EEXI and CII – what you need to know - Alfa Laval

My first insight is that there is no difference between the now approximately 10-year-old Energy Efficiency Design Index (EEDI) and the new Energy Efficiency ... Home Blog EEXIandCII–whatyouneedtoknow EEXIandCII–whatyouneedtoknow Letmestartthispostwithasmallcaveat:Iamnotanexpertontheregulationofenergyefficiencyonships.Thistypeofregulationhasbeenaroundsince2012,sotechnicallyI’vehadthetimetolearn.However,itfirstbecameaprioritywhenitbegantocrossoverintomyownfocusonemissions.Duetothenewwaveofregulatorydevelopmentsrelatedtogreenhousegas(GHG)emissionsorclimatechange,I’vehadreasontocatchup.AlthoughIstillhavemoretoexplore,I’dliketosharewithyouwhatI’velearnedsofar–answerstothingsthatImyselfwasperplexedby. EEXI–EnergyEfficiencyExistingShipIndex Myfirstinsightisthatthereisnodifferencebetweenthenowapproximately10-year-oldEnergyEfficiencyDesignIndex(EEDI)andthenewEnergyEfficiencyExistingShipIndex(EEXI),atleastintermsofcalculation.EEXIismerelyanEEDIforexistingships.Therearedifferences,ofcourse,whichIwilladdresshere,butfirstweneedtogetthefactsstraightabouthowEEXIapplies. EEXIappliestoallshipsbuiltbefore1January2023.AsisthecaseforEEDI,therequirementsforEEXImustbefulfilledbyallshipsmeetingaminimumsize.(Theminimumsizediffersfromshiptypetoshiptype,varyingbetween250and10,000DWT).EEXIalsoappliestothesameshipcategoriesasEEDI,i.e.bulkcarriers,gascarriers,tankers,containerships,generalcargoships,refrigeratedcargocarriers,combinationcarriers,LNGcarriers,ro-rocargoships,ro-ropassengershipsandcruiseships. Anoteofcautionhere:MARPOLAnnexVIregulations2.13and2.18define“existingships”asshipsbuiltpriorto1January2013.However,thisdefinitionisonlyapplicabletoEEDIinrelationto“majorconversions”.ItisnotapplicabletoEEXI. ThemaindifferencebetweenEEDIandEEXIis,ofcourse,the“reductionfactor”,whichisgenerallylessdemandingforexistingships.MostofthemneedtoreducetothePhase2EEDIlevel,althoughsomeshiptypes(containerships,cruiseships,LNGcarriersandgascarriers)needtomeetthesamelevelasthenewacceleratedPhase3EEDIreductionfactors,whichapplyfrom1April2022.(Thehigherthephasenumber,thehigherthereductionfactor.)Isthisunfair–andwillitcauseproblems? Toanswerthatquestion,wecanlookattheattainedEEDIresultsreportedtoIMOfortheaforementionedshiptypesunderstricterregulation.AnonymizedEEDIresultsareavailabletothepublic,andherewefindthatthemajorityofPhase1ships(2013–2015)alreadycomplywiththesupersedingPhase3requirements(>2025).Naturally,thisisthereasonforregulatingtheseshiptypesmorerigorously(andforimplementingthenewstricterandacceleratedEEDIPhase3reductionfactors). Whenwespeakaboutreductionfactors,weneedtohaveareference.EEXImakesusedofthesamereferencelinesasEEDI,whichiswhatallowsthedirectcomparisonwe’vejustmade.Thereferencelinesarebasedonfleetdatafrom2008,butovertimetheyhavebeenrefinedandupdatedforsomeshiptypes.AsI’llexplaininthenextsection,CarbonIntensityIndicator(CII)usesdifferentreferencelines,whichmakescomparisonwithEEXIandEEDIimpossible.  