Dr Chris Craddock – Technical Advisory & Ship Performance Manager at Lloyd’s Register – explores the implications of EEXI, and why an accurate calculation impacts more than just compliance.
The Energy Efficiency Existing Ship Index (EEXI) will introduce new standards around carbon emissions for seafaring vessels when it is adopted by the IMO in June this year. In the first of a two-part series, Dr Chris Craddock – Technical Advisory & Ship Performance Manager at Lloyd’s Register – explores the implications of EEXI, and why an accurate calculation impacts more than just compliance.
The Energy Efficiency Existing Ship Index (EEXI) is a technical efficiency regulation that introduces new limitations on the amount of CO2 emitted by a vessel per capacity tonne mile. While no firm date has yet been confirmed, current expectations for entry into force point to November 2022, with January 1st 2023 being the absolute latest date for implementation according to the IMO.
When this short-term decarbonisation measure comes into force, around 30,000 vessels will fall under its remit. Affected vessels will require the completion of a comprehensive attained EEXI calculation, with the value of that calculation needing to sit equal to or below the ‘required EEXI’ set for that specific ship type and size as outlined by the IMO.
With deep technical knowledge of all ship types, Lloyd’s Register (LR) is already assisting ship owners and technical managers around the world with their EEXI calculations. In the past few months, we've completed many calculations for vessels, and this is increasing rapidly as the adoption date draws closer. In addition to performing those calculations, we have also been helping operators understand their options when vessels don’t meet the newly introduced regulations.
Getting the right result
One challenge here is the issue of accuracy. EEXI is built on the principle that a single formula can be used to evaluate carbon emissions for every ship type in the global fleet. Critical documents such as sea trial reports, model test reports, and engine shop test reports – all generated when the ship was built – are used to inform EEXI calculations. And while this principle works in theory, it has its limitations, too.
To begin with, the age of some vessels means that their accompanying documentation will be similarly dated; quality and accuracy can therefore be an issue. Similarly, many owners will also have invested in various supplementary technologies since the ship was delivered, meaning that the original documentation no longer offers a true reflection of the vessel as it is today.
Inaccuracies like this can have real operational consequences. We anticipate that between 30% and 40% of ships will need to take mitigatory action as a result of their attained EEXI calculation, something that may affect their operations. If the initial calculations are based on inaccurate or incomplete information, the remedial action taken to achieve compliance may be more severe than is truly required, thus exposing owners to unnecessary commercial risk.
Engine Power Limitation (EPL) presents a good example of this. EPL can be a comparatively fast and low-cost way to reduce emissions, and may offer a relatively “quick fix” for non-compliant ships. At the same time, EPL has a negative impact on speed, something that can affect commercial trading arrangements such as Charter Party agreements. Ultimately, a vessel may end up becoming less competitive, simply because EPL was used to address a problem that wasn’t necessarily there in the first place because the calculations were inaccurate.
Understanding the key technical performance values of a ship as it operates today is vital to EEXI compliance.
Where vessels don’t meet EEXI requirements based on calculations from critical documentation, sea trials can help to identify potential routes to compliance.
At LR, we engage with clients to gain a detailed understanding of both the ship and any new technology introduced to it over the years. This enables us to ensure that a sea trial takes account of those factors – within strict supervisory requirements – and can be used to generate a reference speed that reflects the ship as she sails today.
In some instances, this new reference speed may be all that is required to move the attained EEXI from a non-compliant value to a compliant one. Even when that doesn’t prove to be the case, new data from the sea trial can facilitate a more nuanced approach to mitigation; EPL may still be an option, for instance, but so too might be advanced hull coating systems or hydrodynamic energy efficiency technologies – neither of which negatively impact the vessel’s speed.
Taking the long view
For the majority of the fleet, EEXI will not have a significant impact on the operation of their vessels; it is primarily intended to target older and less efficient tonnage. At the same time, EEXI is just the first step on a much longer journey towards decarbonisation, and one that the industry as a whole needs to get ready for.
When Carbon Intensity Indicator (CII) ratings come into force, they will have a much bigger impact on the global fleet. If a ship requires investment now in order to achieve EEXI compliance, there is real value for the owner in looking at future CII requirements, and ensuring that the investments they make today also deliver benefits over the next few years.
In our next article looking at EEXI, we’ll be exploring this strategic approach to carbon reduction and explore options for non-compliant vessels in more detail.