International shipping emitted an estimated 870 million tonnes of CO2 in 20071, which amounts to some 2.7% of the global CO2 emissions of 32 billion tonnes in 2007. To put this figure into perspective, if shipping was a country, it would rank amongst the world’s top ten CO2 emitters, ahead of countries such as the UK and Canada.

CO2 emissions from shipping will increase
Shipping is at present by far the most environmentally friendly transport alternative in terms of emissions of greenhouse gases, particularly CO2. International shipping transports large volumes of energy, food, raw materials, semi-finished and finished goods and, barring a fundamental restructuring of the world’s economic systems, we can assume that continued global economic growth will result in steadily increasing demand for shipping transportation services.

The crucial dilemma is that while the rest of the world is attempting to reduce its CO2 emissions under the framework of national and international agreements and regulations, shipping’s emissions are unregulated and appear set to increase – keeping pace with the expected long-term increase in world trade. If this situation persists, shipping emissions may approach 20% of the global CO2 emissions by 2050.

This is an untenable situation, both environmentally and politically, and regulatory measures are already being considered to ensure that this does not become reality. One of the industry’s key concerns is how these regulatory proposals may influence ship design.

Bunker fuel consumption and co2 emissions
Estimates of actual worldwide shipping bunker fuel consumption, and therefore CO2 emissions, prepared by different academics and bodies have varied widely. The IMO therefore commissioned an updated greenhouse gas study, this time including all the recognised authorities on shipping fuel consumption. The first phase of the study was presented to the IMO Marine Environment Protection Committee (MEPC) 58 in October 2008, and a subsequent revision has adjusted the estimate slightly to 870 Mtonnes2.

Breaking this down into ship categories, bulk carriers are in third place, behind tankers and container carriers.

It should be fairly obvious that any measures, regulatory or other, intended to reduce shipping emissions will have to include bulk carriers in order to have the desired effect.

International Regulatory response
The international regulators’ concerns about shipping’s CO2 emissions can in a sense be traced back to 1997, the year of the UNFCCC Kyoto Protocol, the international climate treaty intended to achieve "stabilisation of greenhouse gas concentrations in the atmosphere at a level that would prevent dangerous anthropogenic interference with the climate system"3#. Shipping and aviation were not included at that time, and responsibility for further proposals and action in these sectors was delegated to two UN bodies, the IMO and the International Civil Aviation Organization (ICAO) respectively.

Due to both increasing global concern over CO2 emissions in general and greater pressure to address shipping emissions in particular, the IMO has highlighted the CO2 issue at recent meetings of the MEPC. Adding urgency to these deliberations has been the upcoming UNFCCC COP15 conference in Copenhagen in December 2009, where the UNFCCC expects the IMO to deliver a comprehensive solution describing how shipping will regulate its CO2 emissions.

The IMO MEPC is not the only regulatory body that has expressed concern over shipping’s CO2 emissions – initiatives for regional regulations originating in the European Union (EU) have been instrumental in catalysing urgent action at the IMO. Both the European Commission (EC) and the European Parliament (EP) have been vocal in their demand that shipping takes action to regulate and ultimately reduce its CO2 emissions. The EU has been clear in stating that, unless the IMO manages to develop and implement satisfactory international regulatory mechanisms, the EU will implement regional regulations. The EC has also stated a deadline; the IMO has until the end of 2011 to act. Underpinning this message, the EC intends to issue a directive in 2010 prescribing regional measures that will come into force in 2013 if the IMO response is unsatisfactory4. Without going further into the additional possibilities of nation states implementing regulations ranging from domestic carbon taxes to minimum efficiency standards, it is therefore safe to state that the IMO is under considerable pressure to deliver a comprehensive international set of regulations. The following four main proposals are presently being debated:

Market-based instruments for shipping, such as carbon trading, bunker levy or emission compensation funds

A voluntary (possibly mandatory at a later stage) Ship Efficiency Management Plan (SEMP)/ "Best Practices" guideline

A revised, voluntary Energy Efficiency Operational Indicator (EEOI, previously known as the CO2 Operational Index5#)

A new mandatory Energy Efficiency Design Index (EEDI, known at an early stage as the CO2 Design Index)

While all these proposals have at their core the idea of improving energy efficiency, either directly or indirectly, the proposal with the largest potential impact on ship designers and builders is the EEDI.

