The
amendments to the International Convention for the Prevention of Pollution from
Ships (MARPOL) were adopted in July 2011.They add a new chapter 4 Regulations
on energy efficiency for ships to MARPOL Annex VI, to make mandatory the Energy
Efficiency Design Index (EEDI), for new ships, and the Ship Energy Efficiency
Management Plan (SEEMP) for all ships. Other amendments to Annex VI add new
definitions and the requirements for survey and certification, including the
format for the International Energy Efficiency Certificate.
The
regulations apply to all ships of 400 gross tonnage and above. However, under
regulation 19, the Administration may waive the requirements for new ships up
to a maximum of 4 years.
The
EEDI is a non-prescriptive, performance-based mechanism that leaves the choice
of technologies to use in a specific ship design to the industry. As long as
the required energy-efficiency level is attained (regulations 20 and 21), ship
designers and builders would be free to use the most cost-efficient solutions
for the ship to comply with the regulations.
The
SEEMP establishes a mechanism for operators to improve the energy efficiency of
ships. Regulation 22 requires ships to keep on board a ship specific Ship
Energy Efficiency Management Plan (SEEMP).
Enhancing
energy efficiency
Shipping
is permanently engaged in efforts to optimize fuel consumption. And, while
ships are universally recognized as the most fuel-efficient mode of bulk cargo
transportation, the Second IMO GHG Study, published in 2009, identified a
significant potential for further improvements in energy efficiency, mainly
through the use of already existing technologies such as more efficient engines
and propulsion systems, improved hull designs and larger ships: or, in other
words, through technical- and design-based measures that can achieve noteworthy
reductions in fuel consumption and resulting CO2 emissions on a capacity basis
(tonne-mile). The study also concluded that additional reductions could be
obtained through operational measures such as lower speed, voyage optimization,
etc.
The
EEDI addresses the former type of measure by requiring a minimum energy
efficiency level for new ships; by stimulating continued technical development
of all the components influencing the fuel efficiency of a ship; and by
separating the technical and design-based measures from the operational and
commercial ones.
The
SEEMP provides a management framework, that may form part of the ship’s safety
management system, for improving the energy efficiency of a ship whilst
operating at sea and in port,.
Applicability
The
EEDI formula – as presently drafted – is not supposed to be applicable to all
new ships of 400 gross tonnes and above engaged in international trade. Indeed,
it is explicitly recognized that it is not suitable for all ship types
(particularly those not designed to transport cargo) or for all types of
propulsion systems (e.g., ships with diesel-electric, turbine or hybrid
propulsion systems will need additional correction factors).
Indeed,
the first iteration of the EEDI has been purposefully developed for the largest
and most energy-intensive segments of the world merchant fleet, thus embracing
approximately 70 per cent of emissions from new ships and covering the following
ship types: tankers, gas carriers, bulk carriers, general cargo ships,
refrigerated cargo carriers and container ships.
For
ship types not covered by the current formula, suitable formulae will be
developed in due course to address the largest emitters first. IMO’s Marine
Environment Protection Committee (MEPC) is poised to consider the matter in
detail at future sessions, with a view to adopting further iterations of the
EEDI.
All
existing ships of 400 gross tonnes and above engaged in international trade are
required to implement and maintain a SEEMP which establishes a mechanism for
operators to improve the energy efficiency of ships. This should be achieved by
monitoring the energy efficiency performance of a ship’s transportation work
and at regular intervals considering new technologies and practices to improve
energy efficiency.
The
SEEMP will offer operators of existing ships the chance to reduce costs
immediately by saving fuel. As the regulation does not set any energy
efficiency requirements it will be up to the industry to proactively utilize
SEEMP to ensure they optimize the fuel saving benefits. In the end it is in the
industry’s best interests to utilize the SEEMP as with fuel accounting for over
50% of operational costs, keeping fuel costs in check is a major factor in the
industry’s economic health. Such an approach will be important to achieving
both sustainable development and economic goals for the industry going forward.
