Marine Coatings The information is advisory only no representation or warranty is given to its...

Marine CoatingsThe information is advisory only no representation or warranty is given to its accuracy and your reliance on it is solely at your own risk. All products supplied and technical advice or recommendations given are subject to our standard Conditions of Sale.

EEDI/EEOI/SEEMP Initiatives for driving down CO2 emissions reduction of from world shipping

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Presentation Outline

Background

Introduction to Energy Efficiency Design Index

Introduction to Energy Efficiency Operational Index

Introduction to Market Based Measures

Overview of Implications to the Industry


Background

Despite its unmatched efficiency as a mode of transport, shipping is a large emitter of greenhouse-gases (GHGs), mainly carbon dioxide.

Ships account for over 1 billion tons of CO2 annually, or around 3% of global emissions,

According to the International Maritime Organisation (IMO), CO2 emissions from ships will reach 18% of all man made GHG emissions by 2050 under “business as usual”.

The IMO GHG Study 2009 estimates that eco-efficiency technologies could reduce CO2 emissions from shipping by between 25% and 75%

Global pressure for IMO to increase energy efficiency and thus reduce CO2 emissions from shipping


IMO Measure to reduce emissions

If the shipping industry was to do nothing to tackle CO2 emissions then emissions would continue to grow in parallel with the growth in the maritime fleet.

Energy Efficiency Design Index(EEDI) targets reduction of CO2 emissions from NB vessels through promoting technical measures for new ships. Only impacts on NB vessels after an agreed date.

Energy Efficiency Operations Index(EEOI) is a voluntary initiative which forms part of the Ship Efficiency Management Plan SEEMP and promotes CO2 efficiency operational methods for new/existing ships.

To have the greatest impact on CO2 reductions there has to be an incentive for all existing vessels. Market based measures for existing ships targets the continuous polluters

1st Stage – Legislative approach

2nd Stage – Polluters pays approach

Do nothing

Introduction of EEDI

Introduction of EEOI

Market based measures

Maritime Fleet

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Introduction to Energy Efficiency Design Index


EEDI – Energy Efficiency Design Index

This MAPOL Amendment would require all new construction of ships of 400 gross tonnage and above with a building contract as early as from 1st Jan 2013 are designed to meet a minimum EEDI in an attempt to reduce CO2 emissions.

The purpose of IMO’s EEDI:

• To set a minimum energy efficiency level for new ships;

• To stimulate continued technical development of all the components influencing the fuel efficiency of a ship;

Waiver for developing countriesFive countries (China, Chile, Brazil, Kuwait and Saudi Arabia) manage to secure a commitment to a waiver period on the provision of technical assistance to enable them to meet the EEDI requirements,

Which effectively means that new ships flagged in developing countries need only be EEDI compliant 6.5 years after the expected 1st Jan 2013 date (i.e. 2019).

*Tankers, bulk carriers, gas tankers, container ships, general cargo ships and refrigerated cargo carriers


EEDI – Proposed phased approach

IMO proposed reduction factors relative to the EEDI reference line

Source: MEPC61/WP.10 Annex 1 Page 3; Draft Regulations on Energy Efficiency for Ships


Capacity:deadweightFor cargo carriers, tankers, gastankers, container ships, ro-rocargo and passenger ships andgeneral cargo ships,gross tonnage•For passenger ships,

Vref ship speed measured in nautical miles per hour (knot)

installed power (MCR) foreach main engine (j)

Co2 emission from auxiliaryengine power

Energy Efficiency Design Index Calculation

fW is a non-dimensionalcoefficient indicating thedecrease of speed inrepresentative sea conditions

CO2 emission credit from innovative energy efficient technology

Co2 emission from additional shaft motors minus reduced power requirements from waste heat recovery system

EEDI =(CO2 output per cargo tonne-mile)

Minimizing the ratio of installed power x Specific Fuel Consumption x Carbon content of fuel

Capacity x Speed



EEDI - Baseline calculation (VLCC worked example)

VLCC = 301,653 dwt Attained EEDI1950.7 x 301,653 -0.5337

= 2.32g/tonne-nm

Baseline EEDI calculated using10 year historical data from Lloyds Register Fairplay Database

Baseline Value = a x Capacity-c (Where a and c are constants derived from the regression line)

Therefore for a VLCC with a deadweight of = 301,653 dwt

Attained EEDI = 1950.7 x 301,653 -0.5337

VLCC EEDI = 2.32g/tonne-nm



EEDI – VLCC Worked Example

The baseline denotes the maximum allowable EEDI for newly constructed vessels during the applicable phase. A new ship shall be X% more efficient than the average existing ships of the same type and size in order to be issued with an International Energy Efficiency Certificate.

