Vince Connelly (Stirling, Liberal Party) Share this | Hansard source

This legislation seeks to amend the Protection of the Sea (Prevention of Pollution from Ships) Act 1983 to include further restrictions to enforce a global maximum sulphur cap of half a per cent by weight for ship fuel oil from 1 January 2020 and to ban the carriage of high-sulphur fuel without abatement technology from 1 March 2020. The industry further endorses the implementation of a 0.1 per cent sulphur emission control area for Australia, pursuant to similar moves by the International Maritime Organization. This represents an opportunity to lower our national emissions and support environmentally friendly policy.

To put the global issue into context, it is estimated that one ultra-large container ship emits the same amount of sulphur in one day of steaming as 50,000 cars emit in one year. In contributing to this debate, I'd like to inform the parliament of the role of the LNG Marine Fuel Institute in promoting the maritime industry's transition to the use of low-emissions liquefied natural gas, or LNG, as a marine and transport fuel, thereby reducing sulphur emissions, improving public health and creating jobs.

There is a growing global movement to replace the use of heavy fuel oil as the primary fuel for maritime shipping with the more environmentally friendly LNG, which is conveniently produced abundantly in Western Australia's north-west and in Queensland. Australian LNG has the potential to become the primary fuel for marine transportation. Currently, Australia is more than 90 per cent reliant on imported transport fuel oils, despite extensive domestic natural gas reserves in our nation. Australia is poised to lead the way, ahead of impending regulations, by establishing early adoption of LNG as a marine fuel and providing the Australasian maritime industry with an alternative, sustainable and cost-effective fuel source.

The use of LNG as a marine fuel is the first step towards helping Australia achieve energy independence. Our current reliance on imported fuels is a concerning and unsustainable model that undermines Australia's energy security. By promoting and facilitating the use of LNG as a marine transportation fuel, the federal government can partner with industry and help grow Australia's economy and create jobs while reducing pollution and emissions on a large scale.

By way of background, in 2016 the International Maritime Organization, or IMO, made a decision to enforce the global reduction of sulphur emissions to half a per cent by 1 January 2020. This deadline is fast approaching. The IMO mandated that the North Sea, Baltic and North American emission control areas have a stricter 0.1 per cent sulphur cap, and the Chinese domestic emission controls also mandated a 0.1 per cent sulphur cap from today.

This global emissions reduction regulation will work to reduce the impacts of sulphur, nitrogen oxides and carbon dioxide; reduce airborne particulates; and reduce acid rain and ground-level ozone smog, as well as reducing cancer rates and respiratory diseases in port areas due to ship emissions, which have recently been linked to neurological conditions such as dementia. These benefits will in turn have a positive climate change impact and improve public health and water quality as well as increase jobs.

The amendments contained in this legislation are necessary to meet Australia's international obligations. Further amendments to the Protection of the Sea (Prevention of Pollution from Ships) Act 1983 are required to permit ships with an exhaust gas cleaning system, called a scrubber, to continue using high-sulphur fuel from 1 January 2020.

The high-sulphur fuel carriage ban will be in place to discourage ships from burning high-sulphur fuel on the high seas, away from a country's jurisdictional waters, and to ensure a level playing field for international shipping. The carriage ban will not impose any additional costs on shipping companies or freight, as ships are already globally prohibited from burning noncompliant fuel from 1 January 2020. The majority of Australia's domestic fleet already use fuels that meet the 2020 sulphur standard and even the stricter, separate International Maritime Organization sanctioned 0.1 per cent in regional emission control areas. The industry is supportive of Australia legislating and consistently enforcing the sulphur cap to ensure a global level playing field.

IMO 2020 standards will come into effect on 1 January 2020, limiting fuel sulphur content to 0.5 per cent. This will force the shipping industry to change from heavy fuel oil, with typical sulphur oxide contents in the range of 2½ per cent, to other options.

The potential for using LNG as a marine fuel is huge. Ships visiting the major ports on the east coast of Australia are currently consuming in the order of 2.1 million tonnes of heavy fuel oil every year. LNG is safe to use, fully compliant with the IMO 2020 standards and readily available as a marine transport fuel. Australia needs to take advantage of its abundant natural resources and significant shipping market by building cost-competitive LNG fuel supply hubs to supply the LNG fuelled shipping market. Currently, countries such as Singapore, Malaysia and Japan have in the order of $10 billion invested and are forging ahead with the development of their LNG fuel supply hubs.

Reductions in air pollution from ships will help protect our natural and built world from the destructive effects of these emissions. Reducing sulphur, nitrogen and carbon dioxide, as well as particulate emissions from ships, ensures positive environmental outcomes now and into the future.

