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Shipowners must stay alert to upcoming environmental regulations

Draft Amendments to MARPOL Annex VI to Reduce the Carbon Intensity of Existing Ship

With air pollution from ocean-going ships having a cumulative effect on the overall air quality problems, MARPOL Annex VI was adopted in 1997, which limits nitrogen oxides (NOx) and sulfur oxides (SOx) emissions from ship exhaust and prohibits deliberate emissions of ozone-depleting substances (ODS). The 75th session of IMO’s Marine Environment Protection Committee (MEPC 75) approved draft amendments to MARPOL Annex VI to introduce an Energy Efficiency Design Index (EEXI), in November 2020. The EEDI and EEXI amendments will be adopted at the 76th session of its MEPC in June this year.

The MEPC 76 amendments are to enter into enforcement in the fourth quarter of 2022, but the exact date will be confirmed in June. Under the mandated EEXI, existing vessels above 400 gross tonnages will need to comply with tighter fuel-efficiency regulations. The adoption of the EEDI and EEXI amendments is expected to help IMO achieve its target of reducing carbon intensity by at least 40% by 2030.

The draft amendments bring in further requirements to the energy efficiency measures in MARPOL Annex VI, to access and measure the energy efficiency of all ships and set the required attainment values: the technical requirement to reduce carbon intensity based on EEXI, and the operational carbon intensity reductionrequirements based on a new operational carbon intensity indicator (CII).

* Reduction rate is linearly interpolated between the ship sizes, with the lower target applying to the smallest ships. ⓒMaritime Insight, data: IMO

MARPOL Annex VI regarding mandatory goal-based technical and operational measures

The amendments represent short-term measures for GHG emissions reduction employing a two-part approach to tackle both technical and operational aspects of restricting GHG emissions.

1) Energy Efficiency Existing Ship Index (EEXI)
Like the Energy Efficiency Design Index (EEDI), EEXI is a technical or design efficiency index that requires a vessel to achieve a required level of technical efficiency (required EEXI) under specified reference conditions (specified vessel’s design and arrangements). The calculation of Required EEXI will utilize the existing EEDI reference lines.
The Required EEXI is the vessel’s required maximum grams of CO2 emitted by the vessel per capacity tonne mile under reference conditions in line with its type and capacity. The Attained EEXI for a vessel must be less than or equal to the ‘required EEXI.’

2) Annual Operational Carbon Intensity Indicator (CII)
New regulations will be introduced to establish a Required Annual Operational CII for specified vessel types. The CII determines the annual reduction factor needed to ensure continuous improvement of the vessel’s operation carbon intensity within a specific rating level. Utilizing the existing framework of the Ship Energy Efficiency Management Plan (SEEMP), ships of 5,00 gross tonnage and above will need to revise their SEEMP. The attained annual operational CII would be required to be documented and verified against the required annual operational CII. The rating would range on a scale from A to E, each of which indicates a major superior, minor superior, moderate, minor inferior, or inferior performance level. A vessel rated D for the consecutive years, or E would have to submit a corrective action plan, showing how the required index would be attained. 

ⓒMaritime Insight

Options for vessels to meet their target EEXI

The alternative compliance options available for vessels to meet their target EEXI values include a reduction in propulsive power know as an Engine Power Limitation (EPL), retrofitting of Energy Efficiency Technologies (EETs), or switching to a lower carbon fuel. EPL is likely to be the easiest way for older vessels to meet EEXI requirements since it requires minimal changes to the vessel and doesn’t alter the underlying performance of the engine.

EPL, the easiest way to meet EEXI requirements for vessel operators

EPL establishes a semi-permanent, overridable limit on a ship’s maximum power, which would take the form of a mechanical stop screw sealed by a wire that limits the amount of fuel entering an engine. Or electronically controlled engines would be applied to build EPL via a password-protected software fuel limiter. EPL would be overridable if a vessel is operating under adverse weather conditions and require extra engine power for safety reasons. In this case, the override should be recorded and reported to the appropriate regulatory authority. Unless EPL is enough to reach the required target, these ships will need to consider retrofits of energy efficiency technologies (EETs).

A technical issue arising from the adoption of EPL is a potential increase in maintenance costs on the vessel where an EPL is applied. Operating an engine at lower than its designed power level can cause a very detrimental effect on engines and components, resulting in additional maintenance. The adoption of EETs is also a subsidiary solution to be utilized in combination with an EPL.

ⓒMaritime Insight

Ship operators or owners must consider the safety of their crew and property when opting for a reduction of the engine power

Given that, whereas EEXI is a technical measure requiring one-time certification, the CII is an operational measure, which mandates year-to-year operational efficiency improvements, after ship owners have their vessels certified in compliance with the required EEXI, they will have to put the effort into improving their carbon intensity on an annual basis from an operational perspective for a downward carbon trajectory to 2030. Therefore, shipowners must be able to answer the question of how much further their carbon reduction can go from a technical perspective after the ships have already reduced their installed power. This means they have to predict that even vessels that comply with the EEXI can be in the lowest CII category. Owners must also have in mind the implications of their choices on the safe operations of their ships since reducing power can reduce maneuverability. That is, they should be able to ensure that a reduction of the propulsion power doesn’t compromise the safety of their crew and property.

Controversy over IMO’s restrictions on speed or engine power to reduce CO2 emissions

There have been some disagreements at the IMO over whether restrictions on speed or engine power would be the better measure. According to the paper issued by the International Council on Clean Transportation (ICCT) 2020, the relationship between varying levels of EPL and CO2 emissions based on 2018 real-world ship operations using ICCT’s systematic Assessment of Vehicle Emissions (SAVE) model, EPLs of 20% or less would have negligible impacts on ship CO2 emissions. 30% to 40% EPLs would reduce CO2 from existing ships modestly, on the order of 2% to 6%. Larger EPLs of 50% or more could meaningfully reduce CO2 emitted from the ship by 8% to 19% depending on ship type and size. The paper points out that benefits diminish over time if EPL is not required for newer ships while expected CO2 emission reductions fall about 60%. It emphasized that EPL needs to be set a level stringent enough to lower maximum speeds to the point where they begin affecting significant numbers of operational hours. Therefore, EPL will not proportionately reduce CO2 because most ships today are already operating at well below their maximum speeds and, therefore, well below maximum continuous rating (MCR).

ⓒMaritime Insight

Understanding of the impact of EEXI and preparation for the cost-effective compliance options

As is mentioned, EPL is a secondary option and one of several strategies for which shipowners can opt to meet a measure of EEXI. Other alternative options, such as energy efficiency retrofits or early retirement, also can be considered. Given that vessels that haven’t demonstrated compliance and got a new IEEC issued will risk being unable to trade internationally, early action to understand the impact of EEXI and preparation for the cost-effective compliance options are required before June 2021.

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