The transition to decarbonization will be (re)started in MEPC77

By VesselBot’s Marketing Team
November 25, 2021

This week (22-26 November) is taking place the 77th meeting of the International Maritime Organization’s (IMO) Marine Environment Protection Committee (MEPC). Among the topics of the agenda will be around the proposals for ships’ emissions reduction and improvements in their energy efficiency including exhaust gas cleaning systems and Black Carbon emissions that contribute to global warming. In addition, the committee will examine the proposal for revision of the Data Collection System to include information on the shipʹs required and attained EEXI, CII values and rating in the IMO’s fuel consumption Data Collection System.

Annually, global Shipping is responsible for the 90% of traded goods and the 2%-3% of global emissions which is comparable with a heavy industry nation such as Germany. Shipping emissions are projected to rise by up to 250% by 2050 if regulatory measures are not taken and the industry is mobilizing to reduce them in the coming decades.

International Maritime Organization have set a long-term roadmap to reduce shipping’s C02 footprint at least 40% by 2030 and total carbon emissions by 50% by 2050 compared to 2008.Yet amid member states there is pressure for more stricter targets. One for the proposals that will be discussed in the meeting is the revision of IMO’s goals and elimination of GHG emissions until the middle of the century, backed by number of countries including Japan, Norway, the United States and the United Kingdom. At the same time, European Union have launched legislative package known as ‘’Fit for 55’’commiting to cut emissions at least 55% by 2030.

The introduction of a carbon levy on marine fuels will be also part of the talks with various proposals on the table. Marshall Islands and Solomon Islands are among the nations that advocate for a carbon price of $100 per ton by 2025 that would be increased in five-year or annual intervals. The submitted levy is on the same direction with European Union existing carbon scheme that would include the shipping sector to its Emissions Trading System (ETS) from 2023 for vessels over 5,000 gross tonnage.

The effects of vessels’ air pollution can be more noticeable to local port and coastal communities. The congestion and queues of vessels outside major ports waiting to load and unload have heightened the total emissions around harbor cities according to research findings from Singapore’s Nanyang Technological University (NTU) Atmospheric pollution from shipping is linked to respiratory diseases such as asthmatic symptoms and lung cancer along with cardiovascular diseases.

One of the challenges is despite the different characteristics of shipping’s individual segments, large scale changes need to be managed. Alternative energy sources solutions such as LNG, hydrogen and ammonia are not compatible yet with existing fuel storage systems along with lack of land based bunkering infrastructure which is expected to grow the next few years. It is estimated that least 1 trillion dollars in investments the next three decades are required for the fully decarbonization of shipping by 2050. The cost of retrofitting the existing fleet of 60,000 vessels along with building zero carbon vessels can be excessive.

In order to prepare to this complex and constantly changing regulatory environment with the most effective strategy, operational efficiencies can make a significant difference. Therefore, voyage optimization technologies are already used to achieve significant results. Recent developments in advanced technologies, the availability of high-quality data from multiple sources combined with performance models can help fleet operators to optimize their fleet’s time charter equivalent (TCE). An indicative result for a 14k DWT Chemical Tanker that used VesselBot’s Voyage TCE Optimization System achieved an average increase of TCE at 9.2%. Additionally achieved a substantial reduction in GHG emissions by ~12% which is the equivalent with 116 ΜΤ of CO2. The system identifies the optimal and feasible sea route for all port calls, suggests the optimal speed/rpm, bunkering location, and estimates the ETA for each vessel in conjunction with commercial and other terms to optimize TCE performance for each voyage. Furthermore, monitors in real time the execution of the voyage and provides real time updates on the actual performance and identifies variances from the expected performance as per each vessels digital twin. Reporting dashboards lets users to identify proposed actions to optimize their next voyages.

Technological innovations have also been employed to present complete visibility of carbon emissions to interested parties during vessels voyages. Digital twins models utilized for all types of commercial fleets which are built using vessel particulars, engine and propeller data alongside with machine learning algorithms can monitor and predict fuel consumption and as well as GHG emissions with high accuracy. By taking into consideration the above factors, end users can have clear image for the emissions of the actual or predicted route.

Therefore, measuring current and future emissions in real time may assist variety of market stakeholders to address issues that will substantially affect their businesses. For example, chartering departments can benchmark their vessels with their competitors or how they are positioned in the fleet. Financial institutions may understand the impact of potential regulations on their portfolios. Charterers may identify before Chartering a vessel which would be the optimal vessel to charter on a TC basis especially if these vessels will have long TC periods extending beyond 2023. Freight forwarders may offer accurate net off mechanisms to their customers for the emissions that their shipments are emitting.

The decisions of MEPC77 will set and even enhance the deadlines for the short- and long-term sustainability of the sea transportation and its independence from carbon-based fuels. Shipping is a highly competitive multi-segment Industry and for this foreseeable transition, stakeholders will need to reevaluate their long-term strategy and prepare for the variety of challenges that will lie ahead. A series of initiatives that have been announced before and during the COP26 between governments and industry leaders such as First Movers Coalition are rallying a positive sign towards this direction. Simultaneously, existing measuring energy efficiency systems capable of predicting future emissions based on trading patterns can provide the needed (internal) guidelines and know-how to managements to apply and maintain their dedication to this decarbonization path. Thus, this journey provides a great opportunity for collaborations and alliances to share the costs and knowledge to adapt successfully in the upcoming net-zero landscape.

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