What are the viable options for the

shipping industry
by
Erik.Ranheim@INTERTANKO.com
Manager Research and Projects
London 12 November 2008

The Challenges
The world demands greener
shipping
Emission from shipping is
dirty and harmful for the
health and the environment
GHGs emission from
shipping is not directly
regulated under the Kyoto
protocol
IMO assumed
to regulate GHG emission
Must react swiftly

The size of challenge?

CO2 Emissions per Unit Load

by Transport Mode
Large Tanker

Large Containership

Railway

Coastal Carrier

11

Standard-size
Commercial Truck

49

Small-size
Commercial Truck

226

Airplane

398
0

100

200

300

400
Units Relative

Source:Ministry of Land, Infrastructure and Transport (Japan): The Survey

on Transport Energy 2001/2002 MOL (Japan): Environmental and Social
Report 2004

Shipping energy efficient

4

Trends
Co2 emission, energy use, global trade
Index

Source: Fearnleys/INTERTANKO

There has been strong growth in shipping

Engine break specific fuel consumption

g per kWh

Source: Lloyds Register

Fuel efficiency in shipping has has improved

Measures for current ships essential

Fleet

Type ships
Bulkers
Combination
Container
Dry cargo
Misc.
Offshore
Pass./ferry
Reefer
RoRo
Tankers
World fleet
>400G:
%

World fleet>
400 GT

Source: LRFairplay

Order

> 15
years

7,530
98
4,601
14,184
12,165
5,140
3,816
2,080
2,225
11,823

3,304
13
1,351
1,244
694
1,112
194
29
340
2,940

3,877
20
3,521
4,385
3,354
1,966
1,493
344
929
6,251

63,662
100%

11,221
18%

26,140
41%

Cleaner, Simpler and more

Efficient ships

Above 400 GT:

63,600 ships
11,200 on order
26,000 <15 years

Industry Initiatives

Switching to cleaner fuel will

Reduce overall global emissions
from ship funnels

Cleaner, Simpler and more

Efficient ships

and will therefore

in addition leading to a much
cleaner and sounder environment
Reduce the amount of GHGs,
due to
Less fuel consumption,
and
The switch to cleaner fuel will
provide better opportunities for
developing more fuel efficient
engines

Revision of
Annex VI will
also reduce
CO2 emission

OPTIMISING SPEED
Economy mode:

174

MC/MC-C 100% SMCR optimised

ME/ME-C 100% SMCR optimised

3-4g/kWh

ME/ME-C Part load optimised

SFOC

3-4g/kWh
168

162
20

30

40

50

60

70

Engine shaft power

80

90

100

110 % SMCR

Industry initiatives
Ship Efficiency Management Plan SEMP
SEMP for each ship in operation
SEMP to contain:
Best practices to save energy
Voluntary Operational Index (for each
voyage & over a period of
time/voyages)
Other voluntary operational measures
Energy inventory

INTERTANKO, ICS, BIMCO,

INTERCARGO work on a model
SEMP guideline for IMO

Industry initiatives

Ship Efficiency Management Plan

INTERTANKO Best Practices
to be approved by the Council
(Nov. 2008)
OCIMF Energy Efficiency and
Fuel Management an
appendix to TMSA 2
OCIMF opens for consideration
of c/p terms to optimise the
voyage and other operations to
save energy during
transportation

Best Practice on tanker

emissions & energy efficiency
Programme for measuring and
monitoring ship efficiency
2. Voyage optimization programme

3.

Speed selection optimization

Optimised route planning
Trim optimization

Propulsion Resistance
Management Programme

Propeller Resistance
Hull Resistance

MC/MC-C 100% SMCR optimised

ME/ME-C 100% SMCR optimised

3-4g/kWh

ME/ME-C Part load optimised

3-4g/kWh
SFOC

1.

Economy mode:

174

168

162
20

30

40

50

60

70

Engine shaft power

80

90

100

110 % SMCR

Best Practice on tanker

emissions & energy efficiency
4.

Machinery optimisation Programme

5.

Main Engine monitoring and optimisation

Optimisation of lubrication as well as other
machinery and equipment

Cargo handling optimization

6.

