House of COMMONS








Tuesday 18 November 2008




Evidence heard in Public Questions 164 - 250




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Oral Evidence

Taken before the Environmental Audit Committee

on Tuesday 18 November 2008

Members present

Mr David Chaytor

Mark Lazarowicz

Jo Swinson

Joan Walley


In the absence of the Chairman, Joan Walley was called to the Chair




Memorandum submitted by Tyndall Centre


Examination of Witnesses


Witnesses: Dr Terry Barker, Programme Leader - Integrating Frameworks, and Dr Alice Bows, Tyndall Senior Research Fellow, Tyndall Centre for Climate Change Research, gave evidence.

Q164 Joan Walley: Thank you both very much indeed for coming along. We value the contributions that Tyndall has actually made to our Committee. The Government has repeatedly affirmed that its overall climate change goal is limiting the rise in global temperatures to no more than 2C, but to help set our current inquiry into context, could you briefly describe the scale and urgency of the cuts in annual emissions required by countries such as the UK in order for us to have a good chance of meeting this target? We really need to know what urgency there is about meeting the targets on an incremental level?

Dr Bows: The issue of aiming for 2C means that when you apportion emissions to different nations you need to be aware of the cumulative amount of emissions over a particular amount of time that can be released by each country in order to meet that 2C goal. If you look at what that actually means, if you look at what has come out of the latest IPPC report, they produce a carbon budget, if you like, for the century and if you know what your emissions are now and you know what the emissions are that you have released in the first few years of the century, you can work out what you have left for the remainder. What the results seem to illustrate is that if we do not peak our emissions globally by around 2015 then the kind of emission reductions that will be required post-2015 will be extremely challenging and we will essentially need to be decarbonising by between 2030 and 2050 globally to meet this 2C target. What that will mean for countries like the UK that release a lot of emissions already, so per capita emissions are very high, is that the sooner that we start to reduce those emissions the better and really we need to be looking at peaking our emissions within the next five years or so otherwise the emission reductions that will be required per year within the UK will need to be between six to ten per cent per year so extremely challenging and far in excess of those percentages that we are currently discussing.

Q165 Joan Walley: If what you are saying is so clearly supported by the evidence, which I think certainly our Committee accepts is the case, can you help us understand why national targets in this country and elsewhere are so far apart from the very steep emission cuts in the years to 2030? If what you are saying is based on the evidence, and that makes sense about the need to get there in this incremental way, why do we still have this gap?

Dr Bows: One of the problems is that what we are not doing is looking at the emissions that we have already released and also the emissions as they are growing at the moment. The emissions in the last six years have grown globally at around 3.3 per cent per year, I believe it is, which is greater in percentage terms per year than it has been in the last 100 years on average. Thus the rates of growth are increasing but often when people do an analysis they will assume that emissions can start to decrease from next year and because it is the accumulative emissions that are important, so because the area under the curve matters, if you like, between now and some future date, say, 2050 or 2001, if you do not account for the fact that the emissions are still rising and eating up a proportion of that budget very rapidly then your end point target will not be consistent with the climate change goal for which you are aiming. You need to account for those emissions in the short term and we tend to forget that emissions are still growing and we tend to forget that the emissions are already very high. In addition to that, we generally omit from our budgeting international aviation and shipping which will also eat up a proportion of our budget, and within the UK that is a reasonable proportion, so for aviation it is around six per cent in any one year and shipping it is difficult to say based on the data but it could be between five and six per cent as well.

Q166 Joan Walley: Did you want to add to that, Dr Barker?

Dr Barker: First of all, I would like to thank the Committee for inviting me to give evidence this morning. Secondly, I would say that my evidence is based on the Summary for Policymakers of the Fourth Assessment Report of the IPPC Working Group III, which I have worked on over the last four or five years. The Summary for Policymakers has a chart in it which shows the 2C target and its relationship with greenhouse gas concentrations and emissions. The main thing to be said about this chart is the degree of uncertainty and risk between trying to achieve a 2C target and the profile of emissions to achieve that target, and so there are uncertainties throughout the global climate system, from the scale of emissions right through to the effect of the damage at the end. As you know, the UNFCCC Framework for Climate Change has as its objective the "avoidance of dangerous climate change", and the European Commission has interpreted that as the 2C target and the UK Government has signed up to this 2C target. Going from 2C to the emission profile is fraught with uncertainties and indeed the science is far from complete. There were not enough studies covered at the time of the Fourth Assessment Report to say anything with certainty or even with reasonable scientific reliability. What we could say is something about a target which was much weaker than the 2C. This is a question of the probability of achieving that 2C. In fact, the evidence on the basis of the studies that have been done gives us, for the lowest category of studies, a 50 per cent or less chance of achieving 2C. Since we are talking about dangerous climate change we want to have a much higher probability of achieving it. In my view, it should be more like a 80 or 90 per cent chance of achieving it but to do that we would have to have a much lower concentration level, probably more like 350 ppm CO2 equivalent which is the kind of target that somebody like Jim Hanson would advocate and the group 350C, which is a group which was formed earlier this year. The issue really is that there is not enough scientific evidence on the modelling of these more stringent targets.

Q167 Joan Walley: So there is not enough scientific evidence?

Dr Barker: Scientific evidence to look at the more stringent targets. We have done a meta- analysis of what there is to work out the costs of going to the more stringent targets, and we have worked out that the costs are a very wide range of costs including benefits depending on the policies being followed whether the revenues from carbon taxes and auctions were recycled or not, and even that excludes some extremely substantial potential benefits, for example improvements in air quality in developing countries' urban areas.

Q168 Joan Walley: You are saying there is not enough scientific evidence. Are you involved in any further research?

Dr Barker: We are indeed. There is a major initiative by the European Commission's Directorate for Environment looking at 400 ppm CO2 equivalent. That is probably not sufficiently stringent but it is much better than the 450 and 550 which had been looked at in the earliest days. This is being complemented by work elsewhere. The different modelling approaches attempt to achieve these targets using the models and this yields different profiles of the emissions over the next century. There are widely different profiles possible. For example, at the moment we are at the beginning of a major global depression which may be greater than the Great Depression. During the Great Depression in 1929-1932 global CO2 emissions fell by 35 per cent. In my view, it is possible that global CO2 emissions could fall by 40 or 50 per cent if the policies are going to be followed by world governments as we have been seeing. In other words, we might achieve the target much more quickly than we expect but in a most unfortunate and damaging way to the world's economy.

Q169 Joan Walley: This particular inquiry is about shipping and so in the context of what you have just referred to could I just move on to shipping because we were very much aware that previously you had criticised the Climate Change Bill for not including international aviation and shipping. This Committee is very interested in your views on the very welcome announcement that the Government is going to take these emissions into account when setting UK carbon budgets. We would be very interested in your response to that.

Dr Bows: Personally I would like to know what "taking them into account" means and how they are actually going to be considered. We often club aviation and shipping together as though they are one very similar entity and my view is that they are quite different. We have a lot better understanding of the emissions from the aviation sector and how perhaps to apportion them to a nation whereas international shipping is more problematic due to the kind of routing that you get so there is often not just a start and a destination, there might be many points in between which, makes it much more problematic. Personally I would welcome the idea that we are going to be considering international aviation and shipping emissions when budgeting and it is therefore important to make as best an approximation as possible as to the emissions in order that we can tell how well the other sectors are doing in relation to our overall climate change goal. That does not necessarily mean that you would have to have a sophisticated method of emissions apportionment for aviation and shipping but just to have an idea of the quantity so that you can also look at the quantities from the other sectors and see how they are reducing over time. In my view, I think that we could actually put international aviation into the Climate Change Bill sooner than international shipping simply because we have a better understanding of the overall emissions from aviation.

Q170 Joan Walley: In terms of understanding all of that in relation to shipping, whose role would you see that as being?

Dr Bows: To improve the data?

Q171 Joan Walley: Yes.

Dr Bows: My understanding ‑ and Gillian Reynolds will be able to give more information on this ‑ is that there is a lot of information and data that is collated or gathered from different shipping organisations perhaps the International Chamber of Shipping or some intermediary would have a role in gathering this data for the purposes of something such as this. They could take the data from the shipping organisations and gather it in such a way that it is useful.