A
set of such guidelines was adopted by MEPC 63 (March 2012) intended to assist
in the implementation of the mandatory regulations on Energy Efficiency for
Ships in MARPOL Annex VI:
- resolution MEPC.212(93) – 2012
Guidelines on the method of calculation of the attained Energy Efficiency
Design Index (EEDI) for new ships;
- resolution MEPC.213(93) – 2012
Guidelines for the development of a Ship Energy Efficiency Management Plan
(SEEMP);
- resolution MEPC.214(93) – 2012
Guidelines on survey and certification of the Energy Efficiency Design
Index (EEDI); and
- resolution MEPC.215(93) –
Guidelines for calculation of reference lines for use with the Energy
Efficiency Design Index (EEDI).
Minimum
propulsion power
The
need for a minimum propulsion power to be incorporated into the EEDI formula
has been duly acknowledged and, to that end, regulation 21.5 of MARPOL Annex VI
states that “For each ship to which this regulation applies, the installed
propulsion power shall not be less than the propulsion power needed to maintain
the manoeuvrability of the ship under adverse conditions as defined in the
guidelines to be developed by the Organization.”
It
should, therefore, be clear that IMO fully supports the view that a minimum
installed power to maintain safe navigation in adverse (weather) conditions is
of critical importance to ensure both the safety and efficiency of
international shipping. While the EEDI instrument therefore contains the
standard to be achieved on this matter, implementation of that standard will be
enabled through guidelines that are also to be adopted. IMO circular MSC-MEPC.2/Circ.11
provides “Interim Guidelines for determining minimum propulsion power to
maintain the manoeuvrability of ships in adverse conditions”.
Fuel
efficiency and engine power
Although
the easiest way to improve a vessel’s fuel efficiency is, indeed, to reduce
speed – hence the move to slow steaming by a significant number of ships –
there is a practical minimum at which fuel efficiency will decrease as a vessel
is slowed down further. There are other technical ways to improve fuel
efficiency, such as waste heat generators, which do not impact on speed (they
impact on auxiliary engines). Indeed, improvements in road transport efficiency
have been made through advances in technology that have, however, not led to a
sacrifice in speed; rather, quite the opposite.
It
has been (wrongly) argued that the EEDI limits installed power and so induces
owners to use small-bore high-rpm engines, thereby increasing fuel consumption.
However, a reduction of installed power does not require a reduction in engine
bore and increasing rpm. The easiest way to reduce power would be to “de-rate”
the exact same engine by limiting the “maximum” rpm (remember, horsepower =
torque multiplied by rpm). This would have the impact of increasing propeller
efficiency (if the exact same propeller is installed), as propeller efficiency
will generally improve as rpm decreases. Another practical way to reduce
installed horsepower is to install an engine with one cylinder fewer. This
would have no impact on specific fuel consumption or rpm. Such engines can be
identified by reference to the catalogues of major engine manufacturers.
Of
course, there are “economies of scale” in ships’ fuel efficiency. The larger
the ship (at a given speed), the lower the fuel consumption per unit of cargo.
However, such economies of scale are limited by trade considerations, physical
port limitations (generally, draft) or cargo logistics issues. Therefore, ships
tend to be designed to be as large as practical for a given trade.
Effectiveness
of EEDI and SEEMP in reducing emissions from ships
The
EEDI, in establishing a minimum energy efficiency requirement for new ships
depending on ship type and size, provides a robust mechanism that may be used
to increase the energy efficiency of ships, stepwise, to keep pace with
technical developments for many decades to come. It is a non-prescriptive
mechanism that leaves the choice of which technologies to use in a ship design
to the stakeholders, as long as the required energy-efficiency level is
attained, enabling the most cost-efficient solutions to be used. Such
technologies have been comprehensively considered in the 2009 IMO GHG Study and
are now frequently highlighted by the shipping media. A consequence of the new
regulations, and the growing interest and demand for innovative energy
efficiency improving technologies, is leading to significant investment in
research and development.
Fuel oil
consumption represents a significant element of the cost of operating a ship
today. The effective implementation of SEEMP onboard a ship could lead to a
reduction in fuel used, and so could be considered a commercial imperative, as
much as a regulatory one, for those seeking to manage a ship in today’s market.
