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November 30, 2009

Mr. Byron Bunker

U.S. Environmental Protection Agency

National Vehicle and Fuel Emissions Laboratory 

2565 Plymouth Road 

Ann Arbor, MI 48105, U.S.A

bunker.byron@epa.gov 

SUBMITTED VIA EMAIL

RE: Addendum to Canadian Shipowners Association September 25, 2009 

submission on the proposed rulemaking “Control of Emissions from 

New Marine Compression-Ignition Engines at or above 30 Liters per 

Cylinder,” as requested.

Dear Mr. Bunker:

The Canadian Shipowners Association (CSA) respectfully submits this 

addendum to our September 25, 2009 submission on the U.S. Environmental 

Protection Agency’s (EPA) proposed rulemaking “Control of Emissions from New 

Marine Compression-Ignition Engines at or above 30 Liters per Cylinder” as 

requested.

About CSA

The CSA represents the owners of Canadian-flagged ships operating in the 

Great Lakes and St. Lawrence Seaway. Our members include seven companies 

operating a fleet of 68 vessels with an annual capacity of over 62 million metric 

tonnes in 2008 – over half of this capacity was carried between Canada and the 

United States.

The CSA is a founding member and active participant the Green Marine 

Program. The Green Marine Program is a voluntary environmental program to 

achieve continuous improvement in the environmental performance of the marine 

industry. 

The Canadian domestic marine industry supports the objective of addressing air 

emissions through a policy approach based on economically achievable and 

technically feasible performance objectives. 
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Background

The CSA is concerned that the proposed rulemaking to implement ECAequivalent fuel standards on vessels operating within the Great Lakes St. 

Lawrence Seaway will significantly impact the competitiveness of the marine 

mode. To recap, below is an overview of the concerns originally outlined in our 

September 25, 2009 submission document:

 The U.S. EPA is proposing to apply the International Maritime 

Organization (IMO) Emission Control Area (ECA) standards to vessels 

operating in the Great Lakes and St. Lawrence Seaway. In doing so, the 

proposed rulemaking inappropriately extends the cost-benefit analysis,

undertaken specifically for ocean-going vessels and the proposed North 

American ECA, to vessels operating in the Great Lakes and St. Lawrence 

Seaway. 

 Unfortunately, there are fundamental differences between ocean-going 

vessels and vessels operating within the Great Lakes and St. Lawrence 

Seaway that are not addressed in this analysis. The domestic marine 

shipping industry is a significant contributor to the competitiveness of 

North American industries operating within the Great Lakes and St. 

Lawrence Seaway area, providing an economic and an environmentally 

beneficial mode of transport. The potential economic and environmental 

impacts of a loss of marine capacity or a modal shift to other fully utilized 

transportation corridors have not been assessed. Further, the potential 

competitiveness impacts on other industrial sectors, which rely on the 

economic benefits of marine transportation in both Canada and the U.S., 

have not been assessed, including the potential for the leakage of 

production to offshore industrial facilities.

 The approach being proposed by the EPA does not promote sustainability 

and will create a negative environmental benefit by promoting a shift to 

other modes of transport with greater negative environmental impact per 

tonne-mile. The timelines being proposed will result in a reduction in the 

Canadian-flagged fleet and curtail investment in fleet renewal. Already, 

investment plans for significant fleet renewal have been put at risk as a 

result of this proposed rulemaking. 

 The proposed rulemaking does not provide the flexibility required by 

companies to achieve the proposed emissions reductions. Rather, a 

performance standard that provides the flexibility to achieve equivalent 

emissions levels through abatement technology, as included within the 

revised Annex VI to the MARPOL 73/78, is required. 

 The currently proposed timeline for the achievement of the proposed fuel 

standards must be revisited in order to provide incentive and the 
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necessary timeframe for new technology and fleet renewal and to ensure 

adequate fuel supply. In addition, the proposed rulemaking will impact 

current contracts with customers as the associated fuel cost increases will 

cause the fuel variable to be unsustainable within the short timeframe 

being proposed. Since our initial submission, the CSA has undertaken a 

preliminary survey regarding fuel supply. This survey indicates that

availability of a stable blended fuel at a reasonable cost in 2012 is a 

serious concern.

