13 May 2021

Steen, Kris and Jan answer your Carbon Accounting & SCC questions

Our expert panel, made up of Steen Lund, CEO, RightShip, Kris Fumberger, Head of Sustainability and Environment, RightShip and Jan Dieleman, President, Cargill Ocean Transportation and Chair of the Sea Cargo Charter drafting group, covered a lot in our GHG Emissions Webinar For Charterers. Please find a selection of the most common questions answered by our panel.

Carbon accounting: how can I get the initiatives done on my ship to be accounted in the calculation?

To ensure your vessel has all the correct information, including energy saving equipment, we require vessel specific documentation, approved from Class, that verifies that those details and quantifies the benefits.

 

To Kris Fumberger, ship owners and class societies are asking group peer data to proceed with calculations to achieve desired GHG rating for their fleet. Information needed though from RightShip/Sustainability department coming with significant delay. Why does this happen?

This is something we are aware of and while we try to work very closely with class societies and other third parties we are looking to improve this workflow to enable more timely estimations.

 

How much time does it takes to get the GHG Rating upgraded once the docs are submitted?

We try to see to our GHG verifications as quickly as possible. At the moment we prioritise those linked to pending vets, then all customers and finally other requests. Usually within 1-2 days.

 

How to become a verifier? Would a RO be a verifier as they do the same on behalf of Flag Administrations?

It is up to a signatory to select an appropriate third party verifier, of which RS is one. There are no set requirements for a third party verifiers.

 

 

Is the intention of RightShip to accept EPL below MPP? 

RightShip does not accept EPLs below level 1 minimum propulsion guidelines. For more information see our press release here https://www.rightship.com/resources/news/rightship-engine-power-limitation-epl-acceptance-criteria-update/

 

LNG only reduces CO2 emissions by 12 percent, without considering the methane slip, so how will we achieve 50%? 

You are correct. Simply switching to LNG as a fuel will not help us achieve the IMO's reduction targets. Other approaches including new innovation will certainly be required, however LNG can be a viable immediate step towards decarbonisation.

 

How does LNG reduce CO2 emissions, as the factor is only slightly less than fuel oil?         

LNG has a lower carbon factor than fuel oil, so despite there being only a slight difference, when you take into account that you will be using tons of fuel, that slight difference gets multiplied to achieve those lower emissions. However LNG does have its own issues, such as methane slip, which cause other complications for emissions calculations.

 

If a vessel already has a EPL below MCR but above MPP - can the EPL again be lowered to MPP to get the best EEXI Index?

Thanks for your question, at RightShip, we currently do not accept verifications for vessels which have performed more than one EPL. For more information see our press release here https://www.rightship.com/resources/news/rightship-engine-power-limitation-epl-acceptance-criteria-update/

 

In respect to deadweight bin sizes, why are they not aligned with commercially sized ships?         

The SCC has utilised the size classes specified in the Third IMO GHG Study, I believe for consistency purposes. Their documents states "This is to ensure that once the carbon intensity of voyages is understood, it is simple and practical to understand climate alignment. This also ensures that numbers are comparable between Signatories."

 

How is the proposed AER justified, if one vessel is optimised to have minimum ballast passage and Max Loaded passage, her grading will be lower than the peers?

At RightShip we believe that a flaw in the way the AER is calculated is that cargo quantity is not included, therefore vessels will be rewarded for travelling with near 'empty ships' (where they will look very efficient). The Carbon Accounting and the SCC methodology include the ballast distance and cargo carried in the EEOI equations and emissions outcomes.

 

Why does MGo have emission factor greater then HFO and LFO?

MGO does have an emissions factor greater than HFO and LFO due to the different carbon content within these fuels. Despite this, HFO generally has higher emissions properties for other pollutants such as SOx, NOx and PMx.

 

Which are the main measures driving CII improvement? Is there any framework in place for comparing the business case incl. TCO/ROI of different technologies?     

We are not aware of such a framework - however suggest contacting class for ship specific advice on technologies and their benefit. 

 

For maritime industry the universal target is 40% reduction in emission by 2030 and 50% by 2050. The sooner the better. My question is that why the industry is not coming on a common platform. IMO going on things like EEDI, EEXI, record of annual emissions, RightShip having GHG Rating, EU using carbon credit, some countries thinking of applying carbon tax. Ship owner may be confused with various methodology. Any solution?

We agree that there are an array of emissions reduction solutions and at times this can seem confusing. The aim of the Sea Cargo Charter is to create a more standard approach for charterers to follow and align to the IMO's emissions reduction strategy. RightShip's GHG Rating follow's the IMO's EEDI methodology. While it may seem confusing, the strong signal from industry is one of decarbonisation and following that path is sure to result in positive outcomes.

 

Looking at vessel design, fuel options, speed etc to drive GHG reductions, why is the industry not looking at cargo efficiency, ballast leg reductions, more transparency on front / back haul legs including reward / penalty approach on charterers' behaviour?

