As expected, in the last MEPC no significant change was made to the regulations regarding the 2020 sulphur cap. What did make an impression was the approval of the proposed actions in case of scrubber failure. It was decided that scrubber failures ought to be reported to the authorities and that with their accent and acceptance the ship may then continue operating with non-compliant fuel. Even at port call, de-bunkering the high sulfur fuel and bunkering compliant fuel can be avoided, and with flag approval a vessel may continue burning high sulfur fuel with the scrubber out of operation. It seems, then, that there are now three options for compliance with the 2020 sulphur cap:
- 5% sulphur fuel;
- Non-working scrubber with flag dispensation.
In the years to come the main issue of the shipping industry will be the GHG reduction. The matter was discussed at the last MEPC but no decisions were taken. It is uncertain how the industry will move towards the GHG reduction targets. At the MEPC a list was prepared of all the proposals submitted by various bodies; the matter was postponed for future meetings. The proposed measures are divided in short-, medium- and long- term, and may be summarized as following:
- Mandate energy efficiency improvement for existing ships;
- Develop Indicators for existing ships EEDI;
- Make SEEMP part of the SMS;
- Evaluate and Develop Operational Efficiency Indicators;
- Speed optimization and Speed Reduction (maximum absolute and maximum average);
- Develop regulatory measures and develop technology to reduce methane slip and VOC;
- Encourage the development of National Action Plans (NAPs);
- Encourage port development to facilitate reduction of GHG emissions from shipping;
- Initiate and increase Research and Development (R&D) to identify best solutions;
- Incentives for LNG fueled ships;
- Develop lifecycle GHG/carbon intensity guidelines;
- Alternative fuels;
- Innovative reduction mechanisms;
- Fleet’s annual emission Cap.
The proposed measures are also categorized as goal-based measures that set emission targets allowing the selection of the method to achieve the target and prescriptive measures that describe specific procedures and actions.
The strengthening of SEEMP is one of the most popular proposals. It argues that the SEEMP should become part of the Safety Management System with a specific action plan and environmental targets. The environmental performance of a company will be subject to audits. However, the “Super SEEMP” is expected to have marginal environmental benefits.
Another proposal is the environmental indexing of the existing ships. With this measure they aim to identify ships and designs that pollute more than others and assign ships to environmental categories. It is expected that the ships targeted as pollutant, either will have to do a major modification or they will be forced out of the market by charterers and local regulations. Even today there are charterers and countries like Australia that do not accept ships that have low environmental rating in the Right Ship evaluation. It is questionable whether a regulatory intervention that penalizes some designs is fair. Further, it is debatable whether an environmental rating can really reflect the actual performance of a ship. In terms of environmental impact, the measure will take much time to yield some benefits and those it does will only be a small portion of the targets for 2030 and 2050.
It was also proposed that emissions can be reduced by limiting the maximum power of the ships. It is relatively easy to limit electronically the maximum power even of existing ships and make the full power available only in case of emergencies. A power reduction as a percentage applied on all ships seems fair but the ships with already reduced power from their initial design will suffer in rough weather. They might even face operational problems. If instead of a percentage the power limit is set to an absolute value for each type of ship, then the ships that are already below the set power limit will have no contribution to the emissions reduction and only some designs will take actions for the reduction of GHG.
Another proposal is to set emissions limits. There are many different opinions on how these limits could be set. Limit the CO2 emissions per ship as absolute number, or as total emissions per ship per year, or per fleet per year. There is also the proposal to set maximum emissions per ton miles for each ship type and cargo.
Setting a maximum CO2 emission limit requires extensive studies. The conditions in specific operating areas and whether or not the ships are fully or partially laden should be taken into consideration. The CO2 limits can be set as a percentage of the maximum emissions for each ship or as an absolute limit below the today’s average for a ship type. It will be very difficult to create specific CO2 emission limits for each single ship. An absolute limit, such as the emissions average for every ship type and size, also has serious disadvantages. The ships that are already operating below the today’s average will take no actions and will no contribute to the GHG reduction, while the ships with above-average emissions will take the whole burden of reduction set for the global fleet and this task will obviously be impossible.
