Why ships’ ‘real’ carbon footprint is key to investment

Saving energy

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 the 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 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 emissions 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 is 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.

Simple equation

Calculating the 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 optimisation 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.

Energy modelling

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 a 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 at 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.

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