Dr Barker: There are differences between aviation and shipping but I think it is probably wise to treat them together for various reasons. The first one is that they are both outside the Kyoto Protocol and are not covered in the negotiations so they needed to be treated together. They both concern international waters and airspace and of course they both have activities in remote areas of the globe and pollute the environment in remote areas which are not covered by the usual national protocols and treaties. The most important reason is that there is actual substitution between them, particularly on freight. If you look at the relationship between the carriage of freight you will find that the huge increase in freight by aviation is partly because of a substitution away from shipping. There is a possibility of substitution between them and so from an economic point of view it makes it quite important to treat them together, particularly if we are decarbonising. I do have various other reasons for arguing that they should be treated together. I suspect if there is a scheme to decarbonise international transport it will be much more efficient and the effect of having lower costs if shipping is treated with aviation. I have various arguments about that which are in this paper.

Q172 Joan Walley: Assuming that all of this could be done, and that the UK's share of international shipping emissions could be assessed and audited in that way, how do you think that would affect the size and the urgency of the carbon cuts that our country should be making in any case?

Dr Bows: If you have a set budget then obviously if you start from a higher value because you have included international aviation and shipping then you will be using up your budget more rapidly. I would imagine that you would be looking at an increase in the percentage reductions per year depending on the period over which you look at your carbon budget. I do not know the actual detail on that but I think the idea is that you will be using up your budget more rapidly so you would need to account for that and make sure that you consider that when looking at your interim targets.

Q173 Mark Lazarowicz: Dr Barker, you proposed earlier this year a Global Emissions Trading Scheme in international shipping and aviation (GETS). What has been the reaction to your proposal since you put it forward?

Dr Barker: There has been considerable interest in developing countries basically because of the potential for large flows of incomes to fund Clean Development Mechanism projects or adaptation projects in developing countries. I do not know exactly what was put on the table at the G-20 but I would not be surprised if there was some mention of our scheme. The G-20 meeting is in progress or has just taken place. There are various developing countries that have shown great interest. We have had a lot of interest also of course from the IMO and the aviation bodies, IATA, which is a private body and then the UNFCCC body which ICAO are on.

Q174 Mark Lazarowicz: How would that differ from the strategy of moving forward by linking to regional schemes?

Dr Barker: The linking to regional schemes is complementary to the international schemes. The scheme is for international transport, ie it is outside national boundaries. I include in national boundaries the fictional boundary there is above us in the air. Your Committee might have come across these rather odd definitions of what is an emission and whether it comes to a country or whether it suddenly goes into the world atmosphere. The scheme as here is about international emissions and that is outside national boundaries. That would be complemented, for level playing field arguments, by national schemes which would cover aviation and shipping within national jurisdictions. Obviously you would not want any difference between the two and the great advantage of complementing it is that the large continental economies such as China, the United States, Russia, which have got huge aviation fleets with very substantial emissions, which until the Greater Depression, as I am calling it, would appear to be growing out of control (there is a 20 per cent per annum growth rates in Latin American countries) could be covered by such a scheme and yield very large amounts of revenues as the growth is curtailed by the Emissions Trading Scheme now.

Q175 Mark Lazarowicz: Have you had any sympathy to these proposals in precisely those countries?

Dr Barker: No, we have not. The countries which are most interested are countries which tend to be desperately in need of funds.

Q176 Mark Lazarowicz: Can you clarify under your proposal what size of cuts would need to be made from the shipping sector itself, ie rather than buying credits from other sectors?

Dr Barker: From shipping?

Q177 Mark Lazarowicz: Yes, I mean, is it an integrated shipping and aviation scheme?

Dr Barker: Yes it is and we have not done any in depth studies. My work has been dominated by the events of the credit crunch, but we have very great plans to work on looking at the effects of decarbonising transport. We intended to do some of it but events took hold.

Q178 Mark Lazarowicz: In which case you may not be able to answer this question fully at this stage but can you give us your assessment of how very ambitious cuts in shipping would require new technology rather than more incremental type of improvements?

Dr Barker: That is a very interesting question. Typically if there is no carbon price at all, there is no price signal, then industry sectors like shipping do not care about CO2 emissions, it is just not in their budget. As soon as there is a carbon price, even a tiny one, there will be remarkable changes because they will suddenly look at things that they had never thought of before and start doing them and old, very wasteful emitting ships will suddenly disappear from the fleets, especially at a time when the fleets are being reduced because of a global depression. I do not know if the Committee is aware that, for example, shipping rates have collapsed, things like this are happening on the most frightening scale at the moment. If there was a carbon price in there or a signal was put into the system, then you would find there would be enormous differences in how the system responded in the face of the cut down in the trade. In other words, they would focus much more on high CO2-emitting shipping. That would be what would go first because why would you keep that going and have to pay prices on it when the others would be much less?

Q179 Mark Lazarowicz: I am interested in what you say because we have had other evidence to us which has suggested that whether you use a levy system or a market‑based system, shipping companies would be able to pass the cost quite easily on to the end consumer precisely because it is fairly small part of the overall cost.

Dr Barker: Absolutely.

Q180 Mark Lazarowicz: Would that suggest it would not be such a strong incentive to reduce carbon?

Dr Barker: They may pass on the cost but it is not going to stop them responding to a price signal and cutting their costs. They can pass it on but they will still respond. This is what the Emission Trading Scheme is about. In the ETS the electricity companies pass on their prices but they still respond by shifting their inputs to lower carbon fuels. It is exactly the same with shipping and aviation. Less so in aviation because aviation tends to be more sensitive to fuel prices than shipping for obvious reasons.

Q181 Mr Chaytor: Do we know within a "reasonable" margin of error what the total global emissions from shipping are?

Dr Barker: It depends what you mean by reasonable margin of error. I think my colleague is more expert on this. We are working closely with our Atmospheric Chemistry Group who have access to data which is quite different from ours, a different data source. We came up with estimates of emissions, we were comparing our data sources for the year 2000, and they were remarkably similar, but then similarity is a 20 per cent difference and you might not consider that reasonable, I am not sure.

Dr Bows: My understanding is that there has been great uncertainty but because this issue has come to the fore somewhat there are more studies going on to try and look at the total CO2 emissions from bunker fuels. The IMO have recently released a figure which is somewhat higher than some of the other estimates. It appears to depend on whether you take a bottom‑up approach or a top down approach, so you either count the fuel that has actually been sold or you have a look at the actual activity that is going on, and it would appear that there has been a significant under‑reporting of the fuel being sold. My understanding is that the estimate base of the International Energy Agency is too low and the actual figure for CO2 is considerably higher, but I think more studies probably need to be done just to narrow down the uncertainty.

Q182 Mr Chaytor: What is your best estimate?

Dr Bows: My understanding is that it is something around 800 to 900 million tonnes.

Q183 Mr Chaytor: Does that include all shipping? Does that include fisheries and domestic freight as well?

Dr Bows: It is challenging to separate international from domestic shipping because sometimes some of the domestic shipping may then go off into international waters or may have purchased their fuel from an international source, et cetera. The IMO estimate of around 800 for international and another 200 or so for domestic does not seem unreasonable, but I am not collating the actual data so I think more studies need to be done.

Q184 Mr Chaytor: In terms of the methodology, if you try and extrapolate from the sale of bunker fuels how does that deal with the fact that different ships will be working at different levels of efficiency? It not a simple, straightforward calculation from the volume of bunker fuels sold, surely?

Dr Bows: If you are just looking at the bunker fuels sold you can make some estimate for the emission factor that would have to be based on an average of the different types of fuel being sold and how that is used, whereas obviously if you do activity then you can make them more accurate calculations based on the type of fuel, the type of engine efficiency and the CO2.

Q185 Mr Chaytor: It is not a totally scientifically valid method, is it; it is like sticking your finger in the wind and hoping for the best?

Dr Bows: The thing with the emissions data is that they are always going to be estimates.

Q186 Mr Chaytor: Is there no other way? The IMO has a responsibility presumably to produce an annual report as to what fuel is sold but is anybody else trying to get a more accurate methodology? Is anybody working on this?

Dr Bows: I am not aware of that, I do not know.

Dr Barker: Yes, the atmospheric chemists can get a handle on it just from an observation of what is in the air. Quite accurately they can know where the smoke has come from, which fuels, and which countries are emitting them, so it is quite remarkable and of course there are great advances in satellite monitoring of the emissions and the air quality. I think that was one of the alternative data sources. I am not an atmospheric chemist so I cannot verify that but I could ask my colleagues to give some evidence to you if you are interested.

Q187 Mr Chaytor: That would be very useful to us to have a supplementary note about that aspect, thank you.

