# EUR-Lex - 52013PC0300 - EN

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# 52013PC0300

**Proposal for a COUNCIL DECISION establishing the position to be taken in HELCOM and IMO concerning the designation on the Baltic Sea as Nitrogen Oxyde Emissions Control Area (NECA) /* COM/2013/0300 final - 2013/0153 (NLE) */**

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EXPLANATORY MEMORANDUM

1.           CONTEXT OF THE PROPOSAL

The International Maritime Organisation
(IMO) and its International Convention for the Prevention of Pollution from
Ships (MARPOL, Annex VI) provide for the possibility to
designate emission control areas, in order to reduce
air pollution from shipping, at the request of the
riparian States of the area concerned.

A North American NECA has already been
agreed and in the EU, a Baltic Sea NECA application is ready for submission to
the IMO, while work on preparing the North Sea NECA is progressing. NECA
provisions will enter into force in 2016, and will apply only to ships built
after that date entering a NECA.

As part of the NECA submission preparation,
HELCOM performed a comprehensive analysis to estimate NOx emissions from ships
operating in the Baltic and their impact.

The designation of the Baltic Sea as a NECA
is expected to result in a reduction of 16% of NOx emissions from shipping in
2020 and 46% in 2030. It is expected that all ships will meet NECA requirements
in the Baltic only around 2040-50, with a third equipped by 2030. The costs and
benefits of the Baltic Sea NECA will therefore accrue gradually, due to the
relatively slow replacement rate of ships, which varies by vessel type.

The Baltic NECA will be an important
contribution to the reduction of air pollution, especially as several Member
States in the Baltic Sea region do not meet the emission standards set by the
Ambient Air Quality Directive. It will in addition result in health benefits and
reduced eutrophication, one of the major environmental challenges faced by the Baltic Sea, as well as a diminished acidification and ozone formation.

Investment costs are mitigated due to some ship-owners
having already opted to equip their new ships with NECA compliant engines to
enable their ships to enter the North American NECA. In these cases, only
additional operating costs arise, and will result a in a gradual increase, until
2040-50, of costs of maritime transport in the Baltic Sea.

Further information on the costs and
benefits of the Baltic Sea NECA for the EU stems from the Impact Assessment
accompanying the Commission's 2010 proposal for the revision of Directive
1999/32 as regards sulphur content in marine fuels[1].
According to this document, benefits associated with full IMO compliance are at
least between €3 and €13 for every €1 spent[2].
The benefit/cost ratio associated with the designation
of the Baltic Sea as Emission Control Area is considered highly favourable.

Available technologies to reduce NOx
emissions from shipping are exhaust gas recycling (EGR), LNG and specific
catalytic reduction (SCR).

2. Developments to Date

In 2010, the Ministerial meeting of the
Helsinki Convention on the Protection of the Marine Environment of the Baltic
Sea Area (HELCOM) decided to "work towards submitting, preferably by 2011,
a joint proposal by the Baltic Sea countries to the IMO applying for a NOx
Emission Control Area (NECA) for the Baltic Sea".

In its meeting of 9-10 March 2011, the
Baltic Marine Environment Protection Commission agreed that the Baltic Sea should be designated as a NECA. It noted however that some parties were not yet
ready to take an immediate decision.

In its meeting of 6-7 March 2012, the
Baltic Marine Environment Protection Commission agreed that the NECA
application prepared in HELCOM fulfilled the IMO criteria.

In their meeting of 14-15 June 2012 the
Heads of Delegation of HELCOM stressed that the only decision remaining was the
timing of the submission to IMO.

In their meeting on 3-4 December 2012, the
Heads of Delegation of HELCOM decided to organise a stakeholders meeting on the
Baltic NECA application on 4 March 2013. They agreed that the final date of
submission to IMO was to be taken prior to the October 2013 Ministerial
Meeting. They agreed to report to the Ministers accordingly. A stakeholder
meeting specifically targeted at the Baltic Sea shipping industry took place on
March 4, 2013.

Once the date of submission has been agreed
in HELCOM, the NECA submission will be transmitted for adoption to the IMO
Marine Environmental Protection Committee (MEPC) by Baltic riparian States. IMO
will then examine whether the requirements of a NOx Control Area under Annex VI
of MARPOL are fulfilled. If so, the Baltic NECA will be agreed. However, no
substantive discussion will take place at MEPC.

3. EU POSITION

The EU has supported in principle the
designation of the Baltic Sea as a NECA, as agreed in the Council Shipping
Working Party of 7 November 2011. The Working Party also considered that the
designation of the Baltic Sea as a NECA was the most cost efficient measure to
reduce NOx emissions, to meet ambient air quality standards and good
environmental status regarding eutrophication as required under the Marine
Strategy Framework Directive. It noted the request by the Shipping Working
Party of 8th November 2010 for a detailed impact assessment,
recognised that the further developed draft IMO submission for designing the
Baltic Sea as a NECA included some elements on the risk of modal backshift but that
in principle, a cost benefit analysis is not required by IMO when applying for
an emission Control Area and that the economic analysis made in the application
was sufficient to meet IMO requirements. On 17 October 2012, the shipping
Working Party also took note of the progress on the Baltic Sea NECA and further
noted that in case that IMO designates the Baltic Sea as a NECA, the Commission
will assess the need to transpose this provision into EU legislation, and that
this decision process might require further impact analysis.

