The patchwork of emission regulations
Shipping is an international business with many different parties involved – shipowners, ship managers, flag states, coastal states, port authorities, classification societies and so on. The freedom of the seas/right of passage is fundamental, yet this needs regulation and control. We need a level playing field and rules which apply to all vessels.
It was to satisfy this need that the International Maritime Organisation (IMO) was established as part of the United Nations. IMO currently has 174 member states and three associate members. The IMO’s primary purpose is to develop and maintain a comprehensive regulatory framework ensuring “safe, secure, environmentally sound, efficient and sustainable shipping through [international] cooperation”. As an international body, its regulations need to have broad acceptance amongst its member states. Consensus is built through the work carried out by its committees, but this all takes time.
It was the oil spill from the Torrey Canyon in 1967 which initially triggered the environmental alarm bells. Despite the universal concern, it took more than five years for the MARPOL convention to be signed on 17th February 1973, and it took another ten years for there to be sufficient ratifications for the convention to come into force. Since then, there has been a steady stream of new regulations which have come into force, but the rate at which these have been agreed and ratified has remained slow. Today the environment has become one of the hottest topics, and there is considerable impatience at the slow rate of progress. As a result, individual countries or economic unions are under pressure to establish their own rules leading to a regional fragmentation of the regulatory framework.
There is now a patchwork of legal regimes which creates uncertainties and unnecessary extra expense both for equipment manufacturers and for the shipowners who have to comply with this complex network of regulations. For example, the regulations for ballast water management systems vary according to whether the vessel is visiting the United States or not. Another example relates to scrubbers. Despite being internationally approved, some ports have unilaterally decided to ban them. How can shipowners make such major investment decisions when they are surrounded by such a level of uncertainty?
Another area of concern is the tendency to treat each topic in isolation from the overall picture. A typical example is how the various emission types (NOx, SOx, CO2, CH4) have been tackled. An early focus on NOx emissions led to the acceptance of a compliance process based on a factory engine test. This was entirely reasonable at the time, the argument being that having this method is better than nothing at all. However, we all know that testbed results and actual levels of emissions in daily operation are two entirely different things. Modern technology has developed a long way in the intervening 20 or more years with the result that it is now possible to monitor these emissions in real time. Yet, despite all the talk about Measure, Record, Verify (MRV), we are still not even measuring. The same is true of SOx. While the regulations stipulate that a vessel must change from 0.5% to 0.1% sulphur fuel as it enters a SECA, often a couple of hundred miles offshore, no effort is made to measure, record and verify that this is taking place.
The focus is now moving to the reduction of CO2. Once again, the selected measuring and recording methods belong to that last century. They are based on a lot of paperwork, from records of bunkering notes to records of distances travelled and tank measurements in order to calculate the fuel consumed, but still there is no real measurement of the CO2 generated or in the case of LNG the CO2 and more importantly, the CH4 generated. Nor is there yet any penalty for operating a vessel inefficiently.
The most recent example is the Energy Efficiency Existing Ship Index (EEXI) which is set to be adopted at MEPC 76 in June 2021 and enter into force in January 2023 at the latest. The EEXI regulations impose stricter limitations on the amount of CO2 produced per capacity tonne mile by existing ships. Ships that do not comply will have to take measures to reduce their carbon footprint. The issue is that the calculation method for the EEXI can be inaccurate since it relies on data from sea trial reports, model test reports, engine test reports, among other documents. At the same time, the formula will apply to all ships, regardless of their age or condition. This inaccuracy, which has been already admitted by leading industry parties, can lead to shipowners having to take stricter measures than they need to comply with the rules. And with the even stricter Carbon Intensity Index (CII) coming in a few years as well, shipowners must make smart decisions now to ensure the easier transition into the new requirements in the future.
CEMS as a solution?
The installation of a Continuous Emission Monitoring System (CEMS) connected to a GPS and a recorder would provide a simple way to measure, record and verify all of the above emissions. Such devices exist on the market and are already installed wherever scrubbers are in operation. The cost of installation has dropped significantly in recent years and is no longer an obstacle. Yet, there is still no attempt to treat the control of these emissions holistically by insisting on the installation of a CEMS.
Now that we live in the age of digitalisation and the Internet of Things, why is the marine industry still focusing on paper-based systems to record and analyse? We should be embracing the opportunities that digitalisation presents. True MRV is now readily available in a simple to operate, fully automated CEMS package. Whilst no system is fully tamperproof, it is easy to check if/when a CEMS has been tampered with. With such systems, port authorities can check electronically the performance of a vessel before she arrives in port by using the downloaded data to ensure that all regulations have been adhered to throughout the voyage. Ship managers can benchmark their vessel’s performance against her sister vessels or similar vessels. The economic and energy-efficient operation can be optimised by reference to the emissions produced. Innovative ideas can be easily tested and proven. Crews can receive alarms and take remedial action in time. Efficiently operated vessels can be rewarded, and industry data can be collated and analysed electronically.
It is clear that the threat to our environment is serious and that action is needed urgently. The IMO procedures are too long-winded, whilst local initiatives have caused a fragmentation of the regulations making compliance both more difficult and more expensive. IMO needs to modify its processes to significantly speed up the introduction of new international rules and regulations. At the same time, it is important that the environmental issues are treated more holistically and that all regulations are written in such a way that they can be easily modified to take account of new technology without having to go through the laborious procedures currently in place. To succeed, we need to be able to legislate quickly to the challenges which we face, taking into account the technological developments which will provide both new solutions as well as improved means of enforcement.