Promoting stricter IMO sanctioned emission control areas similar to those in the North Sea, the Baltic and North America will create a multibillion dollar domestic coastal shipping industry in the Southern Hemisphere, similar to that already established in the Northern Hemisphere, using Australian produced LNG as a marine fuel.

The main constituent of LNG is methane. It is lighter than air and boils at minus 161½ degrees Celsius. Since LNG evaporates, in case of collisions or grounding, the catastrophic effect of oil spills on Australia's pristine reefs and coastline will be eliminated. Australians, particularly those in coastal communities, will reap the tourism, health and environmental benefits of cleaner air through the restriction of sulphur emissions from ships in Australian waters.

Reducing emissions not only benefits the environment but also has an important, positive impact on public health, infrastructure development and jobs. According to studies in Europe, 50,000 premature deaths a year can be linked to air pollution from ships. To emphasise this further, a recent study in China found that at least 24,000 premature deaths per year in East Asia were related to air pollution from shipping. These diseases were most commonly in the form of cancers and heart and lung diseases. These preventable diseases not only impact health and social welfare but also limit resources in an already constrained public health system.

The LNG Marine Fuel Institute works with affiliated government and non-government bodies around the globe and regulatory bodies to advocate to government, to industry and to the public for the use of LNG as a marine fuel, ensuring stable and environmentally sustainable growth for the maritime sector. The institute brings together key agencies, federal, state and industry regulators, and businesses throughout Australasia. It has a partnership with the Society for Gas as a Marine Fuel in the Northern Hemisphere, working towards securing LNG as a marine fuel for the global maritime industry.

I acknowledge the exemplary work of the founding directors of the LNG Marine Fuels Institute, Captain Walter Purio, Richard Sandover, Tony Brooks—who is here with us today—Professor Stephen Smith, Rod Duke, Mary Hackett and Meg O'Neill, in raising public awareness of this issue and advocating for industry transformation. The national launch of the institute occurred on 21 June 2017 here in Parliament House, by the then environment minister, the member for Kooyong.

The institute is uniquely positioned as the only independent not-for-profit organisation in the Southern Hemisphere servicing the needs of the LNG marine fuel industry, working cooperatively to design best-practice use of, and creative solutions for, LNG as a marine fuel. This best practice will help position the use of Australian LNG as a marine fuel in a global context, ultimately benefiting all LNG stakeholders in the domestic and global LNG supply chains.

Renewable technologies are only part of the solution to power the nation in the medium term. The LNG fuels industry has the potential to power our nation's marine, road, rail and mining industries using our domestic gas reserves. The measurable benefits include energy independence and ensuring ongoing trade with countries with even more strict emission control areas and countries surrounding the North and Baltic seas, which will have a positive impact on Australia's exports, balance of payments and global reputation.

Reducing Australia's reliance on imported fuels is a strategic benefit, and LNG offers an economically viable solution through the development of new technologies to power industry. To achieve this, it is necessary to allocate adequate funding into research and development of future fuels technology. The barriers preventing the transition from heavy fuel oils to LNG include a lack of appropriate infrastructure, such as bunkering facilities and appropriate policy frameworks. We have the opportunity to encourage institutional investment in the necessary facilities and infrastructure to support this environmentally friendly industry. It should be a priority for the Commonwealth to implement an emissions control area covering Australian ports, as has already been done for ports in the USA, Canada, China and elsewhere.

The bill also proposes other minor administrative amendments to exempt naval and foreign government vessels from provisions of the Protection of the Sea (Prevention of Pollution from Ships) Act. These minor amendments do not impose any new regulatory burden on industry. Passage of this legislation through parliament is vital before 1 December 2019 to ensure Australia is ready to enforce the global sulphur cap from 1 January 2020.

It is exciting for Australia to be part of a growing global movement to replace the use of heavy fuel oil as the primary fuel for maritime shipping with a more environmentally friendly alternative in LNG, which is produced domestically. LNG is seen as a transition fuel to a low-carbon economy. It provides substantial environmental benefits over conventional fuels, in terms of improving air quality and for human health, which is particularly important in ports and coastal areas. LNG emits zero sulphur oxides, virtually zero particulate matter and significantly fewer nitrogen oxides. LNG is clean, posing no pollution risk to the environment in the ocean, and has no waste disposal or discharge issues. LNG as a marine fuel, in combination with efficiency measures developed for new ships, provides a way of meeting the IMO's decarbonisation target of a 40 per cent decrease by 2030 for international shipping. I commend this bill to the House.

See this speech in context