Dr Barker: I think the expert on this is somebody called Professor David Lee. Have you come across him? He is the expert on collecting this. He has had a large project on collecting data on emissions which is just about to report or has just reported earlier this year.

Joan Walley: We shall look forward to receiving that. Jo Swinson?

Q188 Jo Swinton: Assuming you can get an overall estimate for the international emissions, what is the best way of apportioning that between the different countries?

Dr Barker: Proportioning it in the sense of allocating what?

Jo Swinton: What the emissions would be.

Q189 Joan Walley: Apportioning a national share.

Dr Barker: A national share?

Q190 Jo Swinton: If you have got some confidence about the amount of international emissions, what do you think is the best way for estimating how much of that should go to the UK, how much of that should go to Spain, how much should go to Russia and America?

Dr Barker: You mean reductions?

Q191 Jo Swinton: Even just in terms of the emissions.

Dr Barker: I see, I think that is a hopeless issue, a hopeless question, partly because the emissions react in the atmosphere to sunlight and all the rest. The thing about emissions is that they are not just CO2. I think you are just talking about greenhouse gases. There is a very big scientific problem about answering that question and that is because we are talking about emissions, so here we have got a cocktail of some which are fairly toxic, some which are benevolent and some which is just dirt and dust that comes out of the tailpipes of planes and the ships, and this spreads and interacts with each other. Some of it causes damage to crops and human health, et cetera. This is in our ports and it is in the air above us and we have to breathe it in. When you say you are allocating, I am not quite sure what you are allocating in these emissions and of course there are different stories attached to each of them. If it is just CO2 that diffuses throughout the atmosphere, it gets washed out, so once you are outside the national boundaries and even within national boundaries it is rather odd.

Q192 Jo Swinton: But if countries are going to take action to reduce emissions or indeed buy credits to reduce their share of emissions, there needs to be some way of allocation. I know, Dr Bows, you have outlined various different schemes in your memorandum. Which do you think would be the best of those ways? Obviously they all have their plus points and minus points.

Dr Bows: Just talking about carbon dioxide I think it is a lot clearer for aviation than it is for shipping. For aviation you can proximate 50 per cent on departure and 50 per cent on arrival. I think it is really problematic for shipping and I would not want to push any one method over another. It depends what you are going to do with the apportionment once you have done it, so if you are just literally trying to get a handle on roughly the amount of shipping CO2 emissions associated with the UK, that is one thing, but if you are going to then use it in any sort of trading scheme and if there are going to be any incentives associated with it, then you have to be more careful. It depends what it is going to be used for. In an ideal world perhaps what you could have is several tiers where you could suggest that a certain amount of the journey that you knew was associated with the UK, say out to a certain particular distance, and then you could allocate that portion, and then for the rest you could have some sort of apportionment based on the amount of activity loaded and unloaded at UK ports or something along those lines, but the important thing is to consider the distance as well. If you are just looking at freight tonnes then you are not necessarily accounting for the fact that it may also be going a very long distance.

Q193 Jo Swinton: One of the issues here is a lack of information. What can be done to encourage shipping companies and owners to make sure that they log their fuel use and their journeys made and that that information is not just kept within that company but passed up to the international organisations and the national countries?

Dr Barker: I think it is a great mistake to try and allocate these international emissions to countries, which you are suggesting. They actually should be allocated to the shipping companies and the airlines that are actually doing it with their ships and aeroplanes. This is international waters and international airspace and it is genuinely international, unless you are going to say there is a global authority, in which case you can allocate it to this global authority. Going down the route that the European Commission has done in proposing this 50 per cent start of the journey/50 per cent at the end of the journey, it is a terrible mistake and all it does is give rise to quarrels between countries. The European Union is quarrelling with the United States over this. It is really a waste of time and effort and it gives rise to disputes. This is an international problem and it needs to be addressed by international consensus.

Q194 Mark Lazarowicz: But it requires national governments ultimately to enforce any consensus on the ships or aeroplanes involved? Someone has got to take the action of enforcing it.

Dr Barker: Yes but someone does take action. There are a large number of international regulations which in fact are monitored and enforced by international bodies to do with safety and health at the moment.

Q195 Jo Swinton: The International Maritime Organization has not exactly been setting a pace on this issue.

Dr Barker: Surely it could be strengthened and its remit could be extended to cover pollution as well as health and safety? And surely it could be merged into a global authority to cover both shipping and aviation and to manage these industries much more effectively than they have been managed in the past? We see appalling degradation of the environment and these industries are even proposing, and have started building, deep water ports in the Arctic to take advantage of global warming and the opening up of new waterways. I think this has very serious potential for further environmental damage and acceleration of climate change by essentially putting a coating of soot on the pristine Arctic environment by shipping going up for example along the northern shores of Canada and Russia. We can already see in Russia examples of great problems, largely, I agree, due to the Soviet Union but some of them have been perpetuated. Imagine that going on along the northern shores, which could happen in the next 50 years if things go on as they have been going on.

Dr Bows: If you are apportioning or not, I think that we could improve the collation of data from the international shipping sector and have some sort of reporting standards and just make the distribution of the data more transparent and more open and free because I think at the moment, even if you allocated on the basis of charterers or whatever it may be, the UN standard or whatever it may be, you need to be able to say what is the data, how is it collected, what do you actually need to collect in order to understand the CO2 emissions associated with shipping, so whether we are apportioning or not we need to improve the transparency of the data that is available.

Q196 Jo Swinton: What are the barriers to doing that? Is there anyone standing in the way or is it inertia?

Dr Bows: My understanding is that one of the barriers is protection of competitiveness. At the moment that data is confidential and they would rather not release it just for competitiveness reasons, but I do not know what the legal barriers are to getting that data.

Q197 Jo Swinton: Just turning to those emissions other than carbon dioxide which we have already touched upon. We had some interesting evidence from the IMO Secretariat where they said the non‑CO2 contributions to global warming like nitrous oxide and black carbon would be being tackled through the measures they have already agreed to tackle air pollution. Do you share their confidence in this?

Dr Barker: International measures to tackle air pollution by the shipping industry? Are you serious?

Q198 Jo Swinton: That is what they told us.

Dr Barker: That is what they told you. I have seen no studies of this, I did not even know they were considering it. I do not want to be rude but it sounds a bit like a PR exercise. My colleagues are here and I hear some murmuring behind me. I must qualify this. I am talking about international shipping. I am not talking about Port of London which of course is in national waters. Clearly there are major regulations but I am not sure how effective they are. I was in Hong Kong and I have not seen such pollution in my life than in Hong Kong Harbour. "Hong Kong" stands for "fragrant harbour"!

Q199 Jo Swinton: I might guess your answer to my next question but, just for completeness, there are some who would say that as a result of some of the aerosol particles that shipping gives rise to that it actually has a cooling effect and therefore shipping should not be required to make as deep cuts as other sectors. What would your response be to that?

Dr Barker: It is true, absolutely, we can cool the planet by emitting a large amount of sulphur dioxide pollution. Do we really want that? Do we really want our health to be damaged in order to save future generations? It seems nonsense to me; the whole lot should be stopped.

Q200 Joan Walley: We are coming to the end to this part of our evidence session with yourselves but I just wonder in view of what you have said and some quite vigorous shaking of the head a little bit earlier on, if there is anything finally that you would like to say to the Committee particularly in respect of the role of the IMO in terms of its co‑ordinating effect internationally?

Dr Barker: I think the shipping industry and aviation would greatly benefit from a global scheme to decarbonise these sectors. They would benefit not only in PR terms; they would benefit in large flows of revenue to these industries to modernise them and to make them much cleaner and improve their safety record. In my view, some of the kinds of things that some of these trade bodies (not the IMO) have been undertaking are misplaced and they should be seeking ways of improving the social and corporate responsibility of these sectors.

Dr Bows: All I was going to say is given the urgency of the climate change challenge that we face, whatever mechanism is going to make emissions reduce more rapidly in the short term would be favourable. At the moment, my view is that ICAO and the IMO have not acted quickly enough in order to bring about schemes that actually start to reduce emissions, so if the scheme proposed by Dr Barker is going to reduce emissions more rapidly than the kind of actions that are currently going on, I think that has to be welcomed.

Joan Walley: On that call for action we would like to thank you very much indeed once again for coming before us this morning.

Memorandum submitted by Lloyd's Register

Examination of Witness

Witness: Ms Gillian Reynolds, Principal Environment and Sustainability Adviser, Lloyd's Register, and Member of the Institute of Marine Engineering, Science and Technology, gave evidence.

