By Barry Parker (gCaptain) –
With the upcoming International Maritime Organization (IMO) environmental committee meeting now a scant three weeks away, a treasure trove of written material, some factual, some opinion and some offering a little bit of both, is available for journalists to review in advance of the meeting—officially tagged as Marine Environmental Protection Committee (MEPC) 79.
The various documents provide part of the backdrop for discussions taking place at MEPC79, as well as offering reference material for the various working groups that labor in the background seeking to develop specific recommendations for rules.
The Carbon Intensity Index (CII), with its earliest iterations set to kick in at January 2023, already the subject of back and forth at recent IMO working groups, has fueled controversy; it applies to ships of 5,000 gross tons and above. In the A,B,C,D,E rating protocol, vessels will fall into bands—with “A” being the best (less greenhouse gas emissions for the distance sailed) and “E” the least, based on annual CO2 emissions. While its “trajectory” of modest annual reductions in emissions intensities (i.e. the bands get lower each year) has been mapped out through 2026, the MEPC will be discussing the pathway to 2030, with likely sharper reductions in second half of the decade.
Intercargo, a trade association representing owners of drybulk vessels with NGO status at IMO meetings, has brought out its concerns in its document REDUCTION OF GHG EMISSIONS FROM SHIPS: Information on the effects of charterers’ orders, distance travelled and waiting time on Carbon Intensity Indicators. The document offers comments on guidance adapted at the previous MEPC meeting. Interestingly, Intercargo’s paper, with a focus on an example 2011 built 58,000 mt Supramax bulk carrier in international trades, draws upon a paper published by the Blue Sky Maritime Coalition, a North American group focusing on decarbonization (not a participant in IMO meetings).
The analytics, in a spreadsheet with a series of graphical simulations, provide sensitivities on hypothetical voyages of varying lengths and frequencies, along with times in port and otherwise waiting tied to cargo operations. The bottom line is that a ship on longer voyages with full utilization puts out the most absolute carbon (derived from a multiple of estimated fuel consumption). Yet, with the CII measure looking at carbon per nautical mile traveled, a vessel with this trading pattern will score better (meaning a lower CII) than the same vessel employed on shorter trips, or with greater port and waiting times. Intercargo, in its presentation, drives home the point that routings and waiting times impacting the CII ratings are often outside the control of the shipowner; instead, they are driven by charterers’ orders.
The Blue Sky analysis also figures in document MEPC 79/7/13 (The impact of short voyages and waiting time on CII rating), a submission by INTERTANKO (a trade organization representing independent tanker owners ) and a host of shipping associations. In the MEPC submission, INTERTANKO et. al refers to the same Blue Sky analysis, which also looked closely at the trading patterns of MR vessels controlled by Overseas Shipholding Group (NYSE: OSG), and operated in Jones Act trades. The issue here is how vessels in short voyages are penalized when the CII numbers are crunched; an analysis of two sister ships (one trading intra-U.S. Gulf- Tanker I in the diagram, and the other, Tanker 9, trading U.S. Gulf to U.S. East Coast mainly Delaware Bay) shows this dramatically.
What to do? Intercargo parses the wording for politeness in the MEPC79 submission. They say: “INTERCARGO is supportive of the short-term measures adopted by the Committee but is of the opinion that to make the measure fit for purpose and to achieve the ambitions of the Organization careful consideration of CII calculation including correction factors and/or voyage adjustments will be needed.”
Intertanko is also very polite, imploring that: “the Committee is invited to consider the report referenced in the annex to this document, and to recognize the key importance of adopting CII correction factors for short voyages and port waiting time.”
In contrast, Blue Sky’s wording (its document is not submitted to MEPC) does not mince any words: “The conflict with environmental objectives is that the CII score improves as transit distances increase while conversely generating a higher release of carbon at the expense of the environment. The ultimate environmental goal is reduction of absolute carbon emissions and this demonstrates how the CII metric falsely portrays a vessel achieving improvement.”
The fuel/speed curve plays a huge role in all of this; throttling down the power reduces emissions but, over a fleet-wide basis, it also reduces tonnage supply (and this could drive up freight costs). Putting themselves into their customers’ shoes and infusing a much needed commercial tone, Intercargo (picking up verbiage from Blue Sky) says: “it is logically doubtful that a Charterer would unilaterally opt for slower speeds to achieve improved emission outcomes.”
Amusingly, Intertanko et. al say, in their submission, that the OSG tankers were : “all… built at the same Korean shipyard between 2007 and 2011.” Imagine that—Jones Act vessels built in a Korean yard! They were in fact built in Philadelphia, using a Hyundai Mipo design.
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