Cargo vapours control procedure on all

crude tankers (80-90% vapour reduction)
Cargo temperature control optimization

Energy conservation awareness plan

On board and on shore training and

familiarisation of companys efficiency
programme
Accommodation-specific energy
conservation programme

Best Practices

Participation from
a wide range of
tankers

INTERTANKO
Membership
3,100 tankers

Applicability/
effectiveness

Depend on fleet
characteristics

Dynamic
continuous
improvement

Advice, input:
*Class
*Charterers
*Yards
*Other owners
*Others

Various, individual measures

Monitoring, assessment
Adjustment/corrective action

INTERTANKO a forum for exchange of

information and experience

Proposals in IMO

Fuel efficiency design index

Measuring stick for

shipbuilders to assess fuel
efficiency/CO2 emissions
Incentive for shipyards will
create energy efficient
designs to be competitive
Wide support in IMO, except
Some developing countries*
Need baseline (what
constitutes the best ship
Sea trial Esther Spirit
today)
All suggestions by INTERTANKO on design index
formula were agreed at MEPC 58:

Use value of ME power at 75% MCR

Use AE power at 50% MCR
SFCs at these values are given by the engines EIAPP Certificates
Sea trails to be part of the verification

The CO2 operational index

MEPC 58: voluntary tool to
monitor each ships fuel
consumption
An instrument for evaluating
quantitatively the effect of
operational fuel efficiency
measures, such as speed
reduction or optimum
navigation
No direct link to design index
Monitored over time by a
Rolling Average of the fuel
consumption per tonne mile
for last 10 voyages (as
proposed by the industry)

v22

v15

v8

Voyage 13: 152 grams per tonne-mils

v1

Voy 1
Voy 2
Voy 3
Voy 4
Voy 5
Voy 6
Voy 7
Voy 8
Voy 9
Voy 10
Voy 11
Voy 12
Voy 14
Voy 15
Voy 16
Voy 17
Voy 18
Voy 19
Voy 20
Voy 21
Voy 22
Voy 23
Voy 24
Voy 25
Voy 26
Voy 27

Grams/tonne mile

Average CO2 emission Aframax

23

17

11

160

120
80

40
0

Advantage of the rolling average

Average CO2 Index

A Market Based Instruments (MBI) should

Reduce CO2 emission levels in real terms by
additional amounts to normal reductions
Not unduly distort competition
Ensure simple allocations of emission allowances
Be non-discriminating of ship types and flags
Be difficult to evade.
Be acceptable to Kyoto Annex I as well as developing
countries.

Be legally, politically and

institutionally acceptable.
Be easy to administer, monitor
and enforce.
Preferably be global and
regulated by IMO

Levy on bunkers - Danish proposal

Challenges:
Legal, competence to
establish such a scheme
Administrative who sets,
collect, disburses and
monitors revenues, and
For what purpose, and
Will it lead to actual
emission reduction?

Met with resistance and

regarded as tax

Possible application of an independent international

GHG fund:

Acquisition of emission quotas/credits generated in other industrial sectors

Funding projects in developing nations
Funding IMO Technical Cooperation program

International Compensation Fund

for GHG Emissions from Ships

International Compensation Fund

to be passed on to the customers,
i.e.
No direct effect on the operators
Independent of the value of the
goods being transported
Must be global, independent of flag
Based on United Nations
Convention on the Law of the Sea
(UNCLOS)

Principle of no more favourable treatment of ships applied through

Port State Control
Based on UNFCCC principle of common but differentiated
responsibilities and capabilities
Should be allocated to specific compensation aims to be decided by
the contracting parties
Proposed by Denmark, Ref International Oil Pollution
Compensation Funds (IOPC)

Conclusion

Shipping set for reduction in emission to air

Cleaner, reduced emission from shipping under way,
by
Sharing of information to develop Best Practices will
reduce emission, and
Technical advances to improve fuel efficiency and
reduce CO2 emission will be made
Market based instruments are controversial and
complicated but may be introduced on regional
basis (ref. Europe)
INTERTANKO prepared to continue to take the lead
and to be a driver in terms of practical and realistic
measures for the industry