EEDI – The Energy efficiency design index
The basic concept behind the EEDI is similar to the mileage standard for automobiles, in the sense that it attempts to describe how energy efficient a design is. It does not, however, say anything about how efficiently a given design is operated. Other key differences are that the EEDI does not encompass the idea of a standard duty cycle, while it does take into account the amount of cargo the design is capable of transporting.

The basic idea is described by the following equation; ‘Environmental cost’ is the CO2 emissions, while ‘Benefit for society’ is simply the amount of useful transportation work the ship can do.

Based on this principle, Japan and Denmark in particular have been instrumental in putting forward concrete proposals as to how ship design elements can be put into this basic framework. Following up on this, a range of issues, concerns and suggestions have been raised and addressed by modifying the original formula. The present formula has not yet been accepted by the IMO but is the consensus output from the 2nd Intersessional GHG Working Group (London March 2009). It will be discussed and possibly further modified at MEPC 59 (London July 2009). The present version is as follows, with the purpose of each of the equation’s main elements indicated in Figure 2.

The formula is intended to be applied primarily as a design criterion. For a given ship design, the specific or ‘attained’ EEDI is calculated and compared to the required EEDI as mandated by the IMO regulations. One of several key questions in this context is therefore the issue of how the required index is defined.

While a formal agreement on the dataset(s) to be used to form the baseline(s) is still outstanding, work has been done by Det Norske Veritas, Germanischer Lloyd and others showing an approach that is generally supported. Baselines are derived by taking a ten-year sample of data from the Lloyd’s Register Fairplay database, filtering it for obvious data entry errors and applying the EEDI formula with all correction factors set to 1.0. This typically results in plots similar to that shown in Figure 3.

So far, the MEPC has focused on developing the formula and the concept for developing baselines and has not extensively debated precisely what the requirement level should be. At present, there is a proposal that the required index should be set at an as yet undefined percentage below the baseline, and that it should also be tightened on a regular basis. The precise values and dates have not yet been discussed in depth, but will obviously be of great concern to ship designers and builders.

Regarding the industry response to the EEDI, it is worth noting that concerns have been raised by various stakeholders throughout the process. A key concern is, of course, that the EEDI should not lead to less safe ships by, for example, either reducing the design scantlings or resulting in under-powered ships. The details will not be discussed here, suffice it to say that the EEDI is not yet finalised and that significant issues remain to be addressed. However, as discussed above, the industry needs to recognise that there is a political process that makes it imperative for the IMO to be able to present regulatory results this year and that there for that reason is strong political pressure for the EEDI to become part of the regulatory framework in one form or another.

Climate change, CO2 emissions and ship design
It should be quite clear from the above that there are strong regulatory pressures coming to bear on ship design. These pressures, which spring out of climate change concerns, translate into strong drivers for technical improvements in design energy efficiency. When considering growth scenarios for shipping, it is therefore likely that ships will have to on average more than double their energy efficiency by 2050 simply to maintain the present industry sector emission level. To achieve real emission reductions, even more radical efficiency improvements will be necessary.

However, when considering all the operational, technical and structural measures in a combined fashion, DNV believes it in a best-case scenario is possible to reduce CO2 emissions per ton mile by 50% for ships being delivered in 2030, and by 70% for ships being delivered in 20706#. The precise figures will, of course, vary according to ship types and trades, and will require significant technical developments. A rough breakdown into the various categories is indicated in Figure 4.

It is quite clear that going beyond this and achieving actual reductions in the total shipping CO2 emissions will require fundamental breakthroughs, including radically new fuels and technology. It is therefore crucial that ship designers, equipment manufacturers, shipyards and all other innovative forces in the shipping industry not only continue to contribute innovative design solutions but also support the basic research that will be needed for true CO2 emission reductions to be achieved.