Q201 Joan Walley: Good morning. Thank you very much indeed for appearing before us this morning. I think you have sat in and heard some of the exchanges we have just had; and I think what we have just heard is really how current research is putting the focus on the need for more to be done more quickly, and for shipping emissions to be included in that. I just wonder how far apart you think what the last witnesses were calling for are from where the shipping industry is? What kind of cuts are you prepared to contemplate?

Ms Reynolds: Let us be clear, I am really not the shipping industry. Lloyd's Register is an independent certification body and works on behalf of governments worldwide to ensure standards, mandatory requirements and statutory requirements are being met. We inspect on behalf of ship owners but also on behalf of governments worldwide. What I would say in general to the last session is something that I found last year: with the Secretary General of the IMO I worked within his group of experts looking at cutting air pollution. I led the environmental group within that; and within that I contacted a lot of academics to try and get information from them; and there was a general unawareness and a lack of understanding of what was going on within the shipping industry, in the sense of the air pollution controls they already had in place, and the work that was going on to tighten that regulation.

Q202 Joan Walley: I am sorry, I am not quite clear. A lack of understanding amongst?

Ms Reynolds: A lack of understanding and knowledge of what the shipping industry had already done and was now trying to do. There was a lack of knowledge within academia of what is going on. That is where I would like to start from. It was quite widespread and it was a concern. I think it is something that is recognised within the industry itself - that they need to get out there and tell the world what they are doing. That is my first comment.

Q203 Joan Walley: Trying to be specific, Dr Barker has proposed a scheme in which emissions from international shipping and aviation are cut to net zero by 2050. Is that something, from where you sit at Lloyd's Register, you can see being a possibility? What distance is there between you? Would you say that was feasible; or would you say the shipping industry is already doing that?

Ms Reynolds: I am not aware of any details at all of the scheme. I was only made aware of its existence at the end of last week, and then I have had a paper given to me this morning, which I have not read, so I do not know any details. Until I know the proposals of how we would get there then I really cannot comment on it.

Q204 Joan Walley: Looking at it from a different angle then, what do you think the maximum size of cuts in absolute emissions from shipping could be by 2050?

Ms Reynolds: There are two questions: one is the maximum cuts from individual ships; and the other one is from shipping as a whole. We ourselves and DNV have recently done a paper looking at technical and operational measures. In that paper we judge that by 2050 for an individual ship we could look at about a 65 per cent reduction in emissions. The question is the growth of the world fleet. Is it going to grow as predicted to 2020 and then on to 2050? My own opinion is that those predictions are somewhat simplistic. I do not think the fleet is going to be growing to 2050 myself. I think there is a lot to take into consideration. One example, if you just look at the climate change predictions, the impact of global warming, the predictions for 2050 and what the world will look like then, I do not think we will see shipping in its current form carrying on. I do not think we will see the world carrying on as it is now. I think we may not see that predicted growth. From an individual ship 65 per cent, but that has to be set against how the fleet is going to grow or decline over those years and I cannot really comment.

Q205 Joan Walley: Just before I move on to my colleague Jo Swinson, can I just finally ask you: you mentioned just now not being aware of the academic research that there is -----

Ms Reynolds: No, I am sorry, I would not say I am not aware of the academic research - I am just not aware of this particular scheme. I have not heard of that.

Q206 Joan Walley: Given the spotlight certainly our Committee inquiry wishes to put on shipping emissions, do you feel there is a kind of mechanism which allows all the different specialists, all the different partners, to come together to really look to see how in an ideal world shipping could make its biggest maximum contribution to reducing emissions? Do you feel that there is that vehicle to actually do that?

Ms Reynolds: Currently and over the past few months a lot of academics have become involved in the debate about shipping.

Q207 Joan Walley: Does Lloyd's Register welcome that?

Ms Reynolds: Definitely, yes. Last year when I was leading the environmental group within the group of experts at IMO on air pollution I brought in the academics to come and talk to us, and it was a two-way flow of information because they did not know what was going on. It seemed that they were doing their research and we were progressing our own research. Yes, I certainly brought academics in then. With the IMO, the current research it has commissioned on the greenhouse gas emissions, there are a lot of academics involved in that. More and more academics are becoming involved. I thought I was reasonably familiar with what is going on: I just was not familiar with this particular piece of work from the Tyndall Centre.

Q208 Jo Swinson: It is ten years since the IMO was given the responsibility of tackling greenhouse gases from shipping and there has been hardly any progress since then. Why do you think that is?

Ms Reynolds: From the outset, when the IMO tried to discuss the issue of CO2 emissions, greenhouse gases, there were always the objections from the non-Annex 1 countries saying it was not going to apply to them; and there was a very sophisticated and orchestrated goings-on, for want of a better word, that really prevented any progress, and that went on for quite some time. When MARPOL Annex VI came into force it was then agreed, and it had been seen that this was absolutely necessary, that MARPOL Annex VI (which controls, for example SOx and NOx) needed to be tightened. In 2005 most of the activity on air pollution went to looking at tightening up MARPOL Annex VI, which the IMO did very successfully and adopted this year; but all the work on air pollution was almost exclusively directed to the SOx and NOx issue. Then there came along the realisation of the seriousness of the greenhouse gas emission issue. For the past year or so IMO have been trying exceptionally hard to get discussion and agreement on this matter; but there has been, as I referred to, this well orchestrated union of non-Annex 1 countries preventing any progress on the matter. There has been limited progress on the technical side really because, of instead of CO2 reductions, they were able to talk about energy efficiency indices and energy efficiency measures; and that has been more palatable than any talk of greenhouse gas emission reductions. IMO have tried extremely hard but have been prevented from really progressing this issue by Non-Annex 1 Member States.

Q209 Jo Swinson: That is obviously an impact that each of the Member States have had. I understand that members of the shipping industry are able to attend the IMO and although they cannot vote they can speak and can often be quite influential. To what extent has their voice been involved in either speeding up progress towards getting agreement, or slowing it down?

Ms Reynolds: Most of the shipping industry has seen the need to control greenhouse gases and have acted very positively to progress the debate at IMO: providing the information that they can; drafting documents to assist in improving energy efficiency; and in all the working groups, I would say, leading those rather than the Member States, because the progress that is being made is very technical; and most of the shipping industry has supported that.

Q210 Jo Swinson: How optimistic are you, given this sophisticated, well orchestrated campaign, as you call it, that the IMO can actually be the place where a solution will be found?

Ms Reynolds: The IMO will, I am sure, come up with the more technically based ship-by-ship measures: the energy efficiency design index; recommended measures to reduce greenhouse gas emissions onboard management plans. But as for agreement on an overarching plan to reduce emissions from the industry as a whole, I just do not think that is possible at the present time.

Q211 Jo Swinson: You think it might be better if that responsibility overall for tackling greenhouse emissions was taken away from the IMO and another group found?

Ms Reynolds: I really think the situation will change after Copenhagen in 2009. That is not my specialist area; but it is all linked to negotiating positions at the UNFCCC and non-Annex 1 countries not wanting to compromise their position there. Once their positions have been renegotiated then maybe we can do something on shipping.

Q212 Jo Swinson: You mentioned the role of Member States, and in your memo you have said that the UK has been fairly relatively passive. What behaviour have you observed from the UK that makes you say that? How does that compare with other Annex-1 countries, other EU Member States for example and the role they have been playing at the IMO?

Ms Reynolds: I can say that I feel the UK has been rather passive because I am a member of the UK delegation, so I sit with them. I have been at IMO attending meetings since 1990, so I know the usual progressive stance that the UK has. It has not on this particular issue, and there are a number of reasons for that. I would say most recently there are issues, such as the number of Government departments involved in greenhouse gas emissions - Defra, the MCA, DfT and the Treasury. For example, we wanted to put in through the UK a paper just recommending a scheme by which we could evaluate the different proposals for their merits, and it was very apolitical, and in the end it was the Treasury who said, "No, we won't allow it to be put in through the UK because we don't want to compromise our position. We don't know what our position necessarily is but we'll just keep it open for the future". I think that pervades - that we will keep things open. Also the man at the MCA who led on greenhouse gas emissions, at the IMO he was chairing a group on ballast water and control of organisms so, therefore, he was the main contact and he was not involved in those discussions at the IMO. He has now left so then there is a replacement. Again that is new people coming in to this very difficult environment.