Further, recent studies by the Finish Ministry of Transport and Communications1

and the Swedish Maritime Administration regarding the impacts on fuel costs of 

ECA requirements support these initial findings. While the analysis supporting 

the proposed rulemaking estimates that the increased fuel costs will be 39%, the 

study by the Swedish Maritime Administration indicates that “For vessels that 

mostly transport cargoes between ports within a SECA, the increase in the fuel 

costs may, however, amount to around 70%.”2 This is inline with the CSA’s 

estimations as previously supplied. This finding highlights the need for a specific 

analysis of the costs and benefits of the proposed rulemaking for vessels 

operating within the Great Lakes and St. Lawrence Seaway.

Since the release of the proposed rulemaking, the U.S. Congress has directed

that the U.S. EPA undertake extensive review of both the costs and benefits of 

the proposed rulemaking with respect to the inclusion of the Great Lakes and St. 

Lawrence Seaway. In addition, in response to the concerns raised by the U.S.-

flagged vessels, the U.S. Congress has provided an exemption for steamships 

from the proposed rule as well as the addition of an economic hardship waiver 

provision. 

This latter development, however, does not address the concerns or realities of 

the Canadian-flagged fleet. Further, this exemption does not appropriately

address the realities of the bi-national waterway, nor does it provide the 

appropriate signals to encourage investments in new technologies and fleet 

renewal – required to improve environmental performance of the vessels 

operating on the Great Lakes and St. Lawrence Seaway. While these 

amendments have alleviated some of the adverse economic consequences of 

the proposed rulemaking in addressing some of the concerns of the US Great 

Lakes fleet, they will result in a negative impact on the Canadian fleet’s ability to

improve its environmental performance. Specifically, this change discourages 

investment in the Canadian fleet to retire and replace Canadian steamships as 

originally scheduled due to the competitiveness concerns introduced by the 

exemption. 

 

1

Finland. Ministry of Transport and Communications. “Sulphur content in ships bunker fuel in 2015: A 

study on the impacts of new IMO regulations on transportation costs.” Helsinki, 2009.

2

Sweden. Swedish Maritime Administration. “Consequences of the IMO’s New Marine Fuel Sulphur 

Regulations.” Norrköping, 2009.
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Finally, through this proposed rulemaking, the U.S. EPA is effectively 

establishing bi-national policy that does not account for the impacts on Canadianflagged vessels or the Canadian economy. Bi-national impacts should be 

recognized by both U.S. and Canadian regulators when developing policies that 

affect the Great Lakes St. Lawrence Seaway – a bi-national waterway. 

Within this context, the CSA strongly recommends that the U.S. EPA initiate a binational arrangement with Canada that will reduce air emissions but also 

preserve the benefits of marine transportation in this continental corridor. This 

can be accomplished by enabling emission reductions on a fleet average basis 

that promotes both fleet renewal and the adoption of environmental technology 

as it becomes commercially available.

Alternative Approach 

The alternative approach proposes a bi-national reciprocity arrangement 

between Canada and the United States. Within such an approach, Canadian 

flagged vessels within the Great Lakes and St. Lawrence Seaway would operate 

within the requirements of a Canadian air emissions regulatory regime that is 

responsive to the ECA-equivalent limits advanced by the U.S. EPA. 

If it is not feasible to incorporate a reciprocity arrangement into the U.S. EPA 

regulatory process, then the same result could be achieved by designing the 

waiver process to incorporate fleet averaging where it can be demonstrated that 

this will result in better environmental performance than a simple waiver or 

exemption.

