Energy Efficiency Forum

IMO's legislative work on Greenhouse gases (GHG) and the underlying dangers

It is well known that IMO is working extensively on the Greenhouse Gases (GHG) legislation issue and so far the work in produced may be divided in three areas:

1. Technical Measures: Energy Efficiency Design Index (EEDI, applicable to NEW buildings, due on 1/1/2013, although every country may waive implementation for a period up to four years)
2. Operational Measures: Ship Energy Efficiency Management Plan (SEEMP) and Energy Efficiency Operational Indicator (EEOI) which is known also as CO2 Index, due for all vessels by 1/1/2013
3. Market based Measures: Currently, IMO is considering ten key proposals within MEPC work, out of which the two predominant - producing extreme buzz- are the Bunker Levy and the Emissions Trading Scheme

Unfortunately, the market has to act under UNFCCC and EU threat to enforce Emissions Trading, an issue that will create chaos in the market.

It is well known that the road to hell is full of good intentions and in the Energy Efficiency case several gray areas exist, regarding:

Design Index for newbuildings which:

1. Essentially, imposes a speed limit for every vessel/vessel type
2. Leads shipyards to build underpowered vessels (IMO guidelines re minimum installed power/speed for every vessel type are still pending) or to light weight / MIN Lightweight constructions (MIN EEDI = MAX DWT = Min Lightship) and in no case into  the development and implementation of optimal/Best energy practices.
3. The waiver as an extremely controversial issue, will eventually cause every vessel's competitive advantage to deteriorate, thus all the organizations in the market recommend that this is to be avoided
4. Industry Players (Class, Rightship) have developed an increasing appetite to calculate EEDI for existing vessels, which does NOT make any sense and will distorts competition in the long run in favor of newbuildings
5. EEDI final formula is on the way (pending calculation details and coefficients) and there are still pending guidelines on sea trials for EEDI verification

Ship Energy Efficiency Management Plan (SEEMP) which:

1. Should detail vessel specific measures and incorporate Best Practices for each vessel without minimum prerequisites, on a voluntary base re content
2. Is an Energy Management Tool ; will it be used this way?
3. Needs no approval as per IMO guidelines; will flag states and class respect this as we approach implementation deadline ?

Energy Efficiency Operational Indicator (EEOI) which:

1. It is included on the SEEMP with non mandatory monitoring, recording and reporting; will this remain intact or will it be used as a rate by the market?
2. Will it be used as a means of imposing sanctions to those emitting above a market base line for every vessel type?
3. In case of mandatory monitoring and recording, who will verify the fuel consumed and the voyage mileage? Without verification everyone may claim figures out of the blue !

Market based Measures which:

1. Which one will prevail, on what terms and timeframe?
2. It is clear that the only measure that will NOT distort competition and it is compatible with the nature of the market is the Bunker Levy. How may this implemented since there is no authority that could verify that certain oil quantities have been consumed, the tax is paid and the money have been paid to the appropriate authorities?
3. If a sort of Emissions trading Scheme is enforced what will be the reaction of the market ?

It is clear from above that we are steaming on fog. The challenges are many for all the industry stakeholders (regulators, yards, class, operators, etc.) and numerous debates are on the way.

In our effort to contribute to the investigation of bets strategies and practices we are organizing a Safety4Sea Energy Efficiency Forum in Eugenides Foundation on Thursday, the 8^th of March 2012 (Participation is free, details may be found at www.safety4sea.com) to discuss all these issues and the feedback from MEPC 63 (27/2 - 2/3/2012); therefore we cordially invite you to participate and share your views with us.

The challenges are vast but we are still on the passage planning part. Make best use of it and participate to make your voice to be heard loud and clear.

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Apostolos Belokas

Principal Consultant & CEO, IBS Marine Consulting Group

Managing Editor, Safety4Sea