Q213 Jo Swinson: Do you not think it strange the suggestion that the UK does not want to compromise its position, when we hear from top politicians and members of the Government about how vital it is that we tackle climate change, and yet we seem to be equivocating about that at the IMO?

Ms Reynolds: That was the reply I got when we sent our paper (because I am a member of the UK delegation, adviser, or whatever) to say "Could you put this in?" That was the response. Maybe it is a private response and I should not have said, but nobody indicated that. That was just the reason the Treasury would not agree to it, because they did not want to compromise their position.

Q214 Joan Walley: Just before we move on to the European action, I just wanted to pick you up, if I may, on what you said about the negotiating stance. I think it is a matter of concern if there does not appear to be a drive and a direction in terms of the outcomes that we want from what is going on inside the IMO. You mentioned a new person: was it Simon Coburn that you were referring to?

Ms Reynolds: No, the UK permanent representative has moved on, as has the person who was the focus for greenhouse gas emissions at MCA. Both of them have moved on.

Q215 Joan Walley: What you are really conveying is that there is not a sense of leadership, or someone really championing from the perspective of this agenda? Somehow or another what has been done has been submerged within cross-departmental fog, if you like?

Ms Reynolds: There have been so many factors that have meant there has not been a proactive stance at IMO, I feel, on this.

Q216 Mark Lazarowicz: The European Commission has indicated that if a global deal within IMO is not forthcoming in 2009 it will bring forward plans to include shipping unilaterally in the ETS. What is your reaction to that situation? Will that be achievable in your view, if the IMO does not come up with an agreement, which I must say looks quite possible?

Ms Reynolds: It unfortunately does look quite possible. My opinion is that it would be a great pity because it would undermine the IMO. I also think it may not be optimal - a scheme developed by the EC. I think it probably could be done, but I just am uncertain what the benefits are. There are, I think, some uncertainties as to what the disadvantages might be. For example, would it mean that ships would come to Morocco, offload their cargo onto lorries and truck them through Spain into Europe? Could the same be of ships going to Russia and then onward transfer of goods by road? I do not know. It depends on the level of the penalty for the CO2 emissions as to whether this would be a reality. I certainly know Malta is very concerned about it, because that is a big transhipment port, and our economy would be severely impacted if we lost that.

Q217 Mark Lazarowicz: Can you give any idea at all - and you may not be able to - how big a share of shipping emissions could be covered by an EU scheme?

Ms Reynolds: I do not want to guess, and so I will not answer.

Q218 Mark Lazarowicz: What is the EU's share of world shipping generally? Leaving aside the emissions, but as a share of world shipping, how much shipping would be potentially covered by such a scheme?

Ms Reynolds: It all depends; it is down to this allocation. What do you call "EU shipping"? Is it shipping that is flagged in the EU; or shipping that calls within the EU? It is so very difficult.

Q219 Mark Lazarowicz: Give us some options if you can?

Ms Reynolds: I honestly do not want to put numbers on things I do not know.

Q220 Mark Lazarowicz: If we cannot go to Lloyd's Register to ask what is the percentage of global shipping which can be regarded as EU shipping, who should we go to? You can provided that later, if that would be helpful.

Ms Reynolds: If you wanted to specify what you see as EU shipping, whether it is ships flagged in the EU or ships calling at the EU, then I can find out and come back to you.

Mark Lazarowicz: Give us both alternatives; I am sure that would be very helpful. I want is to get an idea of how effective it would be.

Q221 Mr Chaytor: Can I come to the question of allocating emissions between states. There does not seem to be any front-running solution to this. What is your observation on the different suggestions put forward? My recollection is that Lloyd's Register has pointed out allocation according to GDP would be the simplest. What is the downside of that, to start with? How much accuracy does it lose because it is the simplest method of doing it?

Ms Reynolds: I have no idea how accurate it would be. What I do know is that we did work for the UNFCCC on options for allocating emissions and looked at about six different options; whether it was flag; country of departure; country of arrival of the goods; splitting it between the two; where the registered owner was based et cetera. All of those were so widely out from what one instinctively knew to be a fair regime, and this issue comes up time and time again. I was talking about it to a colleague in the MCA about what were the UK thoughts on this, and he said there was quite a lot of discussion within the UK Government about allocating on the basis of GDP. Then I did the calculations and it seemed to me it was fairer and more equitable than any of the others and, of course, much simpler. What it does not have though is the link to the individual ship owners. I would agree with the previous speaker who said international is better if you can keep it as international shipping.

Q222 Mr Chaytor: In terms of individual ships and individual ship owners, fuel that is used on a journey has to be recorded as now. What is the problem of making that information publicly available, because would that not actually give the most accurate basis of calculating emissions, leaving aside the question of apportionment?

Ms Reynolds: If we look at annual emissions, that information is fairly readily available, or the fuel consumption is available to the owner. I do not know what the legalities are of making it publicly available. That information technically is not hard to get. The only problem we face is if you are going to be apportioning it, how are you going to apportion it? If you say, "What is the UK or the European", how do you apportion that; and then how are you going to calculate it? If you simply want to look at the total emissions from a ship technically that is easy - and the previous speakers were speaking about it - because the fuel taken on board is a very good measure. If we focus on the CO2 - the "C" in the CO2 comes from the carbon in the fuel and nowhere else; the same as sulphur, when we are looking at sulphur emissions.

Q223 Mr Chaytor: The fuel taken on board is recorded and could be made easily available. The ports at which the ship calls are recorded, and could that be made equally easily available?

Ms Reynolds: I do not know; it is completely outside my areas as to whether that sort of data could be made available.

Q224 Mr Chaytor: In terms of Lloyd's Register's role, your Fairplay division has the capacity to remotely monitor the movements of ships. Could you just say a little more about how that works, and how accurate and comprehensive that is?

Ms Reynolds: Lloyd's Register's Fairplay is a company that jointly Lloyd's Register owns with Fairplay. They are able, with transponders onboard ship, to track the movements of ships worldwide. The data is particularly good in Europe and other developed areas of the world, and so they can see the ships coming into Europe, say, passing through Europe, coming into port; and they can calculate from the basis of generic emission factors the ship's speed et cetera; and, with all the engine data and all the other data we have on ships, the approximate emissions. That can all be done in real time remotely. Again, we come back to the political question of setting the boundary. If you wanted a boundary to look at the ships to count whether they are in European waters, UK waters, or wherever - where is that boundary going to be? Technically it can be done and reported.

Q225 Mr Chaytor: The problem outside North America or the EU is the absence of transponders, or the fact the satellite system is not directed at that?

Ms Reynolds: I do not know the details of it, but I do know that in some less developed areas of the world the data is not so good; but it will not be because of the transponders on the ships, because all ships have to have them.

Q226 Mark Lazarowicz: In your paper you highlight two main ways in which you thought shipping emissions could be reduced: first of all, operational efficiencies; and secondly, various types of new technology. What do you consider the main drivers to actually bringing about the operational efficiencies which you discussed?

Ms Reynolds: In the current climate there are obviously fuel savings. A lot of the operational technical measures are being pursued in earnest now, with the high fuel price. That is a huge driver because the work that was going on, on propellers, on hull form et cetera, the last time there was a big driver to look at this was in the 1970s with the oil crisis; then fuel got cheaper and the urgency went away. Obviously things have moved on and are becoming more sophisticated, but now there is the focus again because of the fuel price. An overall cap on emissions from shipping would of course focus the mind if the industry wanted to continue to grow; or even if there was a need for an overall reduction in emissions; and this could be enforced. That would obviously be a huge driver for reducing emissions.

Q227 Mark Lazarowicz: I put it to Dr Barker that it was possible, and was suggested to us, that shipping companies would be able to quite easily pass on the effects of some form of carbon price ultimately to the consumer. He I think accepted that but also thought the industry would respond very quickly to the effects of a carbon price being introduced in some way. Do you agree with his assessment of how effective such a carbon price would be on driving efficiencies in the industry, or not?

Ms Reynolds: I am not entirely sure what I was meant to agree with. I think some of the costs could be passed on; but one thing I think no-one seems to mention, with the debate on shipping, is that shipping is a service and is transporting goods. Do you want to pay, as the consumer, the price for transporting those goods? Is it cost-effective if shipping costs more because of tax? I do not know. It does change the economics if there is going to be a tax on shipping, and it may not be as economic to get goods made elsewhere and brought to the UK.