AnotherpointwhereEEXIdoesdifferfromEEDIistheamountofmainenginepowerthatgoesintothecalculation.IfanexistingshipneedstolimitthepowertoitspropellerinordertomeettheEEXIbymeansofengine/shaftpowerlimitation,itis83%ofthislimitedpowerthatenterstheEEXIcalculation.However,itshouldbe75%oftheinstalledmainenginepowerorMCR(maximumcontinuousrating)–thesameasforEEDI–ifthisnumberislower.Putsimply:Inmostcases,existingshipsneedtoregisterlesspowerintheEEXIcalculationthannewships,whichresultsinalowerattainedvaluethatmakesiteasierforthemtomeettherequirement. OnequestionIhadinthebeginningwaswhetherashipcanlimititsenginepowertobelowtheminimumpropulsionpowerrequirement.Theanswerisyes,ofcourse,sincewe’retalkingaboutshipsbeingabletoreleasethelimitingmechanismsetontheengineorshaft.Thelimitationcanberemovedforthepurposeofsecuringtheship’ssafetyorsavinglifeatsea,whichinpracticecouldmeanwhenoperatinginadverseweatherandice-congestedwaters,whenparticipatinginsearchandrescueoperations,whenavoidingpiratesorwhenperformingenginemaintenance.Ifashipreleasesthelimitingmechanism,itneedstologtheincident–recordingthetime,thereasonandtheamountofpowerconsumed–andreportittotheadministrationatthefirstopportunity. ThemainthingtorememberwithEEXIisthatitisaone-offexercise(somecallita“ticket-to-play”).Itisalsoatechnicalregulatorymeasure,whereasCII,whichwewillgetto,isanoperationalmeasure.EEXIonlyconsidersthedesignofthepowerplant,whichisessentiallytheengine(s).Moreover,itonlyconsidersthepartofthepowerplantthatcontributestopropulsion–not,forexample,anauxiliarygenset(exceptforapartthatcorrespondsto2.5%ofthemainenginepower).Assuch,it’sfarfrombeingarealindicationofactualemissionsor,forthatmatter,anexpressionofthewholeship’senergyefficiency.Itisstrictlyadesignmeasure,andatheoreticaloneatthat.Inthisregard,CIIisamuchbetterreflectionofreal-worldperformance. CII–CarbonIntensityIndicator AlthoughCarbonIntensityIndicator(CII)isusuallytheonlythingwehearmentioned,itisactuallypartoftheSEEMPdocumentationrequiredbyMARPOLAnnexVI.SEEMPstandsforShipEnergyEfficiencyManagementPlan,andtheconceptisasoldastheEEDIregulation.  TheSEEMPisintendedtopromoteenergyefficiencyinthewholeship’soperation.Itlaysoutapathforimprovingtheenergyefficiencyonboardyearbyyear,butthereisnorepercussioniftheshipfailstomeetitsownsetgoals.NopropermeansofSEEMPenforcementiscurrentlyavailabletoadministrations,whichmeansCIIcannotbeproperlyenforcedeither–atleastnotyet.  CIIisarecentexpansionoftheSEEMP,requiringashiptoreduceitscarbonemissionsyearbyyeartoacertainlevelrelatedtodeadweighttonnageandthenumberofnauticalmilestravelled.AsI’vealreadynoted,thesenumberscannotbecomparedwiththeEEXI/EEDInumbers.CIIisshipspecificasopposedtofleetspecific(whichmanyhadhopedfor,asitwouldhaveincentivizedsmartermanagementandcircular-economythinking).Itappliestoshipslargerthan5000GT,whichitselfpreventscomparisonwithEEXI/EEDI,sincethoseregimescategorizeships(exceptforcruiseships)byDWT.Generallyspeaking,therearemoreshipsthatneedtoreportCIIthanshipsthatneedtocomplywithEEXI. AlthoughCIIusesthesameunitasEEXI(CO2/DWT-nm),thetwoarenotcomparable.CIIisayearlyaveragebasedonwhattheshipactuallybunkers,whereasEEXIusesthetheoreticalamountoffuelneededforthepartoftheship’spowerplantcontributingtopropulsion.CIIthusincludesfuelusedforcargooperations,whichEEXIdoesnot.Whileshipsareneveroperatedaccordingtotheirdesign(EEXIisbasedon75%or83%MCR),CIIisadirectreflectionoftheiractualoperation,evenifitallowsforsomeexemptions(e.g.iceconditions,adverseweather,timewaitingtocallonport). LikeEEXIandEEDI,CIImakesuseofreferencelinestowhichshipsmustrelatetheiryearlyreductionfactors.TheCIIreferencelines,however,arebasedon2019datacollectedthroughtheEuropeanUnionMRV(Monitoring,ReportingandVerification)Regulationandthe4thIMOGHGStudy.Haditbeenpossible,IMOwouldhavebasedtheCIIreferencelineson2008data,becausethecarbonintensityreductiontargetsfor2030and2050areinreferencetothisyear.Asaconsequenceofusinglaterdata,thereductionfactorspresentedintheregulationexpressthegapbetween2019andthe2030target–whichmeanstheywillnotadduptoa40%reductionby2030.  