevention of Pollution from Ships (MARPOL)

- Adoption of the North American Emission Control Area

• A Harmonized Environmental Agenda for an Economically Integrated North America

- North American Emission Control Area resolves US court case

• Transport Canada’s Moving Forward Policy to align with IMO Standards for vessels carrying international trade

• Support of Canada’s domestic fleet to modernize

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Key dates and provisions

• July 1, 2010, new MARPOL Annex IV

- Baltic and North Sea ECA 1.5% to 1% sulphur

• January 1, 2011, new ships -Tier II NOx

• January 1, 2012, global sulphur level 3.5%

• August 1, 2012, North American ECA (1% sulphur)

• January 1, 2015, all ECAs reduced to 0.1%

• January 1, 2016, new ships in ECAs – Tier III NOx

• January 1, 2018, IMO review of low sulphur fuel

• January 1, 2020, global sulphur level to 0.5%

• January 1, 2025, alternate date for 0.5% sulphur

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Nitrogen oxide standards

• Tier I

• 17.0 g/kWh when n is less than 130 rpm;

• 45 · n(-0.2) g/kWh when n is 130 or more but less than 2,000 rpm;

• 9.8 g/kWh when n is 2,000 rpm or more.

• Tier II

• 14.4 g/kWh when n is less than 130 rpm;

• 44 · n(-0.23) g/kWh when n is 130 or more but less than 2,000 rpm;

• 7.7 g/kWh when n is 2,000 rpm or more.

• Tier III*

• 3.4 g/kWh when n is less than 130 rpm;

• 9 · n(-0.2) g/kWh when n is 130 or more but less than 2,000 rpm;

• 2.0 g/kWh when n is 2,000 rpm or more;

• * IMO to carry out review between 2012 and 2013

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Technical options for compliance: sulphur

• Sulphur levels in fuel are a performance standard

• Compliance can be meet by

- Low sulphur fuel

• Distillates

• Alternative fuels

- Emission control systems

- IMO Guidelines to assess emission control systems

• Option for fuel with next lowest sulphur content if compliant fuel cannot be found

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Vessel Air Emissions in the Great Lakes

• US introduced increased air emissions standards for vessels operating in the Great Lakes in the December 2009 rules to implement the North American ECA

• US subsequently moved to exempt certain vessels.

• Canadian regulations to implement the North American ECA will also address emissions in the Great Lakes

• Improved environmental standards are consistent with Government of Canada commitments

• Canada seeks a bi-national approach to air emission regulations in consultation with industry

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Next steps

1) 1) Detailed Assessment of Options

Alignment of regulatory options with Government of Canada policy commitments and considerations

- Overall SOx and NOx reductions, harmonization of approach, health improvements, environmental improvements, competitiveness of domestic fleet, fleet renewal

Ease of industry compliance

- Available technologies and fuels, cost of implementation, level of complexity

Government capacity to implement regulations

2) 2) Decision on option for the Great Lakes in November