Q228 Mark Lazarowicz: Obviously it would depend from item to item, of course. If the extra costs to the consumer at the end of the chain of the extra cost of carbon was relatively small, quite tiny, then they would simply pay that cost, and that would therefore not lead to real drivers on the industry to make efficiencies or to make improvements; all it would do presumably is give some people in the industry a windfall bonus as a result of being able to pass that cost on?

Ms Reynolds: I think what the driver will be is the overall cap if they want to continue to operate.

Q229 Mark Lazarowicz: You also refer to the opportunities for new technologies and fuels, and we have heard a lot about that. How much research has actually been done on the alternative fuels, and the alternative technologies? How much of that research has been done in such a way it has resulted in concrete outcomes?

Ms Reynolds: A lot of the work on the alternative fuels, like natural gas, is linked to general research; it is not specifically done for the shipping industry. For natural gas, as far as I understand, we are there and that research has been done. It is more a case of the distribution and the availability of the fuel. We have then got bio-fuels, and the shipping industry is in the same position as everybody else - that, at the moment, bio-fuels are not a sustainable option, and it is likely to be some way down the line, if ever. Apart from implications for use onboard ship, the development of bio-fuels, we are in the same position as everybody else.

Q230 Mark Lazarowicz: What about technologies like solar and wind, or sources of power like solar and wind which obviously have different effects on the way the ship would have to operate? How much research has been done there?

Ms Reynolds: That research is fairly limited. It is being done. The feeling is that it could only be a small contribution to the overall power required, but a small contribution is still welcome. There is not that much research going on as far as I know.

Q231 Mark Lazarowicz: We do not really get the impression, I suspect, as a committee that - when it comes to different types of fuel which can replace existing fuels or new technology - there is a great deal actually happening in terms of seeing things which will be used on ships. It does seem very slow in terms research and implementation. Would you dispute that?

Ms Reynolds: I think we have to look at shipping alongside everybody else. As I said with the LNG and the bio-fuels et cetera, there is not that much research specifically for shipping. We have looked at fuel cells and that work is ongoing, but it is only fairly small-scale.

Q232 Mark Lazarowicz: Finally on that theme, the IMO have also been working on the Operational Index and the Design Index. Do you think these will be effective, and how soon will we see such effects?

Ms Reynolds: The plans are that it is only the Design Index that would be a mandatory requirement. The Operational Index has been tried for the past three years or so, and that is seen as being too variable to be a mandatory requirement. That is going to be recommendatory in nature; and the suggestion is that that will apply just to individual ships so you can monitor their ongoing performance, whether they are improving or getting worse. Then we are left with the Design Index; and of course that would only apply to new ships. Allied to the Design Index is: is there going to be a certain performance threshold that the new ships have to meet? That as yet is undecided. If there is a threshold, where is that threshold going to be set? All these issues affect how effective the Design Index will be; but, of course, it will only apply to new ships, so one will have to wait for the fleet to be replaced.

Joan Walley: On that note, thank you very much indeed for contributing this morning. I hope that through our inquiry we will be putting more of the spotlight on shipping. Thank you very much indeed.

Witnesses: Mr Peter Barham, Sustainable Development Manager, Associated British Ports, Mr Alan Cartwright, Marine Engineer, Port of London Authority and advisor on shipping emissions and MARPOL to UK Major Ports Group, and Mr Howard Holt, Head of Corporate Affairs, Dover Harbour Board and representative of the British Ports Association, gave evidence.

Q233 Joan Walley: Can I welcome you all before our Committee, and I know we have had a fairly lengthy session already this morning and it is perhaps good that you have been able to at least listen to some of the discussions that we have had. Given that there are three of you from three very different organisations or companies, could you perhaps set out very briefly what each of you has responsibility for in the organisation that you represent?

Mr Holt: I am Head of Corporate Affairs for the Port of Dover, which means that I look after all the external stakeholder relations - anything that is outward-facing from the port, if you like. We are probably one of the larger members of the British Ports Association which represents 90 ports, and I am here on behalf of the British Ports Association today.

Mr Cartwright: I am the Marine Engineer for the Port of London Authority and, as such, I am responsible for designing, building, maintaining and eventually disposing of our fleet of vessels that we need, to keep the port open and working well; but, because of some background experience I have got from my Royal Naval jobs and the work I do for the PLA in a broader sense, I provide advice to the United Kingdom Major Ports Group on environmental matters relating to ships, and especially all aspects of MARPOL. I have a colleague who deals with the land issues and marine build issues and so on; but I deal with the interface between the ships and the ports for UK MPG.

Mr Barham: I work for Associated British Ports. We operate 21 ports throughout the company; and we are about 25 per cent of the port industry in the UK. My role is: I am the Sustainable Development Manager, which makes me responsible for environmental management across all aspects in all 21 ports, and also in terms of trying to promote new developments and achieve environmental acceptability for those, so it is quite a big role and I have a small team behind me. I guess I am also here representing UK MPG as well.

Q234 Joan Walley: So we have got fair degree of expertise before us this morning. Let me just start then with the issue of air quality, which we have not really touched on up until now to any great extent, and the issue of MARPOL Annex VI. Could you give us a sense of how big an impact shipping emissions altogether have on air quality in the UK?

Mr Cartwright: Shipping emissions do have an impact on the air quality. The exhaust plumes from merchant ships do travel a long way. There are three aspects to the emissions: if you look at the CO2 - we have heard before that the carbon dioxide emissions affect on a global, certainly large regional basis. The emissions of sulphur and nitrogen have a more local effect - regional; and those are certainly emissions that have an effect on the UK and Western Europe. On a very local basis you get the effect of particulates from what is a fairly heavy diesel fuel, or heavy fuel being burnt in a diesel engine. You get soot and particulates falling out which can have a very localised effect; which has been most widely emphasised on the western seaboard of the USA where a lot of action has been taken there. We do those effects, and from time to time we get people complaining about certain ships with very sooty exhausts and so on.

Q235 Joan Walley: Given the ports connection that you all have, how much do you feel, with extent of shipping activity in coastal regions all the way round the country, that tighter controls over ports could contribute towards reducing some of the more harmful effects of emissions?

Mr Barham: I think the simple fact is, as Alan has said, there is an understanding that ships' emissions do have an impact on local air quality. As I said, we operate 21 ports - in nine of those we are currently working with local authorities on air quality management area studies. There is quite a lot of work going on. One of the things that shows is that, of course, problems with air quality are not entirely the responsibility of shipping. I am not trying to let shipping off the hook. I am saying that there are other aspects of transport infrastructure that also need to be taken into account, in the sense of trying to be equitable; in that there are contributions from road, there are contributions from rail and there are contributions from shipping. It is trying to work across all three areas.

Q236 Joan Walley: We are just concerned with shipping here.

Mr Barham: Just concerned with shipping, yes, there is a contribution from shipping. In some cases it is probably greater than others. Work as I understand is being done in some of the air quality management areas to see what the contribution from shipping is.

Mr Holt: Your question referred to the UK but of course it varies a lot as you go around the UK. The English Channel is of course one of the busiest shipping lanes in the world. What we have effectively noticed is that there is a higher background from traffic that is actually nothing to do with our port. We then have our own traffic which is quite intense which, in effect, has been giving us some exceedences(?) over that fairly high background. Just to give you the really wide picture: we have a suspicion, for example, a steelworks in Dunkirk actually puts some sulphur dioxide in the air as well, because it does not respect national boundaries obviously. What we have had to do, with both nitrogen dioxide although that is largely a land-based problem for us, but on the shipping side it is a sulphur dioxide problem, we have actually had to declare an air quality management area in the area of the port. We have been working with all our stakeholders in terms of managing that area and coming forward with some actions.

Q237 Joan Walley: In terms of MARPOL Annex VI, how effective do you think that is going to be, for example, in respect of Dover and other ports around the country? Are you geared-up to really making sure that that gets implemented?

Mr Holt: Obviously that is largely something for the shipping operator in terms of MARPOL. We have our own port to look after and we are very concerned about the emissions from our own port. In terms of the ships, since 2006 when the sulphur content of the ferries was put down to 1.5 per cent, we have actually seen a reduction in the number of sulphur dioxide exceedences. Taking that experience and looking forward, undoubtedly as we go through the various tiers, that will bring an improvement in sulphur dioxide.

Q238 Joan Walley: You say what the MARPOL Annex agreed is largely for the shipping companies. Clearly you must have some indication of how what is happening there affects the operations of ports, and the ability of infrastructure that is needed in ports to link up to putting the new MARPOL agreements into practice?

