climate change and energy - iema - home presentations/201704… · climate change and energy ......

Steve O’Malley Ken Walsh

Climate Change and Energy

International shipping – Key trends and developments in carbon & energy performance

1 ©2017 LEIDOS. ALL RIGHTS RESERVED.

Ships are and will continue to be significant emitters

International & domestic maritime policies

Responsible parties

Emission reductions through efficiency gains

Role of logistics planning and energy management

is a recognized global leader in solving important problems in the defense,

intelligence, homeland security, civil, and health markets. It has approximately 33,000

employees worldwide and had more than $10 billion in annual revenues in 2016.


©2017 LEIDOS. ALL RIGHTS RESERVED.

Approximately 80% of global trade by volume More than 70% of global trade by value (UNCTAD) Lowest GHG emission rates for transportation

Maritime shipping activity is already efficient…

Source: IMO GHG Study, 2009

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3.1% global CO2 emissions during the period of 2007-2012 2.6% global CO2 emissions for international alone (IMO 3rd GHG

Study 2014)

Fuel usage (bunker) represents 40-50% of vessel operating costs Reducing bunker consumption makes good business sense and

reduces emissions

European CommissionWorld shipping routes


But maritime shipping is extensive

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89,464 propelled seagoingmerchant vessels of 100 GT andabove 56-60,000 routinely engagedin international service Does not include:

• inland waterway vessels• fishing vessels• military vessels• yachts• barges• offshore fixed and mobile

platformsSource: UNCTAD secretariat, based on Clarkson Research, Seaborne Trade Monitor, 2(5), May 2015

Shipping fleets


Growth driven by global GDP• Through 2008, international trade grew

faster than global GDP• After 2008, international trade growth

has matched global GDP• Slower GDP growth expected in OECD

nations

Concommitant emissions growth from shipping• Currently 3.1% of global GHG emissions• Could rise to 13-16% as Paris Agreement

is implemented unless further action is taken to reduce shipping emissions

Source: World Economic Outlook Database, October 2016


Projected Growth in Shipping

GDP projections from https://data.oecd.org/gdp/gdp-long-term-forecast.htm#indicator-chart

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https://www.imf.org/external/pubs/ft/weo/2016/02/weodata/index.aspx

https://data.oecd.org/gdp/gdp-long-term-forecast.htm

Includes domestic shipping

Excludes international shipping (maritime & aviation)• However, the International Civil Aviation Organization (ICAO) & the

International Maritime Organization (IMO) are organizations within the UnitedNations and obligated to support the Paris Climate Change Agreement


Scope of Paris Agreement

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International Maritime Policy

Requirements: • IMO (International Maritime Organization) - Member States

agree to adopt and enforce IMO rules/policies as regulations/laws

• Flag States – Registered vessels must comply with IMO/Flag State requirements (Forty percent of international vessels are flagged

under Panama, Liberia, or Marshall Islands)

• Port States – May board ships to verify IMO compliance documents issued by the Flag State and to enforce port/national requirements (which may be subject to other

international agreements, i.e. World Customs Organization )

©2017 LEIDOS. ALL RIGHTS RESERVED. 8

International Maritime Policy

Technical interpretations or standards related to rules are produced by: • Class Societies – Approve/inspect plans and vessels

For work done on behalf of Flag States, the class societies may be referred to as Recognized Organizations

• ISO (International Organization for Standardization) –Develops technical standards to support IMO rules and/or address issues raised by industry leaders

• Industry groups (i.e. SIGTTO, SGMF) – Produce guidance documents for specific industry sectors


International Versus Domestic Voyages It is the service and not the vessel size or voyage distance

USCG joc.com

Purple - International voyageGold - Domestic voyage


Domestic Maritime Policies

Vessels not engaged in international service are generally not subject to IMO requirements

National authorities regulate domestic maritime activity

Policy effectiveness varies by country

Emissions from domestic vessels are included in that nation’s GHG emissions budget



Port Operators

Land based Transporters

Responsible Parties

Beneficial Vessel Owner

Vessel Operator

Shipping Lines

IMO & Flag State

Port State & IMO

National government & Paris Agreement

Shipbuilding Vessel operations Port Land transport Cargo

Cargo OwnerBeneficial Cargo Owner*

Logistics Planner (in-house or 3rd party logistics)

* Entity that benefits from the shipment


Source: World Energy Outlook, IEA 2012

Emission Reductions Will Accompany Efficiency Gains

Likely Possible Uncertain

Sources of Efficiency Gains

Logistics planning

New technologies

Fleet management

IMO revised strategy ? ? ?

EU requirements

IMO EEDI & SEEMP

Ship design/retrofit

LNG as fuel

Reduced speed ? ? ? ? ? ? ? ?

Larger ships

Conventional engine improvements

1990 1995 2000 2005 2010 2015 2020 2025 2030 2035


Shipping Promises Many Paths to Efficiency Gains

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Conventional engine improvements (1990-2010)

Fuel Oil Consumption (grams per KWh)

Source: http://www.imo.org/en/OurWork/Environment/PollutionPrevention/AirPollution/Documents/Third%20Greenhouse%20Gas%20Study/GHG3%20Executive%20Summary%20and%20Report.pdf

• Rates of 165 g/kWh have been achieved on certain ships

Engine AgeSlow Speed

DieselMedium Speed

DieselHigh Speed

Diesel

Before 1983 205 215 225

1984 – 2000 185 195 205

Post 2001 175 185 195


Source:http://shipandbunker.com/news/world/221518-wartsila-engine-breaks-efficiency-world-record

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http://www.imo.org/en/OurWork/Environment/PollutionPrevention/AirPollution/Documents/Third Greenhouse Gas Study/GHG3 Executive Summary and Report.pdf

http://shipandbunker.com/news/world/221518-wartsila-engine-breaks-efficiency-world-record

Larger ships (1995 – 2015)

ABS Ship Energy Efficiency Measures Advisory


Fuel savings• For containerships, increasing

size from 4,500 TEU to 8,000 TEU reduces fuel consumption rate per tonne-nm ≈25%

• Increasing from 8,000 to 12,500 TEU reduces consumption rate per tonne-nm ≈10%

Capital Costs• Increasing size from 4,500 TEU

to 8,000 TEU reduces construction cost per TEU ≈15%

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Reducing speeds (2007- 2025?)