Attained index < Required index, where the “Required Index” is;

Required design CO2 - index = (1 − X ) x Baseline value 100

VLCC = 301,653 dwt

Attained EEDI1950.7 x 301,653 -0.5337

= 2.32g/tonne-nm

10% reduction

Required EEDI2.32* 0.1 – Attained EEDI

= 2.088g/tonne-nm

An illustration of the IMO approach for attained EEDI values


EEDI Survey and Certification Process

Two stages: Preliminary verification at the design stage, and the final verification at the sea trial Pr

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Certificate DurationThe EEDI verified based upon the technical file and certificate released by class.

Technical File will include;

The EEDI certificate will be valid through out the lifetime of the ship unless the ship has been withdrawn from service of if a new certificate is issued following major conversion.

Current regulations do not apply;

• To ships solely engaged in voyages within waters subject to sovereignty

• To ships which have diesel - electric/Turbine/Hybrid propulsion system until a method of calculation is established.

EEDI – Energy Efficiency Design Index

Ship’s capacity Deadweight or gross tonnage

Shaft power Main and auxiliary engines

Ship speed At maximum design loaded conditions at 75% main engine MCR

Specific fuel consumption At 75% of main engine MCR, 50% of auxiliary engine MCR

Power curves Under fully loaded and sea trial conditions

Principal particularsPropulsion system and electricity supply

InnovationDescription of energy saving equipment

Index figureCalculated value of EEDI


Introduction to Energy Efficiency Operational Index


Plan

Do

Study

Act

Define

Assess

Analyze Try

Study

Standardise

Improve

EEOI – Energy Efficiency Operational Index


SEEMP – Ship Energy Efficiency Management Plan

• SEEMP sets out best practices for the fuel efficient operation of new and existing ships, which works with the EEOI to enable operators to measure the fuel efficiency in grams CO2 per tonne mile of a ship.

• Forms part of the proposed IMO EEDI regulation for new vessels

• Each new vessel will be required to keep a SEEMP plan •Possible implementation of new standards will require such document to be onboard each ship:

–European standard EN16001: “Energy Management Systems”

–International standard ISO50001: “Energy Management Systems”

• SEEMP, although voluntary, is being used by ship owners to help reduce their energy consumption.

Source: MEPC1/Circ 683 Annex 1 Page 11; Ship Efficiency Management Plan


SEEMP – Ship Energy Efficiency Management Plan

• The SEEMP is specific to each ship and is a living document designed to be routinely reviewed and updated

• Documentation of ship specific best practices for fuel efficiency

What is included in the SEEMP:

• Voyage planning (weather routing, just in time, speed optimization,)

• Optimized ship handling (trim, ballasting, use of rudder etc...)

• Hull maintenance/husbandry

• Use of engines and waste heat recovery

• Energy reduction management and reporting

Source: MEPC1/Circ 683 Annex 1 Page 11; Ship Efficiency Management Plan


EEOI – Energy Efficiency Operational Index

EEOI – Voluntary Operational Measurement Tool: • Devised to encourage ongoing evaluation of operational performance by owners, operators or charterers

• Ultimate goal to improve fuel efficiency over time and reduce CO2 emissions

• Provides a measure of energy-efficiency of each voyage for individual ships

• Creates a CO2 emissions indicator for individual ships

EEOI = Fuel x CO2 Conversion Factor

Cargo quantity x Distance

(tonnes CO2)

(nautical miles)(Tonnes, TEU, Persons, …)

Tonnes CO2/(tonne . nautical miles)


EEOI – Worked example

Fuel consumptionFuel Type HFO x CO2 conversion factor

Cargo quantity X distance travel (multiple journeys)

Voyage No. ∑HFO Cons ∑LFO Cons ∑MDO Cons ∑Loaded Dist ∑ Ballast Dist. Total B/L Factor CO2 Index

Tonnes Tonnes Tonnes N. Miles N.Miles Tonnes Tonne - Miles

1 250 50 50 560 560 96,000

53,760,000 20.3748

2 500 60 80

1,400

1,605 96,000

134,400,000 14.8879

3 400 50 65 770

1,500 96,000

73,920,000 21.7835

Sel. Period

1,150 160 195

2,730

3,665

288,000

262,080,000 17.9584

EEOI = (3.114*1,150)+(160+(3.186*195)

262,080,000)*1000000

= 17.9584 tonnes CO2/tonne nautical miles

Fuel consumptionFuel Type LFO x CO2 conversion factor

Source; Amendment to Intertanko adaptation of MEPC Circ 471 Equation (rev.3 - 23rd March 2009)


Introduction to Market Based Measures


Market Based Measures (MBM)

• Once adopted the EEDI would become the worlds first mandatory climate instrument for shipping

• As EEDI only applies to newbuildings, Increased focus on implementing market based measures is essential to help reduce GHG emissions from the existing fleet.

