Are you prepared?
19th September 2011 05:38 GMT

Recently, MEPC 62 saw the IMO make significant strides in environmental protection particularly with regard to MARPOL Annex VI, the most significant of which was the adoption of the Energy Efficiency Design Index (EEDI) regulation for new ships. The EEDI will require new ships to meet a minimum level of energy efficiency with ships built between 2015 – 2019 needing to improve their efficiency by 10%, rising to 20% between 2020 and 2024 and 30% for ships delivered after 2024. Apart from the EEDI for new ships, it makes the Ship Energy Efficiency Management Plan (SEEMP) mandatory for both new and existing ships, regardless of flag.

This was the result of a steady movement towards the regulation of carbon in shipping and marks a decisive turning point in the direction that the industry is heading. It can be foreseen that after implementation of EEDI, the next step would be to monitor CO2 emissions/fuel consumption, of which the means of enforcement have yet to be decided on. However, what is clear is that accurate fuel measurement and prudent fuel management is going to be a big part of it.

Is the industry prepared for greater regulation that would require more transparency in fuel measurement and reporting? More importantly, can the industry afford not to be?

It is obvious that the stakes are increasing as fuel costs continue to grow and as governments get more involved in regulating fuel consumption. Market based measures such as the Vessel Efficiency System proposed by the World Shipping Council would provide rewards to more energy efficient ships while other mechanisms would look at imposing levies depending on the quantity of fuel consumed.

This would indicate a significant shift in the way business is conducted. Thus far, the industry has accepted that discrepancies occur during the bunker fuel transfer process and these are usually dealt with through commercial settlements between both buyer and supplier. Where previously the transaction of fuel was between a ship operator and a fuel supplier, to keep tabs on how much fuel is consumed in order to either incentivize or punish, third parties will have to be more involved in the purchasing process.

Port authorities and governments, for example, may have to, in the medium to longer term, devise a means of obtaining an independent reading of how much fuel was actually consumed by ships. Technology such as continuous emissions monitoring systems (CEMS) and mass flow meters have been seen as being a potential answer to fuel and emissions measurement. Mass flow meters have also received a lot of attention and appear to be gaining popularity in the maritime and bunker industry in particular with ship operators who buy their own fuel. However, technological solutions can be costly and unless ship operators see a direct correlation between the use of this technology and their bottom line, convincing them to adopt these systems might be both difficult and costly.

Another alternative could take the form of an independent surveyor monitoring every single bunker delivery as well as reconciling a ship's fuel consumption record book to give independent assessments to ship operators and regulators as to a ship’s annual fuel consumption.

Should independent surveyors be required to monitor fuel consumption across the world’s fleet, this would require a tremendous amount of specialised manpower to be deployed. Does the industry have the capacity for such a feat? While recent developments raise a lot of questions, it is imperative that all stakeholders in the shipping industry assess whether they are prepared for further changes and carefully examine what can be done to ensure that they are equipped for the future.

Douglas Raitt,
19th September 2011 05:38 GMT

Comments on this Blog
Daniel Kane - Propulsion Dynamics Inc.
12th October 2011
Hello Douglas. Thanks for the comments and insights. There is another aspect to this, which is the fuel efficiency of the vessel itself. Using advanced methods-of-analysis it is possible to compare the FOC from sea trials to current day condition. It is common to find ships are 10% - 20% less fuel efficient today than when on trials. Of course the shipowner does not see this because the ship is experiencing a speed loss (corresponding to the increased fuel use of design speed was attempted). Our CASPER Service for hull and propeller performance monitoring is now spreading to use by charterers with the cooperation of the shipowner. This is a major step forward as just a few years ago, shipowners were reluctant to allow any 3rd party monitoring of fuel efficiency and bunker consumption. So, methinks that the upward pressure (from the charterer) and the downward pressure from IMO will truly achieve (someday) a 3rd party monitoring if fuel consumption. Not only fuel consumption but benchmarking and 'rating' ships by type to further promote shipowners invest more money in hull and propeller smoothness. Eventually it will be a win-win.

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