Shipowners and operators should be well into planning ahead for the EEXI and CII regulations coming in from 2023, and what improvements they should make so their ships comply. The best future-proof path forward is to base investment decisions on analysis of a ship’s actual carbon footprint, says research manager Mia Elg of ship designer Deltamarin.
Energy-efficiency rules under EEXI and CII are being extended to cover practically all tonnage, old and new. Given that we will potentially move towards even tighter emission targets even faster than expected, I recommend that owners and operators first perform a preliminary analysis of the status of their existing fleet to give a basic understanding of the compliance challenge, then ensure their ships pass the EEXI requirements. Many will have already done this simply as a ticket to operate.
The first, and in my experience, most popular, option is to implement engine power limitation (EPL). Main engine EPL is fully possible for many typical bulkers and tankers because it seems the typical operative load is rather low, between 50% and 70%, mainly due to higher design speeds versus typical operating speeds today.
If EPL isn’t an option, you can move on to assessing technologies that improve engine and propulsion performance, and energy-saving devices (ESDs). Various individual ESDs can reduce EEXI value marginally, typically 2% to 5%. These include shaft generators, devices for improving hydrodynamic performance and waste-heat recovery. One interesting alternative that may alone reduce EEXI values considerably is wind-assisted propulsion; our research shows that even moderate wind-assisted propulsion combined with several other technologies could reduce EEXI values by 10%-15%.
Carbon capture is an additional measure in the future to reduce a ship’s footprint. Depending on a potential carbon tax introduced for fuels, we estimate a realistic payback time for carbon capture, with an emission reduction rate of between 25%-40%, of less than five years. However, we don’t yet know how it will be considered in the EEXI calculation or CII reporting.
For all ships it’s important to be aware that good performance in EEXI doesn’t guarantee an acceptable result in CII. In addition, EEXI is a ‘one-time’ check, whereas CII is the required level of ship ‘carbon performance’ that will be assessed continually.
Calculating CII rating is straightforward. All you need is the annual fuel consumption (converted to carbon emissions with a fuel-specific carbon factor), the distance the ship has travelled and its capacity. Any ship landing in the D band for three consecutive years or getting an E rating in a single year will need an improvement action plan.
I suggest optimization investment should focus more towards CII, but still keeping in mind the vessel’s ‘real’ carbon/environmental footprint. This is because the relationship between EEXI versus CII versus actual energy efficiency is not always linear. The rules are constantly developing and will be corrected towards real environmental impact in any case.
What mix of improvements are optimal requires ‘energy modelling’ simulating the operational profile of the vessel and the different machinery and available fuel options. Our research shows energy modelling and related analysis can have a massive impact on CII performance and power consumption per mode.
Any energy-saving method applied on a typical cargo ship will bring similar savings in the CII context. This is not always the case with a typical passenger ship because the calculation punishes ships with large hotel load and that spend considerable time in port (although shore power is a good method to improve CII performance).
Since there is no guarantee that the CII correction factors under discussion, still after MEPC 78 on 6-10 June, will be introduced in final IMO rules, I recommend focusing on the ship’s actual carbon footprint as the basis for investment decisions as the most future-proof way forward. In addition, while the regulation involves no hard punishment and owners will have several years to improve scores, the real drivers for good CII performance will likely be commercial ratings where being a low performer will not be good PR, and high fuel prices where energy savings are good for business.