These are all valid approaches to reducing emissions. The Sea Cargo Charter methodology (which differs from the CII methodology) considers the ballast leg and cargo carried in the EEOI equation and outcome. Therefore charterers are not rewarded for using vessels that have travelled long ballast legs or for not optimising their cargo carried.

 

In view of GHG ratings and emissions, will ME-GI engines consuming LNG will be downgraded in the pecking order in the GHG ratings in record time once other more sustainable fuels are brought to market?

LNG as a fuel has a lower carbon emissions factor than HFO and MDO so can be seen as an appropriate interim solution to emissions reduction. However you are correct that as newer more sustainable fuels come into play, carbon emissions outcomes in Carbon Accounting and the Sea Cargo Charter will look much more favourably on fuels with lower emissions factors. Alternatively, the GHG Rating looks at vessel design so fuel choice operationally is not considered.

 

How should charterers apply ballast legs that are beyond their control and why should owners be penalised for the position that the operator ultimately choses?    

In RightShip's Carbon Accounting and the Sea Cargo Charter methodology ballast legs are included in the calculation. They are seen as significant contributors to overall emissions and therefore are reasonably included to promote improved practices in this area. 

 

How do see your rating system working alongside IMO's own A-E rating system (which on the surface is very similar but not at all when you review the detail)?          

RightShip is currently assessing the IMO CII requirements, and will update the industry in due course.  It is anticipated that MEPC76 will provide further information and details relevant to IMO CII. 

 

What are the new methods available for improving the Carbon Intensity Indicator other than the ones already present in the market till end of 2030 progressively over a period of time?

At RightShip we have seen a huge influx in the types of energy effiency equipments installed on vessels to improve performance, which is hugely positive. We suggest you speak to class or another appropriate third party for operational advice specific to your vessel.

 

Future ships will have varied technology for various ships, eg, some may use hydrogen some LNG. How can RightShip ensure an GHG ratings in this case? How can vessels with different technology be compared with same scale?     

The GHG Ratings look at vessel design. If a vessel is designed to predominantly use a certain fuel type, the benefit of that will be included in the calculation. Operational practices including use of more sustainable fuels, weather routing, use of other efficiency technologies will be realised in the Carbon Accounting results, which examine operational performance.

 

How should charterers apply ballast legs that are beyond their control and why should owners be penalized for the position that the operator ultimately choses?

The GHG Ratings look at vessel design. If a vessel is designed to predominantly use a certain fuel type, the benefit of that will be included in the calculation. Operational practices including use of more sustainable fuels, weather routing, use of other efficiency technologies will be realised in the Carbon Accounting results, which examine operational performance.

 

Is the intention of RightShip to consider Category A high performance coatings as contributors to EEDI/EEXI reduction? These will be verified by CFD which will be ship-specific?

We currently recognise hull coatings with a plus symbol. RightShip's new platform also highlights the details of when these were applied on the vessel overview page, which is an important factor. As you have mentioned we can only accept benefits to the EEDI if it can be shown that the vessel is operating more efficiently than first designed. This needs to be through CFD modelling for example, and by a third party. In the past we have not had instances where all of the above requirements have been met for hull coatings.

 

I am worried that the charterer's involvement in Carbon accounting, especially imposing various requirements to the  operators will be one more nail on the coffin. I think it is not necessary. Do you agree with me?  

We believe that in order to meet the IMO's emissions reduction targets, a unified approach to emissions reduction is required from all arms of industry.

 

Considering that IMO and Flag Administrations that actually are it's members are the single regulatory authority in shipping and the only one that shipowners "owe compliance to", are either Rightship primarilly or SCC secondarilly trying to create a "novel / second" pole of authority?     

At RightShip we work under the preface that improved transparency in the industry ultimately leads to improved sustainability standards. That has always been our mission, in safety and sustainability to highlight the top performers to drive positive actions, not just those that meet regulation. They are all voluntary schemes and not in conflict with regulatory forces.

 

How do you suggest overcoming the inherent conflict between placing an EPL and achieving the charterers required speed/consumption?    

We do not think EPLs in themselves are the answer to improved performance and that looking towards other energy efficiency equipment is a preferred solution.

 

I am part of an Engine Technology Team of a Company which provides energy efficiency measures with Engine Part Load Optimizations. Beside the Derating of the Main Engine we combine our Projects with fixed and/or overridable EPL. But in case of our customer who is also your customer we have to change also the EPL to MPP to achieve the best EEXI as well as your RightShip Rating. - So is it possible within a energy efficiency upgrade to change the EPL from before? We will renew the IMO certifications and renew the approval of the class.

The EPL requirements as outlined above (1 EPL per vessel) remain RightShip's acceptance criteria. Therefore we will not accept this EPL.

 

 

 

 

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