LEADER BRIEFING
CLEAN TECH, DECARBONISATION AND MARKET COMPLEXITY Shipowners' should consider clean technologies alongside slow steaming when assessing different solutions to EEXI and CII rules, argues Noah Silberschmidt, CEO, Silverstream Technologies Shipowners and ship operators are increasingly facing decisions around the potential effect of environmental regulation on their vessels. In its current state, the global fleet will not be able to meet impending environmental regulation designed at tackling the efficiency of existing assets. In fact, the upcoming introduction of retroactive carbon intensity rules at the IMO is expected to lead to recertification for almost half of the 62,000-strong global merchant fleet, according to DNV forecasts. The Energy Efficiency Existing Ship Index (EEXI) - which will be applied retroactively to all vessels in service in 2023 - and the Carbon Intensity Indicator (CII), will mandate year-to-year carbon intensity reduction and reporting for all vessels are expected to be adopted by the IMO in June. Together they will extend the principles of the well-understood EEDI metric to cover the existing international fleet. Collectively, these two pieces of regulation will put ship owners and operators into a tricky position. At face value, their options are limited. It is without question that scrapping and starting again is economically, environmentally and - in terms of the continuation of the global supply chain - unfeasible and undesirable for many. A graduated transition to 'ecoships' vessels designed with holistic efficiency in mind - is likely, but that doesn't solve the challenge of existing assets. Likewise, while slow steaming may be viewed as the easiest route for some owners to attain compliance with the new regulation, it is an ineffective solution to a long-term problem and risks us undermining the objective of the regulation and, not to be forgotten, slow steaming inevitably requires more vessels. Amid this complexity, we must also recognise that one size does not fit all and each owner and operator's decarbonisation pathway will be unique. For existing assets, shipping's diverse ecosystem of clean technologies must therefore form a central part of our response to EEXI and CII. While it's clear that low and zero carbon fuels will be fundamental in decarbonising the shipping industry into the medium and long term, the required research and infrastructure development - not to mention increased costs - mean they are not suitable to fulfil the decarbonisation action that needs to take place today. On the other hand, proven, available, fuel agnostic clean technologies which can be retrofitted on the existing fleet are vital to ensure we not only reduce emissions today, but enable ship owners and operators to retain a competitive advantage. This is especially important when we think about the cost of low and zero carbon fuels, which will be far more expensive than shipping's current stock of commodity fuels. Clean technologies that significantly increase fuel efficiency will therefore also be vital as long-term solutions that underpin the economic viability of the global fleet. understood benefit of these technologies is their ability to enable greater flexibility within an owner's operations. For
8 | MAY 2021
example, a technology that saves 5-10% net (i.e. after the power to operate the system is deducted from its generated efficiency gain) could be used either to generate a fuel and emissions saving, or to enable a vessel to operate at a higher speed using less fuel. There are however a multitude of factors to consider when selecting a clean technology. For example, the quality, applicability to vessel types, savings potential and durability must be factored into the purchase decision. In effect, and with new regulation looming, it is crucial that owners and operators see these choices for what they are: a committed, large investment that must perform and generate a return for the full lifecycle of a vessel.
8 Noah Silberschmidt, ceo of Silverstream Technologies
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