Mr Holt: If you talk about some of the practical ways of implementing it then, yes, obviously ports have a part to play. We are very keen to work with our stakeholders in order to do that. There are various ways forward. For example, effectively ports like the shipping industry have been working through the NOx and SOx problem and we have perhaps taken a little longer to get to the carbon problem. That is really because the others manifested themselves quite obviously to us, if you like. We have actually got air quality management areas which are specific to the port. They are a local problem to us and, therefore, that has been our main concern. We are now looking ahead and saying, yes, in terms of bunker fuel and ways of solving problems, then ports have a particular part to play. Certainly if we begin to talk about things like cold ironing and shoreside supply of electricity then that is a huge issue for us in terms of the infrastructure.

Mr Cartwright: I was just going to remind the Committee that in the UK we have various models of ports within our organisations that are quite different from, let us say, the European model where, typically, ports are either centrally owned or municipally owned and, therefore, can be directed by either central or local government to do this or that. In the UK we have a variety of ports. We have the plc companies, such as ABP; we have privately owned ports, such as Bristol, and Bristol is a member of UK MPG; we have small trust ports such as Whitstable, which are fishing harbours and places like that but nevertheless are still a port; and then we have the larger trust ports, such as the Port of London, where the Port of London Authority is the trust port. We look after navigation, safety and all sorts of aspects. The actual operations that go on within the ports are owned by private companies, either privately owned, plc companies and so on. We have actually got quite a vast array of types of organisation that the lay person might just thing "Oh, it's a port", as in you might think "Oh, that's a shipping company". That introduces some of the complexities and the places whereupon various instructions, guidances, regulations, mandations and so on apply. We cannot just treat a port as an entity because some of them really are quite complex.

Q239 Joan Walley: I think you raise a very interesting question there. I remember the port privatisation legislation very well indeed. I am just wondering in terms of what you said - given the complexity of this issue in relation to the public health, emissions and now the global warming issues that we face - whether or not the regulatory measures that were put into place in respect of the port privatisation are actually consistent with the agenda that we now face, in looking at the way in which port operations which you have said yourself are different from other areas to meet the national objectives that we have. How would you feel about the overarching machinery that is in place to actually address that?

Mr Barham: Perhaps I will lead off because I represent the biggest area of commercially owned ports industry in the country. The simple fact is that alongside our commercial interests we have statutory authorities that we retained at privatisation in 1983, so we are the Harbour Authority in 21 port areas. On that basis we act as a public authority and, therefore, we have to take account of Acts like NERC and CROW. We are a public authority and publicly accountable for the Marine Authority. Where we are working on land as a commercial organisation, clearly we work closely with lots of environmental regulators, not least the MCA. When it comes to the enforcement of shipping issues, then we certainly do not see that as our responsibility; we see that as the responsibility of the MCA. There is quite a background there with things like some of the waste regulations, where we make facilities available for ships to use them, but it is not our job to police them. We would follow that parallel through in terms of some of the IMO stuff.

Mr Cartwright: I would like to support that, in that regulation of shipping should lie with the national authority, which is the MCA. We have a very close relationship with them obviously, both as individual ports and as organisations we have bilateral meetings and so on with the MCA on a whole variety of things. There are some of our activities that are regulated by the MCA; and some of our activities that are regulated by the EA because you pass over that line from the wet side to the land side. The EA take over environmental responsibility there. Clearly we work closely with them when we can to make sure that we are complying with all the requirements. To try and make a port a regulator on shipping in this regard is really quite difficult. We do in some instances, with vessel licensing; and in the PLA's case, river works licensing, yes, we have got certain powers within our Act: but to try and make us regulators of ships, we do not have the mechanism for doing that, whereas the MCA does. The mechanisms that they employ for other aspects of environmental compliance - be they international regulations or vested in UK law - those work quite well and we work with them on that.

Q240 Mr Chaytor: Is there a forum where the Environment Agency, the MCA and the Harbour Authorities come together to discuss the general issue of regulation, or do you operate entirely in three separate cells?

Mr Barham: I am not aware of any specific forum where they come together. There is quite a lot of linkage in maybe a more informal way. There has been a lot of discussion, for example, over the last two or three years about the Marine Bill. Obviously the Environment Agency will have their views, Natural England, the MCA and others; but I am not aware of any formal body. It is quite a good point actually.

Mr Cartwright: I would like to see a bit more joined-up work going there. It is not air emissions, but there has been a huge amount of trouble just recently which the ports have been having (and I will come back on to this because it impacts on emissions) about dredging. This is all linked into the Marine Bill and other aspects of environmental protection governance. The ports and the MCA have got a view, and the Environment Agency have taken a different view which has not been, shall we say, conducive to sensible port management as we would see it, and has actually got in the way of developing measures that would improve efficiency of the ports. A lead from government on drawing together those bodies - the Environment Agency, MCA and the ports - would certainly help.

Mr Barham: One of the things that we have been asking for with the Marine Bill of course is that the new Marine Management Organisation will actually be an opportunity to bring some of that together and reduce some of the overlap. That is an issue we have discussed with this Committee previously and elsewhere.

Q241 Mr Chaytor: Coming back specifically to the question of emissions, we have had some evidence to the inquiry that congestion in ports is a significant factor in excess emissions that could be avoided. Is that the case? If so, what is being done to reduce the volume of congestion in the ports for which you have responsibility?

Mr Cartwright: Congestion I think has been a particular problem that all of us have seen, particularly perhaps with the box trades, the container trades, and ro-ro. It has not been helped. It has been recognised by Government that there is this issue of lack of capacity in ports working, despite various measures to make the landside of the cargo handling as efficient as possible. The sheer bulk of the demand of the market for shipping of goods by container is recognised as leading to congestion. However, in a variety of areas represented here we have seen significant and unexplainable delays in the process of getting that increased capacity through to approval. In the Port of London Authority's case, of course the London Gateway approval process took nine years. It is shameful when the demand for reducing congestion, and building up the ability to get ships in and out and the cargo that the UK needs for its economic wellbeing, is held up in that way. To those involved: unexplainable ways.

Q242 Mr Chaytor: If we are about to enter the worst recession in 60 years then the rapid growth in shipping in the last 15 years is not going to continue, is it? Maybe congestion will be resolved by the slowing down in trade generally?

Mr Barham: In fairness, the trends (and obviously they are forecasts and we have no evidence until they happen) are that container growth particularly will continue once the recession is over. If it does that and comes down, it is going to go back up again. You may be aware that the Department for Transport are asking major ports industries to come up with master plans for the next 30 years; and it is intended that those master plans would include anticipated plans for growth. You are quite right in the short-term, but I think in the medium to longer term there is probably a very different climate.

Mr Holt: It was mentioned earlier, in terms of container ports it is really where it has manifested itself, and those have been peak demands with the early arrivals of goods for Christmas, and those sorts of things. It has not actually happened in quite the same way this year. In terms of ro-ro, congestion is not quite the same sort of problem manifesting itself today. Indeed, the delays when you talk about ro-ro are much smaller. You do not tend to keep a ship full of passengers and vehicles hanging around too long. Certainly looking ahead, and I would endorse entirely what my colleague said, the Department for Transport are still sticking with the work that they did in 2006-07 when they did some really good forecasting. Our own master plan for the next 30 years shows significant growth, really just driven by European trade. Yes, there has been a blip. This year we actually saw the downturn in our figures from spring this year because we are a bellwether for European trade - what passes through the port. We have had these blips before and there seems to be an underlying trend curve and one seems to get back onto that after a number of years. That has been what happened in the past. At the moment certainly I would endorse that we need to do an expansion of our port. We are concerned, and I believe I can say the Department of Transport is possibly a little bit concerned, the process for delivering that will be lengthy and may be overtaken by the demand in the meantime, thus causing congestion.

Q243 Joan Walley: You just mentioned growth projections. I am just curious to know whether or not they are taking into account either peak oil or future carbon price on shipping fuel?

Mr Holt: I doubt that the DfT figures took into account the carbon price, because that study was really based in 2006. I think at that time we all thought that the figures used then were about 2 per cent of carbon globally. The figure has of course gone up. We heard this morning five or six. It is more usually recognised I believe at 4.5 per cent. That has come on to the agenda in those two years. What has happened in the last year had not happened two years ago. Nevertheless, we are in discussions with Carbon for Transport now and we will revisit our forecasts and have done, but they are actually based on the growth of European trade. It may all cost more but if UK plc has effectively outsourced a lot of its manufacture into Europe and Eastern Europe, and if that is the way it is going to carry on being, then the trade will come.

