Barriers for Adoption of Energy Efficiency Measures in Shipping Industry

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Image Credit: Green4sea.com

Shipping is the cheapest and most energy-efficient way of transporting cargoes across the world. Over 90% of world trade is carried by the international shipping industry. For the modern world, without shipping, the import and export of goods from one end to another end of the world are not possible. Seaborne trade continues to expand, bringing benefits for consumers through the lowest and decreasing freight costs. There are around 50,000 merchant ships trading internationally for transporting every kind of cargoes. Everyday each of these ships burns tonnes of fossil fuels to produce the power for propulsion and daily operation. Fossil fuels are the major energy sources in today’s world but still when over consumption takes place lead to disastrous effects such as air pollution and climate change. Burning of fossil fuels in large marine diesel engines produces carbon dioxide, carbon monoxide, nitrogen monoxide, nitrogen dioxide, sulphur dioxide etc. that have severe bad effects on the habitats as well as human health.

According to IMO’s Third GHG Study (2012), the total emissions by international shipping for a year of 2012 are estimated to be 796 million tonnes CO2 which is approximately 2.2% of global CO2 and 816 million tonnes CO2e for GHGs combining CO2, CH4 and N2O which is 2.1% of global GHG emissions. The GHG CO2 is one of the main aspects of global warming and climate change. Rise in temperature of the earth has resulted in melting of polar ice caps, flooding of low lying areas and rise in sea levels. If such conditions conquer, the earth will face radical changes. Therefore, the global warming and climate change have become a serious issue to today’s world. The United Nations Conference on Environment and Development (UNCED) was held at Rio de Janeiro in 1992 and alternative energy sources to replace the use of fossil fuels was one of the agendas in relation to global climate change. This initiative was followed by an effort to make an international agreement, called Kyoto Protocol, within the United Nations Framework Convention on Climate Change (UNFCCC), setting internationally binding emission reduction targets. It posed additional pressure on the International Maritime Organization (IMO) and therefore  amendments have been made to the MARPOL Convention in Annex VI, Regulations for the prevention of air pollution from ships (IMO 2011) that include the new chapter 4 for introduction of the Energy Efficiency Design Index  (EEDI), ensuring carbon emission constraints within the design of new builds (above 400 gross tonnes) and the presence of a Ship Energy Efficiency Management Plan (SEEMP) onboard all new and existing vessels. These regulations have been come into force from 1st January 2013 (IMO 2011).

Improved ship operation and innovative technologies in energy efficiency will continue to provide a wide range of options and solutions for different stakeholders to implement energy efficiency regulations in their organisations. But it has been observed that the energy efficiency concept is not so clear to the stakeholders of shipping industry. The concept should be cleared to all the stakeholders of shipping industry. Simply to explain, the energy efficiency is a very broad term referring to many different ways, we can get the same amount of work done by using less energy. It covers efficient cars on the roads, efficient ships in the waters, improved industrial practices, better building insulation and a host of other technologies. Since saving energy and saving money often amount to the same thing, energy efficiency initiative is highly profitable and can be a great contributor to the climate change issue. Energy efficiency often has multiple positive effects. As a simple example, an energy saving electric lamp gives more light by consuming less electrical energy than traditional lightbulbs. Compared to traditional incandescent, energy-efficient lightbulbs such as halogen incandescent, compact fluorescent lamps (CFLs) and light emitting diodes (LEDs) have many advantages such as: consume about 25%-80% less energy and can last 3 to 5 times longer.

By improving the energy efficiency of a ship, same works can be done with less energy consumption. Improvement in energy efficiency can be achieved through adoption of measures during ship design & construction in shipyard and operation of ships at sea. Some of the improvements can be done by installing retrofits to existing ships. Among the measures, few are technology-related and others are cost free improved operational practices. Both require a human intervention in terms of selecting the best measure and implementing it (Momoko Kitada & Aykut Ölçer, 2015) . For ship design measures to EEDI (Energy Efficiency Design Index); the aim of hull form optimisation is to find the best hull form which gives the least resistance through the reduction of wave-making resistance component of total resistance. In addition, viscous resistance component can be reduced through a few innovative measures, such as air lubrication or riblets (Gokcay, Insel & Odabasi, 2004). Some examples of ship design measures for EEDI reduction have given below:

Source: Bazari & Longva, 2011 and IMO MEPC 63 (2011).

For ship operation measures; trim optimisation is about finding the right trim which gives minimal resistance for the loading condition and service speed (Larsen, 2012). Weather routing is to find the most optimal route by taking environmental conditions into account, which consumes the least fuel (Dewit, 1990 and Lin, Fang & Yeung, 2013). Some examples of ship operation measures for SEEMP (Ship Energy Efficiency Management Plan) have given below:

Source: Bazari & Longva, 2011 and IMO MEPC 63 (2011).

