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About a year ago, MEPC 63 came to the conclusions that uncertainty exists in the estimates and projections of emissions from international shipping and that further work should take place to provide the Committee with reliable and up-to-date information to base its decisions on.
The latest estimate is the 2009 IMO Greenhouse Gases Study in which in the share of global CO2 emissions, international shipping is 2,7% of the total. It is very interesting that between the transport modes, shipping is the most environment friendly one as figures show, comparing grams CO2 per ton*km. On last October MEPC 64 Committee produced a draft outline for an update of the GHG emissions estimate for international shipping. It was also agreed that some of the assumptions used in the 2009 IMO GHG Study may need to be reconsidered and an expert workshop, to be held in 2013, should further consider the methodology.
There are actually two methods to use; the one is the bottom-up method or activity based method and the other is the top-down or fuel sales based. Bottom up approach consists of five steps. An estimation of the fuel consumption is being conducted over the whole fleet, based on different parameters as the average installed power, average operating days, average load %, specific value of fuel oil consumption (SFOC).
At the end you come up with a figure on how much CO2 is produced. Some future projections and scenarios also came up and what is interesting in this method is that there is a scale of 10:1 between worst case results and best case scenario!
In my opinion there are some problems with bottom-up approach. The model is complex, with many input variables. Many of these are difficult or impossible to estimate. I will mention just two inputs that I used ship speed, typically taken from fleet databases and ship load which determines hull immersion and fuel consumption.
If you pose the question whether ship speed is fixed, the answer of course is no. Ships do not trade at predetermined speeds. The ship speed is mainly a function of two things, the bunker price and the state of the market and specifically the spot rate, which are anything but constant. Even though the owner’s and time charterer’s speed optimization problems may seem at first glance different, for a given ship the optimal speed and hence fuel consumption is in both cases the same. In that sense, from an emissions standpoint, it makes no difference who is paying for the fuel, the owner, the time charterer, or the bareboat charterer. The owner’s objective is to maximize average per day profits and the time charterer’s is to minimize average per day costs, which is essentially the same problem having the same solution. Therefore, speed reduction is mentioned by many people as a possible “win-win” proposition. There is an obvious way to reduce emissions. And the question is whether you can kill 3 birds with one stone; pay less for fuel, reduce CO2 and help sustain a volatile market.
Greece’s proposal to the Expert Group was to avoid an even more complex bottom-up model that would have to incorporate factors with variable speeds and use top-down instead, which is estimate based on fuel sales. The assumption is made that world-wide sales of bunker fuel represent total consumption of fuel, multiplied by the appropriate coefficients of course. This proposal is compatible with the Market Based Measures (MBMs) in the sense that both Levy and ETS approaches rely on accurate information on bunker fuel sales and the same is true with Japan’s EIS MBM. On the other hand, it is unclear how any of the proposed MBMs would work efficiently vis-a-vis a bottom-up approach.
In the end the Expert Group agreed to do both the bottom-up and top-down approach. New bottom-up will be based on extensive use of AIS data and the decision is to be made at MEPC 65. As for the MBMs, there is basically no progress since 2010 and the momentum is lost. Greece is in favor of the Levy actually and as there are actually about 10 MBMs at the moment, they proposed to keep on the table only Levy and ETS proposals, put on hold hybrid MBMs (US, EIS) and discard all others. That was actually rejected and it was decided to keep all on the table.
As for the Energy Efficiency Design Index (EEDI), it is mandatory for newbuildings and ships will be obligated to have an EEDI less than the reference line EEDI. To reach the required EEDI, the correct solution would be to optimize hull, engine and propeller, which is actually the intent for energy efficiency. But the concern is that the easy solution would be to reduce design speed, which could lead to underpowered ships and more CO2 emissions to maintain speed in bad weather and could also lead to modal shifts. So is there a possible conflict here between EEDI compliance and minimum safe power or speed? There have been proposals by IACS, Greece and others but in my opinion it is unclear how this conflict can be resolved. In the end, there has been definitely some progress made, but there is still a lot of work to be done.
Above article is an edited version of Prof Harilaos N. Psaraftis presentation during 2013 GREN4SEA Forum
You may view relevant video here