Priortotheagreementonthereductionfactors,therewasadisputeaboutthelevelorambition.Somestatesheldthat2019wasanabnormaloperatingyearthatresultedinunnaturallylowemissions,whileotherswereoftheopinionthat2019reflectedananticipateddeclineinshipping.Inotherwords,thetwosidesdisagreedastowhetherornotshippinghadreacheditspeak.Asaresultofthisdispute,CIIreductionfactorswereonlysetuntil2026,ratherthan2030aswasanticipated.Thismeansthatthe2026review,inadditiontoevaluatingtheimplementationexperience,willneedre-examinethereferencelinesinordertocompleteandfinalizethereductionfactortablewiththeyearsfrom2026until2030.  AfinalimportantthingtotouchuponbeforeleavingthesubjectistheratingsystemusedwithCII.Thissystemillustratesthelevelofcompliancebymeansofdifferentzonesorbandwidths–Abeingthebest,Ebeingtheworst.Ataminimum,ashipmustbewithinbandwidthC.However,theshipisgivennodirectincentivetobeinAorB,andthecurrentlevelofenforcementcreatesalmostnoincentivetoleaveDandE.Itmightbethatmarketmechanismswillcreateincentivesovertime,basedontheship’srating.Thishasperhapsbeentheplanallalongonthepartofsomememberstates,whichwouldexplainthelackofrobustenforcement. Headingintothefuture Ifwetrytolookintothefuture,what’slikelytohappenwithCIIandEEDI?EEXIwon’tbeofinterestinthisregard,sinceitmustbecalculatedfollowinganexistingship’sfirstsurveyafter1January2023. CIIislikelytoberelevantbeyond2030.Itpromotesenergyefficiencythroughouttheship,plusitcreatesademandforlow-tozero-carbonfuelsandforcarboncapture(ifthateverbecomesrelevantforshipping).However,asaninstrumentitcannotstandalone,especiallyifashipcannotbesanctionedfromoperatingwhenitfailstomeetthereductionrequirements.Onemeansofensuringtheuptakeoflow-tozero-carbonfuel,forexample,wouldbesomekindofmonetarysystemtomakethepriceoffossilfuelsperMJequivalenttothealternatives.Ifsuchasystemwereputinplace,however,itwouldbeimportanttohaveyetanotherinstrumentensuringthatthealternativefuelsinusedonothavehigherupstreamemissionsthanfossilfuels.(Otherwise,matterswouldbecomeworse,notbetter.) AndwhataboutEEDI?Inthefuture,thepowerplantsinstalledonshipswillbefarmorediverseandbuiltwithfuelredundancyinmind.So,ashipcouldbunkerafuelwithlowcarbonintensity,useit,andthenbunkerafuelwithhighcarbonintensity.Giventhis,howshoulditsEEDIbecalculated?Shoulditbecalculatedwiththelowcarbonfactororthehighone,rememberingthatthecalculationismadebeforetheshipsetsouttosea)?Likewise,iftheshipusesammoniaasfuel,itsEEDIwillbezero–butsurelyitspowerplantwillnotbe100%efficientbecauseofit? ThesequestionsshowthatthemindsetbehindEEDIisbecomingoutdated.TheonlythingEEDIreallyincentivizesistheinstallationofsmallengines,asthesehaveprovedtobemorecost-effectivethan,forexample,researchanddevelopmentofshipbuildingmaterialsandhulldesign.Manyshipaspectsandapplications(insulation,heating,cargohandling,etc.)arecurrentlydisregardedbytheregulation,andtheshipbuildingmonopolyhascertainlynotcreatedtheenvironmenttopushformore. Inmyview,weneedtoscrapEEDIandcreateanewinstrumenttoassesstotalenergyefficiency–onethatisn’tdefinedintermsofemissions,forwhichwealreadyhaveCII.Increatinganewinstrument,weshouldlookattheenergyefficiencyoftheentirepowerplant,whichincludeslookingataccommodationinsulation,hullresistance,propellerefficiency,etc.,etc.Withaninstrumentthatsetsaminimumpercentageefficiencyforallkeyaspectsoftheship,wewouldfinallyachievearealistictoolforreachingsustainabilitygoals.