Fleet Averaging Approach

The fleet averaging approach would be considered as an alternative approach for 

achieving a net improvement in the environmental performance in the Great 

Lakes and St. Lawrence. It would:

1. Result in significant reductions in air emissions from the Canadian fleet 

operating in the Great Lakes and St. Lawrence Seaway over current 

levels;

2. Set economically achievable environmental performance standards 

without significant disruption to maritime commerce or other economic 

impacts;

3. Maintain an investment climate that is conducive to fleet renewal and the 

adoption of new abatement technologies, and that encourages continued 

investment;

4. Achieve a significantly improved emission standard by 2020; and,

5. Mitigate many of the adverse environmental consequences not quantified 

in the EPA proposal (i.e., increased GHGs, air emissions, health and 
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environmental impacts resulting from modal shifts, production shifts and a 

disrupted fuel supply chain).

As part of the fleet averaging approach in U.S. waters, the U.S. EPA would 

accept a certificate issued by Transport Canada as recognition that this vessel is 

part of a fleet that complies with the emission standard. In Canadian waters, 

Transport Canada would accept U.S. flagged vessels certified to meet U.S. EPA 

standards.

The CSA strongly holds that a longer timeframe is required to develop the tools 

necessary to average the Canadian fleet sulphur emissions in a downward 

direction toward a 2020 target of 0.1% sulphur content. The graph below 

demonstrates the agreed position of the CSA member companies on how to 

accomplish the desired outcomes while addressing our primary concerns 

regarding the proposed rulemaking. This will allow the necessary timeframe to

investigate abatement technology and implement investment options. Technical 

expertise within the CSA membership indicates blending fuels to achieve low 

sulphur levels is not a reliable option. A blended fuel with a high percentage of 

MDO results in stability and compatibility issues making these low viscosity 

blends unsuitable for use. This may prompt a much earlier change over to MDO, 

which would be unsustainable from a commercial perspective.

Graph 1: Fleet Averaging Approach, 2011-2020

1.60

1.45

1.30

1.20

1.10

1.00

0.78

0.60

0.45

0.10

0.000

0.125

0.250

0.375

0.500

0.625

0.750

0.875

1.000

1.125

1.250

1.375

1.500

1.625

2011 2013 2015 2017 2019

Fleet Avg
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Within the fleet averaging approach, it is envisioned that a fleet owner will have 

the flexibility necessary to achieve an average fleet reduction through the ability 

to employ one or more of the following tools available to achieve the performance 

targets (this list is not exhaustive):

1. Retire older less fuel efficient vessels burning high sulphur content fuel 

such as Canadian-flagged steamships;

2. Invest in new, more fuel efficient vessels to reduce overall emissions;

3. Alternate abatement technology – New freshwater scrubber technology is 

being developed which would be installed in new builds and retrofitted to 

existing vessels where practical. Sufficient time is required to facilitate this 

development;

4. Change existing vessels over to MDO - Allow a more controlled and 

commercially acceptable change over to MDO if other abatement methods 

are not practical;

5. Retrofit marine engines to improve fuel efficiency and fleet average; and,

6. Consider alternative fuels such as biodiesel and natural gas.

The fleet averaging approach, together with the flexibility to employ numerous 

tools to achieve improvements, addresses many of CSA member companies’ 

concerns regarding the proposed rulemaking. This approach will provide the 

Canadian-flagged fleet with both the flexibility and the incentive to achieve the 

desired outcomes in a graduated approach. Rather than curtailing investment, 

this approach will provide the predictability needed to invest in fleet renewal.

It is important to note that, although preferable, implementation of this fleet 

averaging approach is not contingent upon the establishment of a reciprocity 

arrangement with the Government of Canada. This approach could be 

incorporated into the waiver process as a condition of approval as long as the 

waiver process is designed to accommodate it. In our view it is much better to 

provide a waiver that leads to fleet renewal and the adoption of new technology 

than one that simply exempts current operations. A waiver conditional on 

continuous improvement to environmental performance as outlined in the fleet 

averaging approach will result in cleaner air in the Great Lakes and St. Lawrence 

Seaway area in the long-run.
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Conclusion

The CSA strongly recommends that the U.S. EPA engage our industry and the 

Government of Canada as the development of the proposed rulemaking moves 

forward. I look forward to working with you on this initiative and addressing any 

concerns you may have regarding the alternative approach discussed herein.

Sincerely,

Original signed by

Bruce Bowie

President

Canadian Shipowners Association