• An expert group has been set up to look at possible market based measures (report to be submitted at MEPC 62 July 2011)

Do nothing

Introduction of EEDI

Introduction of EEOI

Market based measures

Maritime Fleet

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Potential Market Based Measures (MBM)

Some of the potential MBM being considered;

A cap-and-trade system for maritime transport emissions

Under this scheme, ship-owners are required to report emissions and surrender allowances for emissions emitted on voyages: In a cap-and-trade system the emissions are capped and the price of allowances provides an incentive to reduce emissions.

A baseline-and-credit system based on an efficiency index

Under this scheme, efficient ships generate credits while inefficient ships surrender credits. The owner of an efficient ship can sell credits to the owner of an inefficient ship. Credits are generated or surrendered in proportion to the difference of a ship’s EEDI with the baseline value for that ship. The traded unit is based on the EEDI.


EEDI/EEOI and MBM Potential Timeline

July 2011 IMO MEPC meeting, London:

- GHG market mechanisms debate- EEDI mandatory application vote

- Possible move to apply global GHG emissions cap to shipping and aviation

Early 2012 EU plan to regulate GHG emissions in international shipping expected

Jan 2013 Probable start date for EU market-based GHG regulationJan 2013 - 2014 Proposed start date for EEDI regulation Phase 0

2015-2016 Possible start for global bunker levy or emissions trading scheme on GHG emissions.

Jan 2015 - 2019 Proposed start date for EEDI regulation phase 1

Source: Adapted from Carbon Positive http://www.carbonpositive.net/viewarticle.aspx?articleID=2325

http://www.carbonpositive.net/viewarticle.aspx?articleID=2325


General Implications of the Proposed Measures


What are the general implications for;

Ship-owners and Managers - Energy efficiency expected to become an integral part of each of the ship’s owner business

Pro Cons

The EEDI will facilitate ship-owners to purchase the most fuel efficient ships for their fleets and charterers and cargo owners in choosing the most energy-efficient ships for their operation

Benefits : – •Reduce fuel consumption,

•Save money,

•Decrease the environmental impacts from shipping.

Without introduction of market based measures it leaves newbuildings at a potential competitive disadvantage

Results in slower vessels with less flexibility to changing market needs

Requirements of new skill sets/training for employees as the energy efficiency must be monitored and understood to manage environmental impacts of transportation activities during the lifetime of the vessel.

Raises concerns about under powered vessels and insufficient sea margins

Costs incurred for market based measures



Shipbuilders - Build and convert ships to the highest standards of energy efficiency in anticipation of high and volatile fuel prices and demands for low-carbon performance

Pro Cons

The EEDI is a non-prescriptive, performance-based mechanism that leaves the choice of technologies to use in a specific ship design to the industry.

Ship designers and builders would be free to use the most cost-efficient solutions for the ship to comply with the regulations.

In a heavily cost competitive market the EEDI allows for differentiation for some shipbuilders' by switching to low-carbon, energy-saving and other green technologies

Potentially a greater demand for more environmentally friendlier larger vessels

Increase in paperwork, time and costs for certification

Increase in R&D spends

Additional design challenges for cost, safety, reliability, manoeuvrability and heavy weather performance



Paint Companies- CO2 emission reduction from innovative energy efficient technology

Pro Cons

Opportunity to promote/develop/deliver energy efficient products and services

Industry has recognised “smooth” Hull coatings has a positive impact on energy efficiency indexes

Joint venture opportunities with design houses/shipyards etc..

Customer focus on alternative innovative green technologies

Training opportunities on; •Coatings technologies•Monitoring of coatings performance

Increase in R&D spends

Need reliable information on environmental performance of vessels

Need a standard, credible, and efficient approach for sharing environmental data


Means of Reducing CO2 Emissions

IMO 2009 GHG emissions report estimated that CO2 emissions could be reduced as much as 25%-75% using known technology and operational practices, including but not limited to;

Speed Reduction Reduced time in Port Smoother Hull

Waste Heat RecoveryLarger vesselsEnvironmental Energy


What can International Paint do:

We have an array of productsavailable which can have a positive impact on improving energy efficiency

Independent testimony of energy savings

Work in close collaboration with ship owners to analyse and interpret coatings in-service ship performance data

Coatings technical experts who can assist with planning for regulatory change

Coatings training packages to suit your needs


Closing notes

Shipping is likely to face increased analysis of its social and environmental performance,

Volatile and rising oil prices will push up fuel costs significantly while climate change is increasing pressure on shipping to reduce greenhouse gas emissions.

The onus is on ship owners, charterers and others in the industry to stay on top of regulatory, technological and operational developments

Find out how our customers have improved their operational productivity, reduced their fuel costs and enhanced their environmental profile contact your local International Paint representative

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