Total CO2 limit per year is difficult to apply because the consumption in the period of a year is related to the operation and activity of the ships. Therefore, the commercially active ships will be penalized, including ones that are very efficient.
Limiting the CO2 emissions per fleet will create an emissions trading scheme. The ships that consume more than the average will form fleets with the ships that consume less. Actually some ships will buy CO2 emissions from those that save. How will the environment benefit by this emissions trading?
To define any kind of CO2 limits requires extensive studies which will take at least 3 years to complete.
The CO2 limits are expected to force the shipowners to improve ship performance by investing in new technologies, antifriction paints, retrofitting energy saving devices or replacing their ships and ordering new buildings. However, the environmental benefit from the investment to improve a ship with new technologies is not significant. It is still far from the IMO reduction targets of 30%, 50% and 70%. It should be considered that if we replace a ship built 20 years ago with a brand new design, the ship will have only about 14% reduced emissions.
One of the main factors in ship emissions is the speed. By reducing the speed of a bulker or a tanker just one knot, say from 15.5 to 14.5, the daily emissions are reduced by 27%! We realize that if we leave the speed unregulated, as it is today, a minor increase of speed will eliminate any environmental benefit that can be obtained by SEEMP and the investment in new designs and energy saving technologies.
The concept of speed limit is to ban the high speeds that produce excessive consumption and air pollution. The proposal is to set maximum speed limits according to ship type and operation. Limiting the average speed is seen as giving more operational flexibility to container ships, while the limit of the absolute speed is more appropriate for bulkers and tankers. The proposal of speed limit is applicable more to the charterers than to the owners because at least half of the period the ship belongs to the charterers.
Presently the speed of the ship is chosen as a function of the freight rate and fuel cost. When the fuel cost is more important than the value of time, we operate the ship at low steaming. Thus, the speed reduction is already implemented when the fuel cost is high.
Other advantages of the speed limit as measure are that it can be applied immediately, does not require any modification and investment, and it is very easy to monitor through the AIS. It is a fair measure because all ships will have equivalent contribution to the GHG reduction and no ships are penalized. The efficient ships are still more efficient and competitive and will always consume less than the others. According to studies, the financial impact on the states will be minimal.
The environmentalists are urging to implement speed limits because of the huge environmental impact of the speed, the immediate environmental benefit and also the easy implementation and monitoring. Just one week before the last MEPC meeting, there was an open letter initiative that in addition to the environmental organizations, the proposal for speed regulation was supported by many shipowners around the world. The initiative showed to the public that shipping cares about the environment and it received very positive comments from the media.
Some objections were expressed by those who worry that speed reduction will increase the freight cost. It is clear that other industries and financial institutions instead of speed reduction, would prefer to see older ships going for scrap, ordering new ships and creating the necessity for more investments. Regulating the speed is an excellent way to reduce emissions but it does not promote investments, and does not require loans from the banks. Finally we have to ask, are environmental regulations made only to promote investments?
In conclusion since there is no cheap and environmentally- friendly fuel available in the market to achieve the IMO targets of 2030 and 2050, the way forward is the implementation of a number of measures. We are expecting that in the near future many of the proposals submitted in the last MEPC will become regulations.
The above text is an edited version of Mr. Panos Kourkountis’s presentation during the 2019 Hellenic American Maritime Forum in Athens.
You may view his presentation herebelow.
The views presented hereabove are only those of the author and not necessarily those of SAFETY4SEA and are for information sharing and discussion purposes only.
About Panos Kourkountis
Mr Panos Kourkountis is an experienced Technical Director in the shipping industry, working under Sea Traders SA from 2018. He has been holding the position of the Technical Director at Andriaki Shipping Co. Ltd from 2004 to 2018. He studied Naval Architecture and Mechanical Engineer at the National Technical University of Athens.