Climate change is a key concern for sustainable shipping, and using that as a base during session 4 of the 2022 GREEN4SEA Forum, experts shared their opinions on air emissions, as well as relevant regulations, such as the CII and the EEXI of the IMO, and recent regulations Fit For 55 and FuelEU, that the European Union launched.
IMO has set ambitious goals starting from 2023 with ships in need to calculate their EEXI and establish their annual operational CII ratings. In addition, operators should have in mind that important milestones for the EU MRV and IMO DCS are coming up in the first half of 2022.
Key concerns with regulatory compliance
However, are there any concerns regarding regulatory compliance with these regulations? According to Dr. John Kokarakis, Technical And Business Development Director, Southeast Europe, Black Sea & Adriatic Zone, Bureau Veritas:
There is a tsunami of regulations from many different sectors. Currently, we have regulations from the IMO, regional ones, and the EU Fit For 55. It is a challenge to avoid conflict among regulations
In the same framework, Miltos Messinezis, Sales Engineer, OCEANKING Technical & Trading S.A., added that the most important issue is that “there is not a common ground between the regulations, especially as there is not a solution that fits all.”
Agreeing with both Mr Messinezis and Dr. Kokarakis, Panos Kourkountis, Technical Director, Sea Traders SA, and Mark Smith, Loss Prevention Executive, North of England P&I Club, gave emphasis to the confusion that shipping is facing regulatory-wise.
Uncertainty is major issue. We have no idea what regulations we will have in a few year
Said Mr. Kourkountis, with Stela Spiraj, Environmental Expert, RINA, adding the necessity for shipping to ensure “a smooth transition because of sustainability” as of vitally important.
Key considerations with EEXI and CII
Regarding EEXI and CII, Dr. Kokarakis clarified that EEXI is a technical measure, and CII an operational one. Measures to comply with EEXI will apply to CII, but EEXI will have no dramatic effect on emissions reduction in comparison to CII. In addition, Mr. Kourkountis explained that “in some cases EEXI has no point, but without EEXI we don’t have progress in shipping.”
On the other hand, Dr. Edmund Hughes, Director, Green Marine Associates Ltd gave emphasis to longer term measures, saying that:
Short term measures are short term measures, and could be irrelevant in a decade time. We have to think in a longer term. That will help us transition
On the same wavelength, Mr. Smith noted that “EEXI is more of a filter, while CII looks more at the entirety of ships’ operations.”
How to improve CII
Having identified the key issues that come with each regulation, the panelists then shared their views on how to improve them.
According to Mr. Smith, “shipping must focus on correction measures to improve monitoring of emissions,” with Dr. Kokarakis noting that
Energy Efficiency Operational Indicator (EEOI) is a more realistic way to judge the efficiency of a vessel. It follows the mutual funds approach, a Danish proposal to consider the whole fleet or pools of fleets. This will make the definition of CII more robust
Taking a step outside the mere regulatory framework, Ms. Spiraj believes that “an improvement on software will help ship managers do the monitoring on a voyage basis so they can plan in the future, and using the system with predictions on the CII rating might help.”
Key considerations with EU legislation
However, as Dr. Kokarakis mentioned in the beginning of the discussion, shipping has to comply with multiple regulations from different sources. Talking about the EU legislation, he noted that “contrary to the MRV, the Fit For 55 does not go at same pace, as there are delays and many things that have not been announced.”
Another issue that Ms. Spiraj identified is that Fit For 55 could overlap the EU ETS, with Mr. Kourkountis stating that:
ETS has no environmental targets, while the FuelEU experiences difficulties with the calculation of emissions before the delivery of a vessel
Then, Mr. Messinezis questioned how the amounts collected will be returned to finance green projects? The mixed feelings regarding these regulations are also mirrored to Mr. Smith’s opinion, who said that “errors in data reporting will cost much,” with Dr. Hughes warning that “carbon leakage must be addressed.”
How to streamline decision making process
In order to streamline the decision making process, Dr. Hughes gave emphasis to green corridors:
Green corridors are very important. They build a hub around ports based on energy, allowing ports to be connected to each other
Moreover, Ms. Spiraj said that “shipping should be aligned with energy production,” and identified 3 major low energy technologies: Carbon capture; Nuclear power; and Renewable technologies.
Moving forward
Wrapping up the conversation, the panelists shared their ideas on how shipping can move forward to decarbonization. According to Dr. Kokarakis:
We should avoid chasing our tails, focus on specific solutions and not split resources on different solutions. Carbon capture could be a solution, as we will be able to continue to burn the same fuels
Mr. Messinezis agreed with that statement, adding that “carbon capture is realistic approach for the time being, as it is easy to handle for crew, and combined with other technology, like LNG.”
However, Ms. Spiraj mentioned that “more funds are needed to solve the problem of the cost and give the opportunity to R&D to develop low carbon solutions.”
Clarity for everybody is vital in order for everyone to push for the same direction
Mr. Smith stated, with Dr. Hughes concluding that:
IMO must show leadership, for shipping to better understand the technology that is needed for decarbonization