Q244 Jo Swinson: Earlier the process of generating electricity shoreside not from the ships was mentioned - cold ironing. How much of an impact could that have on improving air quality within ports?

Mr Holt: That again depends - and I think we will have the same view but we can put it in slightly different contexts. Certainly in terms of my own port, if you look at it superficially then ferries are probably an ideal vehicle to try this out on straight away because the same vessel will be coming in and out for ten years; and it is going to the same ports all the time; and it looks like a good idea, The problem - apart from the infrastructure side, which is expensive to put in - is the sheer power demand of these ships. These are ships with restaurants, cafes, bars and whatever on board - shopping centres in effect - the power demand is huge. The other problem is that they are in port for a very short time. Our minimum turn-round time in the Port of Dover is half an hour for one of these ferries. Ten minutes to unload; five minutes to re-store; a quarter of an hour to put 120 lorries back on and it is gone. You can imagine in that time that someone coming off the ship with a large plug, putting it in a large socket and then reversing the process before it sails adds to the length of time. It is also, as I say, a very large power demand, and do you really want the possibility of a blackout or brownout while you are changing over? There are a lot of practical problems for that. In terms of at the port - potentially cold ironing will obviously reduce the emissions in the port. In the UK, where we generate a lot of our power by coal, are we not just transferring that from the port to Stoke-on-Trent, or somewhere else?

Mr Cartwright: If I can come in on that point. I gave a presentation to a conference on this very subject just recently and I did some research, and I am very happy to offer the Committee the slides of that presentation which shows some pictures. Cold ironing is not a new phenomenon. I was in the Royal Navy; whenever we came into port we would go on to shore supply. We had standards; we had standard cables; we had connectors; and if we could get on to shore supply then I could shut down and get on with my maintenance, or perhaps go on leave - but never before the cooks and stewards, but never mind! That made it a lot easier because we had a standard. At the moment there is a lot of work going on headed up by the IMO with IAX and the classification societies trying to find standards that will apply to ships. I would agree with Howard that ferries, short sea shipping and frequent runners are the ideal ships. Some shipping companies, Maersk for example, really like to have a dedicated berth at the ports that they go to, and they will run a line and they will have a ship coming in every two or three days and connecting up. Where you have got that situation that is an ideal opportunity because you can then provide a system that can be plugged in. Quite apart from the problem of where does the power come from, and is it environmentally beneficial - which remains a problem in the UK and a lot of Western European countries - there is then also the problem of getting the power to the terminal. In London many of our terminals are in remote locations. The nearest power of the capacity that you need for these sorts of ships might be three or four miles away. Any kind of mandation is going to then place an enormous cost, because it is the user who pays in this world, and the ships will just go elsewhere. It is as simple as that: ships will go elsewhere. They will go to other ports; they will go to mainland Europe; and then we become dependent on a feeder service, which is just not beneficial. However, where significant port developments are going ahead, for example London Gateway, Bristol, other areas where they are doing that, then it is sensible for them to put that infrastructure in, trusting that there is a power supply that can be provided with some kind of environmental benefit. Certainly on the Thames, electricity is lazy and it will come from the nearest power source and that will be Tilbury coal-fired power station or the Isle of Grain coal-fired power station.

Q245 Jo Swinson: On this issue of the environmental friendliness of the power generation, some UK ports have already got on-site renewable generation. How feasible is it to encourage that? What could the Government do to incentivise more ports to take that into account, which would get over some of the problems you have been describing?

Mr Barham: My company is currently looking a lot at shoreside power through wind generation and things like that. We modelled that if we worked hard at it we could be carbon neutral by about 2015, and that would seriously reduce electricity bills. There are real benefits to doing it. The simple fact, of course, is that you have to transmit that electricity produced into the national grid and there are various licensing issues. Clearly you could not guarantee on that supply alone, as a free-standing supply, to supply ships, because if the wind does not blow you have got no electricity. You are still into the technical issues that Alan talked about with regard to making the electricity available for ships. For example, we looked at it in Southampton and you are talking about many, many millions on the infrastructure problem to resolve this; and there simply is not the power generation locally to supply electricity to the ships. Sure, there are more and more companies looking to reduce our electricity bills.

Mr Cartwright: Yes, where it can be done. For example, Port of Bristol Company and Liverpool have got quite large generators in. There are some mechanisms that Government could help with in this regard: one is the Capital Allowances Environmentally Beneficial Plants and Machinery Order 2003, which gives a list of systems of plant and so on, on which a company can gain capital allowance benefits which helps everyone; but for some reason this Order seems almost specifically to exclude anything that is helpful to ports - our new boats that we are bringing in and so on. The other thing is with planning - these need planning assistance.

Q246 Mark Lazarowicz: The European Commission has indicated that it would consider varying port dues or giving unloading priority to ships with higher environmental standards. Would such a system work in UK ports?

Mr Cartwright: In the European model then, yes, it can. Ports at Helsinki have been very proactive with this, but they are municipally controlled ports. They not a plc; they are not required to make a profit; they simply can act as the servant of their national or indeed European government.

Q247 Joan Walley: It is actually not privatised?

Mr Cartwright: Yes.

Q248 Mark Lazarowicz: Is it quite an effective way of achieving a result?

Mr Cartwright: It would be. I think that would work very closely with the Design Index that we heard about earlier, and you have heard about from the Chamber of Shipping. That would be a level playing field, but of course only on new ships. The difficulty comes, of course, in the UK model where we have got the different models of ports. Sure, we could offer an incentive in terms of the conservancy charges on either the ships or the cargoes for ships that have got a low index number and they are environmentally beneficial. We are not subsidised so we have got to make a profit. We would therefore have to charge other ships more. That is a model that needs a lot of research to see if it could be worked. It would be difficult to mandate it because we do not have that state control of our ports.

Mr Holt: I think you asked two questions there: one was about priority treatment of a ship that was greener. Everything that has been said about dues I support; but in terms of giving priority to a certain ship that turns up because it is a bit greener, I think that begins to give real problems to ports in terms of the relationships they have with their shipping operations and so on. That one is a little bit more problematic. I would question whether speeding the green ship to the berth and putting the dirtier ones to circle longer is actually a good solution.

Q249 Mark Lazarowicz: My last question is of a technical nature and it may be better to give you time to respond in writing. Can you give us information on what data on fuel consumption is already collected by ports; and whether that data could be used to calculate and record emissions? In addition, it has also been suggested that emissions could be apportioned based on a country's imports. Do you collect enough data to make that possible?

Mr Holt: I think it is a fairly qualified no in both cases. In the case of most of the ferries, although some bunkering takes place in Dover, the majority of the bunkering takes places on the other side of the water, as it were. We would not have those figures. We probably do not have the bunkering figures particularly for Dover, although those might be more obtainable but it would only give a very small part of the picture.

Mr Barham: I think it is important to emphasise that, by and large, the UK ports industry is about operating berths, operating quaysides et cetera. The arrangement between ships, their owners, their fuel providers, their waste removers, is a relationship between the shipper, his agent and whichever company he is dealing with, either to provide fuel or else to take away his waste. We are simply there to provide a landlord for tenant's operations, or to provide safe navigation in harbours. So it is not information that we would routinely measure.

Q250 Mark Lazarowicz: We either go to the shipping companies, the fuel suppliers or the agents?

Mr Cartwright: The bunker companies would be the best place. They are required for weights and measures reasons to keep a very accurate record of what is transferred to which ship and what flag it has. I remember from my days at sea the forms that you have to fill in get signed and so on and they go off to the bunkering companies and so on. The Treasury takes an interest through the VAT and duty. If it is a small ship there might be some duty or VAT impact so that is measured very carefully; but, as my colleagues have said, it does not come through the port authorities. On the grounds that the user pays, the user being the UK Government, you would have to pay us for gathering this data because I can see it being a really complex bureaucratic exercise. The best place to go is to the bunker companies.

Joan Walley: On that note, I would like to thank all three of you very much for coming along. I think we have covered a lot of ground and probably opened up some other aspects. I could see when you were sat there in the public gallery there was some headshaking going on. Genuinely, if there are issues you think have been raised during the course of this morning then please feel free to submit further supplementary evidence. Mr Cartwright, the paper you have produced, we would very much welcome a copy of that. Thank you very much indeed.