It is now necessary for the Council to
adopt the position to be expressed by the EU on the date at which the Baltic
NECA submission will be transmitted to the MEPC, in line with article 218 (9)
TFEU, before the next meeting of the HELCOM Heads of Delegation on 17 June
2013.

The applicable IMO rules[3] foresee that NECA rules will
apply as of 2016, independent of the date of submission of a proposal to
designate an area as NECA. A rapid submission is therefore in the interest of the
shipping industry and engine manufacturers, which need sufficient lead time to
adapt and avoid possible higher retrofitting costs. .

In view of the above, the Union should
support the submission to IMO of the HELCOM proposal to designate the Baltic
Sea as an Emission Control Area for Nitrogen Oxide, by Baltic Sea riparian
states at the latest by the 66th meeting of the IMO Marine Environment
Protection Committee in March 2014. It is therefore necessary for the Council
to also adopt the Union's position to be expressed by the EU Member States in
IMO, in line with Article 218(9) TFEU.

2013/0153 (NLE)

Proposal for a

COUNCIL DECISION

establishing the position to be taken in
HELCOM and IMO concerning the designation on the Baltic Sea as Nitrogen Oxyde
Emissions Control Area (NECA)

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the
Treaty on the Functioning of the European Union, and in particular Article 191,
in conjunction with Article 218 (9), thereof,

Having regard to the
proposal from the European Commission,

Whereas:

(1)       The International Maritime
Organisation (IMO) and its International Convention for
the Prevention of Pollution from Ships (MARPOL, Annex VI) provide for the possibility
to designate, at the request of the riparian states concerned, emission control
areas (NECAs) in order to prevent, reduce and control emissions of Nitrogen
Oxide (NOx) from ships.

(2)       The European Union is a
party to the Convention on the Protection of the Marine Environment of the
Baltic Sea Area (HELCOM) which is the forum discussing the submission of a
proposal for the Baltic Sea as NOx Emissions Control Area to IMO.

(3)       Preparatory work has been
undertaken under the auspices of HELCOM with regard to a draft submission to
the IMO proposing the designation of a NECA in the Baltic Sea. Once the date of
a NECA submission has been agreed in HELCOM, it will be transmitted for
adoption to the IMO Marine Environmental Protection Committee (MEPC) by the Baltic
riparian states. IMO will then examine whether the requirements of a NOx
Control Area under Annex VI of MARPOL are fulfilled. If so, the Baltic NECA
will be agreed. However, no substantive discussion will take place at MEPC.

(4)       The EU ambient air quality
directive 2008/50/EC and the NEC directive (2001/81/EC) set emission standards
for air pollutants. In particular, directive 2001/81/EC provides that the
Commission and Member States, as appropriate, shall, without prejudice to
Article 218 of the TFEU, pursue bilateral and multilateral cooperation with
third countries and relevant international organisations such as the International
Maritime Organization (IMO) with the aim of improving the basis for the
facilitation of emission reductions.

(5)       The HELCOM Baltic Sea
Ministerial Declaration of 2010 agreed to designate the Baltic Sea NECA,
preferably by 2011.

(6)       The Shipping Working Party
of 8th November 2010 requested a detailed impact assessment as it recognised
that the draft IMO submission for designing the Baltic Sea as a NECA included
some elements on the risk of modal backshift. However, it acknowledged that a
cost benefit analysis similar to preparatory work for future EU legislation is
not required by IMO when applying for an Emission Control Area and that the
economic analysis made in the application was sufficient to meet IMO
requirements.In its meeting of 9-10 March 2011, the Baltic Marine Environment
Protection Commission agreed that the Baltic Sea should be designated as a
NECA. It noted however that some parties were not yet ready to take an
immediate decision.

(7)       In its meeting of 6-7
March 2012, the Baltic Marine Environment Protection Commission agreed that the
NECA application prepared in HELCOM fulfilled the IMO criteria.

(8)       In their meeting of 14-15
June 2012 the Heads of Delegation of HELCOM stressed that the only decision
remaining was the timing of the submission to IMO.

(9)       In their meeting of 3-4
December 2012, the Heads of Delegation of HELCOM agreed that the final date of
submission to IMO was to be taken prior to the October 2013 Ministerial
Meeting.

(10)     If the decision is taken in
HELCOM to submit a proposal to IMO to designate the Baltic Sea as an Emission
Control Area for Nitrogen Oxide, the EU Member States should support the
proposed designation of the Baltic Sea as an Emission control Area for Nitrogen
Oxide.

(11)     IMO Tier III obligations
for NECA will enter into force as of 2016, it is important to give economic
operators sufficient time to adapt.

HAS ADOPTED THIS DECISION:

Article 1

The position to be taken by the European
Union in HELCOM shall be to support the submission by the Baltic riparian
States to IMO of the HELCOM proposal to designate the Baltic Sea as an Emission
Control Area for Nitrogen Oxide, at the latest by the 66th meeting of the IMO
Marine Environment Protection Committee.

Article
2

Following adoption of
the decision in HELCOM referred to in Article 1, it shall be presented and
supported in the IMO by the Member States acting jointly in the interest of the
European Union

Done at Brussels,

For
the Council

The
President

[1]               SEC (2011) 919

[2]               An ongoing study by DG ENV currently estimates cost
benefit ratios for the Baltic NECA in a range of €2.3 to €8.6 for every €1
spent.

[3]               IMO Revised MARPOL Annex VI, regulation 13.