According to Kitada and Olcer (2015), selecting the best option from the available technological or operational energy efficiency measures, is the first challenge for the naval architects or ship designer while they design & construct the ship and for the onboard crew while the operate the ship. The naval architect or the designer makes many decisions during the ship design & construction period in shipyard such as selecting the most efficient main engine or the most optimised hull form which affect the safety and energy efficiency performance of the ship. On the other hand, onboard crew implement different operational measures such as trim & ballast water optimization, slow steaming or weather routing & optimized voyage planning while they operate the ship at sea. Therefore right decisions by either ship designer or ship’s operator are very crucial for implementing energy efficiency measures.

The decision makers are usually required to select the best from the available options which might be assessed with regards to some criteria. For example, for selecting a main engine during ship design, the criteria which can be considered  would be multiple criteria in nature in which cost, specific fuel consumption, power & capacity ratio requirement, capability of NOx control and weight are taken into consideration. The workers (Ship designer or ship crew) or decision makers (the shipowners) might have different preferences and perceptions against alternatives and criteria. Here, understanding the importance of criteria, might be as important as preferences. The decision makers might not have a full picture for the assessment of available alternatives. A decision maker might be biased towards safety rather than energy efficiency when high cost stands with energy efficiency. Under these circumstances, making the right or optimal decisions is not an easy task, which might possibly lead to less optimal decisions in terms of less energy efficient designs or operations. The optimality of the decisions are eminently depend on the quality of the input data in the form of assessments, preferences and perceptions, weighting of the criteria and data type (Olcer and Ballini, 2015). So, the barriers for adoption of energy efficiency measures can be the lack of knowledge & pertinent training to the decision makers for assessment of available measures in the market.

Shipping industry is a business organisation, consists of number of people with different responsibilities where the shipowners or the shipmanagers are the leaders and the ship operators or ship crew are the followers. According to the Max Weber, the organisation is as hierarchy which maintain the relationship between superiors and subordinates (Weber, 1968). In such hierarchical organisations, decisions to adopt energy efficiency measures are not necessarily made by the ship operators who often reserve the best knowledge about ship operations. On the other hand, ship owners or ship managers without technical background may not have the realization of benefits for adopting new technology measures. An organisational gap between ship managers and ship operators may cause a hindrance to the process of implementation due to the lack of communication and understanding between them. So, structural gap in shipping companies is one of the barriers for adoption of energy efficiency measures.

It was proved by many research & experiments that the shipping industry could achieve energy efficiency gains through adoption of energy efficiency above mentioned design and operational measures, with considerable reductions of fuel cost and GHG emissions to air. Although the cost reducing effects of some measures and new technologies are well established, shipping companies appear reluctant to adopt them. This reluctance to adopt economically beneficial technologies is often referred to as barriers to energy efficiency (Sorrell, 2004) or the energy efficiency gap (Johnson, 2011). The barriers are considered as: information barriers, economic barriers, intra-organizational barriers, inter-organizational barriers, technological barriers, policy barriers and geographical barriers (Sepideh Jafarzadeh, 2014). On the basis of Sorrell et al.(2009), Sudhakar and Painuly (2004), Girard (2010) and Acciaro et al. (2012) this study groups highlighted that barriers to energy efficiency in shipping in some categories like safety & reliability of the measures, technical uncertainty of the new technologies, organisational behaviour of the company, market constraints and financial & economic constraints of ship’s operation. But according to Mark Jacobson and his colleagues (2015), the main barriers for getting to 100 percent clean energy are social and political, not technical or economic.

Barriers for adoption of energy efficiency in shipping in developing countries will not be same as the developed countries. Here, in South Asian countries, the shipowners mostly purchase the old second hand ships with scarp values. Then by their technical team report, if they find that the ship can be run for 5-7 years, then they run the ship in South Asian region only where the port state controls and administrations are not so well equipped and well trained for implementing the regulations. So, the shipowners or managers have the tendency to follow the regulations mostly on papers and they try to manage it. They always try to install the cheaper equipment just to follow the requirements of the regulatory body. Because, they know, maximum they’ll run the ship for 5 years and they have to spend a lot of money for maintenance of this old ship. So, for running an old ship only for 5 years, they don’t like to invest a lot of money for adoption of new technological energy efficiency measures. On the other hand, the shipowner never get the benefit of fuel saving if they run the ship by a charter party. In this case, spending money for installing the new technology of energy efficiency becomes a total loss for the shipowners. So, this a the most highlighted barriers for implementing energy efficiency measures in shipping in developing countries.