To enable the ship’s energy efficiency performance is be optimised the
operational energy efficiency measures employed either at sea or in port need
to be robustly monitored and appropriate benchmarking tools used. Comparing the
energy efficiency performance of one ship with that of a similar ship on the
same trading route is also possible but this is more complicated as energy
efficiency of different ships can be affected by many variables, not least, the
weather and sea conditions they each experience. A proactive approach to energy
management of a ship should deliver cost improvements for the business and a
reduction of emissions from ships for wider society.
Carbon
emission regulations set to be adopted at the next meeting of the International
Maritime Organization’s Marine Environmental Protection Committee (MEPC) will
need to be addressed by shipowners’ legal teams as well as their technical
departments, according to a study by independent shipowners’ association BIMCO
and several other key stakeholders.
The impact
assessment identified a range of contractual challenges in the proposed carbon regulations.
BIMCO has
begun to prepare charter party clauses to help owners and charterers comply
with the new regime.
Since
charter parties that extend beyond 2023 were already being negotiated and
agreed, BIMCO had given this task top priority.
BIMCO said
that the main driver of its initiative was the amendments to chapter 4 of
MARPOL Annex VI, which are due to come into force in 2023. Those changes will
regulate more strictly the energy efficiency and carbon intensity of ships.
BIMCO said
that the future regulatory framework might require shipowners to reduce engine
power and speed to comply with the Energy Efficiency Existing Ship Index
(EEXI). Meanwhile, the carbon intensity index (CII) requirements might also see
shipowners having to reduce cargo intake, as well as taking measures that will
affect the routes chosen and the speed of the vessel during its journey.
BIMCO
warned that compliance with the new regime might mean that shipowners would be
at risk of being in breach of their obligations in performing the voyage under
standard charter party terms.
BIMCO said
that the impact study indicated that the commercial implications would be just
as challenging as the contractual issues.
It
observed that compliance would involve cost “This may take the form of capital
costs installing new equipment to make the ship more efficient; or it may be
costs related to cargo shutout and longer voyage durations. A fair allocation
of costs and responsibilities will be at the heart of the new BIMCO clauses to
ensure that neither party is unduly disadvantaged by the carbon regulations.”
BIMCO said
that it would also look closely at emission trading schemes currently under
discussion and how they would be dealt with in charter parties. The association
said that, although carbon levies could be considered a “tax” for the purposes
of charter parties, and therefore covered by existing clauses in standard
forms, it might be that a more prescriptive approach was called for.
BIMCO said
that it had been encouraged by the willingness of several dry cargo and wet
charterers to work together with shipowners and BIMCO to find contractual
solutions.
BIMCO’s
Documentary Committee will discuss the draft carbon clauses over the summer and
review then for possible adoption in September.
An essential part of this process is
bringing owners and charterers together to find practical and commercial
solutions to issues that are fair to both parties. BIMCO’s impact study has
indicated that the commercial implications of CII will be as equally challenging
as the contractual issues. Compliance will involve cost. This may take the form
of capital costs installing new equipment to make the ship more efficient; or
it may be costs related to cargo shutout and longer voyage durations. A fair
allocation of costs and responsibilities will be at the heart of the new BIMCO
clauses to ensure that neither party is unduly disadvantaged by the carbon
regulations.
Is it a tax?
BIMCO will also look closely at emission
trading schemes currently under discussion and how they be dealt with in
charter parties. Although carbon levies could be considered a “tax” for the
purposes of charter parties and therefore covered by existing clauses in
standard forms, it may be that a more prescriptive approach is called for.
As with the industry’s transition to low
sulphur fuels in 2020, the carbon clauses will require owners and charterers to
closely cooperate on technical and operational activities. On this aspect BIMCO
has been encouraged by the willingness of several dry cargo and wet charterers
to work together with shipowners and BIMCO to find contractual solutions.
BIMCO’s Documentary Committee will
discuss the draft carbon clauses over the summer and review then for possible
adoption in September.
https://www.bimco.org/news/priority-news/20210528-bimco-tackles-challenging-carbon-rules-with-new-charter-party-clauses
