The ship manager perspective towards EU MRV and future MBMs

Panos Zachariadis, Atlantic Bulk Carriers Management gave a presentation entitled ‘’The ship manager perspective towards EU MRV and future MBMs’’during the 2016 GREEN4SEA Conference & Awards . He stated that MRV will be another cumbersome, bureaucratic, time consuming and costly regulation for operators, crews and administrations, with very dubious results. 

I think we got a tip of iceberg idea what a huge bureaucratic exercise is going to be for operators and crew. MRV as a regulation is totally unnecessary. The metrics used like EEOI and all other indices are non-sense. They don’t show anything about the efficiency of the ship.

When I say that MRV is unnecessary as a regulation, I mean that owners and operators always measure the efficiency and the fuel consumption of their ships and it is good to have improvements. But to report all those things to Big Brother in such unnecessary and complicated fashion is something beyond me.

Why did we end up with this MRV regulation? And to understand today, it is better to look a little bit into to the history. When IMO a few years ago was discussing design measures for the ships, the discussion was divisive. On one hand, there were the developed countries and on the other there were the developing ones that refused to go along with such regulations. They would call on the CBDR principle, common but differentiated responsibility of the Kyoto Protocol. And we would have countries like China saying you can decide whatever you want but the differentiated responsibility gives us the right that the ships that we build in China do not comply with the EEDI.

What happened is that the developed countries played a trick on China, Brazil, India and the other developing countries. Being mostly members of MARPOL Annex VI, they decided to make the regulation a part of Annex VI. And to do that, all you have to do is that the countries who are already part of Annex VI, they have to agree to that. Accordingly, Norway made the proposal when nobody expected it:  “We propose to do this as part of Annex VI”. All the other developed countries agreed. And, as you can understand, the developing countries were fuming. They wouldn’t agree to discuss after that trick played on them, any operational measures at IMO. Two years were wasted discussing market based measures, what to apply to the ships. Hence, as part of a delaying tactic the developing countries would say yes, but we don’t know how much the ships are burning and what is the consumption and what is the efficiency and how we then can discuss market-based measures. Consequently, IMO decided to take up something that  looked  less harmful to the discussion, the MRV, by collecting information from monitoring, reporting and verification.

The EU’s MRV is totally unrealistic, in my opinion. The MRV at IMO is going reasonably well; as reasonably well as something unreasonable can go. Because, most of  the delegates seem to understand that cargo reporting doesn’t really provide anything into the efficiency of your metric; Weather condition is important and complicates things; You cannot penalize ballast voyages, etc. It seems to me that many people at IMO understand the futility of EEOI.

So, do we really need MRV? Of course not. Unless, you have something else in mind and your target is not to really measure the fuel consumption of the ships, but you are trying to index ships in a nice way, so you can later include shipping into carbon trading. Thus, for carbon trading, emissions trading schemes, you need two things. You need an index for the ship, where the ship stands in the bottom diagram. The bottom diagram is the average, the baseline. If you are above, you have to pay up to the carbon exchange to buy CO2 allowances. If you are below, you can make some money, you can sell CO2 allowances, but don’t be so sure. Because, those baselines will be dropping every few years like the EEDI baselines do.

MRV Energy Indexing Baselines

Human nature likes simple categorizations up and down, left and right, black and white. Therefore, we tend to like simple indices in this fashion. They are attractive, but all these indices are unfortunately utopia.  

Some like EEOI because it is simple, but some like it because it serves their interests. To make it more palatable, they use various excuses such as:

• it is not perfect, but it is the best we have
• we need to account for transport work
• it smooths out if you use rolling average and so on

The following is the rolling average of EEOI of a ship that is dedicated four years on a route Brazil to Asia. Every point on that graph is the average of the previous 365 days. Yet, it is all over the place. The broken line at the bottom is the speed of the ship. It is the red line that is the EEOI of the ship as a yearly rolling average. This is what I call all over the place.

So, from that data we collect all the EEOIs of individual ships in order to try to find the averages. I am using graphs from submissions to IMO. This is what the average would look like.

 The following is an amusing diagram for the general cargo ships where from a nebula of thousands of EEOIs at 10.000 deadweight range, which -remember- don’t mean anything,  the experts tell us where the ship should be if it had 300,000 deadweight or 320,000 deadweight. This is the kind of non-sense I am talking about.

Lies, damned lies and statistics, a quote popularized by Mark Twain, although it wasn’t his. In statistics you have what we call a correlation coefficient -R squared (R²)- that shows you how well the line you drew is actually representative of the data, how well it fits your data. A correlation greater than 0.8 is generally described as strong. Whereas, a correlation less than 0.5 is generally described as weak correlation to your data.

Here, we have the EEOI and the deadweight of ships and the R² equals 0.1441.

On the bellow diagram, the baseline R2 is 0.05, practically zero. Remember anything below 0.5 is supposed to be non-sense.

The following are the kind of diagrams we see quite enough. The title of these diagrams is “correlation”.  I don’t see any correlation in those scattered diagrams except for the last one and then if you look closely, it is actually a plot of distance against itself. Of course, if you plot something against itself, you are going to get good correlation. 

In order to conclude. Can we stop wasting time, energy and money with irrelevant indices and measures and really try to reduce global CO2 emissions? How can we do that? We can do that if we actually move cargo from airplanes, from trains, from trucks to ships instead of saying that ships in the future should reduce their transportation emissions by 60%.

All the global transportation sector contributes 14% the man-made greenhouse gases. Although, the beef industry contributes more. I haven’t heard anything seriously being done for that.

Above text is an edited article of Panos Zachariadis presentation during the 2016 GREEN4SEA Conference & Awards.

You may view his video presentation by clicking here

The views presented hereabove are only those of the author and not necessarily those of  GREEN4SEA and are for information sharing and discussion  purposes only.

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About Panos Zachariadis, Technical Director, Atlantic Bulk Carriers Management

Panos Zachariadis is Technical Director of Atlantic Bulk Carriers Management Ltd since 1997. From 1984 to 1997 he was Marine Superintendent in the company’s New York office. His shipping experience spans diverse areas including sea service in bulk carriers and oil tankers, dry dock repairs, new building supervision and specifications, ship operations and chartering. He holds a MSE degree in Naval Architecture and Marine Engineering from the University of Michigan. He has been attending IMO since 2004 as a member of the Greek delegation. He was extensively involved with IMO’s Goal Based Standards and the Greek study which reversed the IMO decision to make double hull bulk carriers mandatory. He was also instrumental in developing the new IMO coating standard (PSPC) for all ships’ ballast tanks. Currently he is involved in the new IMO environmental regulations for ships. He has written numerous technical guides, papers and articles and has been awarded the 2011 Efkranti Shipping Personality award for promoting Greek Shipping internationally. Member of Hellenic Chamber of Shipping and UGS technical committees, BIMCO Marine Committee, ABS European Technical Committee, BOD HELMEPA and MARTECMA.