A survey was carried out in August, 2015 at a maritime institute in Malaysia on 65 seafarers who work at operational level (watch keeping engineers and officers) on-board ships in international shipping companies. The purpose of the survey was to check the awareness & knowledge of the seafarers on current MARPOL Annex VI Chapter 4: Energy Efficiency Regulations and Measures. A questionnaire was given to them where 10 questions were about current enforced regulations by IMO, 10 questions were about energy efficiency operational and innovative technology measures and 10 questions were about  planning, implementation & monitoring of energy efficiency measures in shipping companies. Their average score was 33.1%, the highest score was 46% and lowest was 6%. The result of this survey is not so satisfactory; the seafarers are not aware of current energy efficiency regulations and measures. They don’t have the required level of knowledge on this energy efficiency issue due to lack of training or information which should be provided by the shipping companies.

Not willing to set any benchmark for claimed fuel saving by the vendor of new technologies is one of the barriers. Because when the technologies are practically used onboard, the shipowners are not getting the desired benefit from it consistently. When they claim to the vendor, they explain the effect of various influential parameters such as rough weather, lack of competence of the crew, inaccuracy of the data, machinery malfunction etc. Johnson and Andersson 2011, mentioned in their papers that they have interviewed the ship owners and ship managers. The vendors of energy efficiency measures could approach them with a range of energy saving devices or technologies but without convincing measures or data available for proving actual savings. One ship owner explained that “if we add them all together, we can save more than 100%.” Insufficient information regarding the estimated savings was in this case a barrier for the ship owners in investing in a energy efficiency measure.

There could be large variations in the company between the performances of ship crew or shore staff when they are evaluated on or held accountable for the fuel efficient operation (vessel trim, speed profile, route planning, just in time etc.). It’s a matter of fact, no one in the shipping organization is truly accountable or responsible for energy costs and cost reduction. It seems that the main task of ship managers is to ensure safe and profitable operation of ships only ; energy efficiency is just an add-on just to follow the regulation. This kind of management behaviour is one of barriers for adoption of energy efficiency measures in shipping companies.

From the other field survey, random interview of 17 senior maritime professionals who work as the ship manager or technical superintendent in shipping companies, as the master & chief engineers onboard ships,  it has been found that for the misconception due to  imperfect and insufficient information, the stakeholders think the energy efficiency as a very complex matter and needs some unnecessary investment to implement the new technological measures. In many cases, the shipping companies think it as a burden! They are just trying to follow the energy efficiency regulations imposed by IMO and trying to implement some operational or new technological measures reluctantly just to safe their back from regulatory body at international ports.

Inter-organizational barriers for implementation of energy efficiency measures are need to be considered. If the stakeholders cannot expect for any benefit, they may not support for adoption of energy efficiency measures (Blumstein, 1980). . In shipping industry, usually shipowners bear the technology installation cost whereas charterers bear the fuel cost. Charterers may not be willing to share their business profit with the shipowners as they may operate ships temporarily. On the other hand, if shipowners operate ships, they may still hesitate to invest as they pass increased fuel prices to shippers through bunker adjustment factors (Fiber J, 2011).

If the energy efficiency concept could be introduced to shipowners or other stakeholders as the “fuel reduction” concept, then it could be happily accepted by them. In first stage, they may implement only the cost free or low cost operation measures as the “low hanging fruit”, then they will not experience any financial barrier to implement the energy efficiency regulations rather they will slowly get financial benefits due to fuel saving. From this initial financial benefit of fuel saving, they can set clear policies and goals for the fuel saving projects by adoption of some more operational & technological measures in second stage. They need to set a roadmap for 3-5 years and need to approach it in a step-by-step way with proper monitoring from low-hanging fruits to major capital investments for more fuel saving and more financial benefits.

 

Written by Mohammud Hanif Dewan, IEng, IMarEng, MIMarEST, MRINA

Mohammud Hanif Dewan, IEng, IMarEng, MIMarEST, MRINA

Working as the Deputy Commandant at LMTI, Liberia and Assistant Consultant at IMO. Worked as the Lecturer at ALAM Malaysia, IMA & CMC Bangladesh. Sailed as Chief Engineer on board various types of Tankers in multinational companies. Also worked as a consultant for developing and preparation of new syllabuses of marine engineering pre-sea and post-sea courses of Department of Shipping, Bangladesh as per STCW 2010 Manila Amendments. Writer of maritime articles. Researcher on Energy Efficiency in Shipping Industry, UTM, Malaysia.

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