“Reducing the nominal ship speed from 27 to 22 knots

(-19%) will reduce the engine power to 42% of its

nominal output. This results in an hourly main engine

fuel oil savings of approximately 58%.

“A further reduction down to 18 knots could save 75% of

the fuel. The reduced speed however results in a longer

voyage time; therefore the fuel savings per roundtrip (for

example Asia Europe-Asia) are reduced by 45% at 22

knots, or 59% at 18 knots. These are calculated values,

and the actual values depend also on a number of

external factors, such as the loaded cargo, vessel trim,

weather conditions, and so on.”

An example of the results of slow speed steaming

provided by Wärtsilä

U.S. Energy Information AdministrationSource: ABS Ship Energy Efficiency Measures Advisory


• Fuel consumption reduced 12-15% when large containership reduces speed by 1 knot

• Fuel consumption reduced 17-22% when oil tanker reduces speed by 1 knot

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Photo: JAXPORT Marine Unit via NASSCO

Liquefied Natural Gas (LNG) as a fuel (2005 – onward)

• Many reported GHG emission rates Well-to-wake Tank-to-wake Methane slip

• Multiple ship types LNG-fired engines Dual-fuel engines LNG-ready

• Fuel choice depends:• on fuel prices• on SO2/NOx

emission limits

Ship design/retrofit (2010 – 2025)

• Wake equalizing and flow separation alleviating devices

• Pre-swirl devices• Post-swirl devices• High-efficiency propellers• Podded & azimuthing propulsion

• Hull optimization

• Cold ironing

ABS


IMO: Energy Efficiency Design Index (EEDI)Ship Energy Efficiency Management Plan (SEEMP)

(2013 – 2030)

• EEDI (grams of CO2 /tonne - nm) based on a fully loaded ship operating at 75% of engine output Most international ships built since 2013 are required to

meet an EEDI Ships built after 2024 are required to attain 30% efficiency

improvement over the 1998-2010 reference line

• Ship operators for vessels built since 2013 are required to develop a SEEMP

http://www.imo.org/en/OurWork/Environment/PollutionPrevention/AirPollution/Pages/Default.aspx


http://www.imo.org/en/OurWork/Environment/PollutionPrevention/AirPollution/Pages/Default.aspx

European Union (EU) requirements (2023 onward)

• EU Commission's 2011 White Paper on transport EU's CO2 emissions from maritime transport should be cut by 40-

50% from 2005 levels by 2050

• In 2013, the EU Commission set out a strategy to progressively integrate maritime emissions into the EU's policy for reducing domestic GHG emissions: Monitoring, reporting and verification of CO2 emissions from large

ships using EU ports GHG emission reduction targets for maritime transport sector Further measures (including market-based measures) in the

medium- to long-term

https://ec.europa.eu/clima/policies/transport/shipping_en


https://ec.europa.eu/clima/policies/transport/shipping_en

• Enact fuel record keeping in 2018, with results reported beginning in 2019

• Complete a Fourth GHG study of 2012-2019 period by Fall 2020 (this report would include 2019 fuel data reporting)

• Begin data analysis in Fall 2020• Produce a revised emission control/reduction strategy by

2023

http://www.imo.org/en/OurWork/Environment/PollutionPrevention/AirPollution/Pages/GHG-Emissions.aspx

IMO’s revised emission reduction strategy (2023 - ??)


http://www.imo.org/en/OurWork/Environment/PollutionPrevention/AirPollution/Pages/GHG-Emissions.aspx

Fleet management programs (2010 – onward)

• 08 February 2017: “Maersk Line’s reduction target is 60% less CO2 emitted percontainer moved by 2020 (2007 baseline) combined with growth in volumetransported means we can sustain our efforts at decoupling growth from resourceconsumption. By the end of 2016 Maersk Line had reduced emissions by 42% percontainer. Our Maersk-wide target is a 30% relative CO2 reduction by 2020 (2010baseline). By the end of 2016 we had achieved 25% reduction.”http://www.maersk.com/en/the-maersk-group/sustainability/our-commitment-to-reduce-co2


• 25 November 2015: “CMA CGM, a leading worldwide shipping Group, is pleased toannounce a 50% improvement in its CO2 performance for its owned fleet. Thanks to anefficient environmental policy sustained by deploying innovative solutions, this successwas accomplished in 10 years.” https://www.cma-cgm.com/news/1005/cop-21-paris-climate-conference-in-10-

years-cma-cgm-has-improved-its-carbon-performance-by-50-

• June 2015: BSR’s Clean Cargo Working Group developed a standard methodology forcredible and comparable CO2 emissions calculations and benchmarking in the OceanContainer Shipping Sector (https://www.bsr.org/en/collaboration/groups/clean-cargo-working-group)

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New technologies (2015 – onward)

• Smart ships• Air lubrication systems• Renewable energy assist• Combined cycle gas turbines• Hybrid systems • Use of alternate engine fuels• Fuel cells



In Design Phase: Combined Cycle Gas Turbine Containership

Model of the PERFECt ship (Credit: DNV GL)

GE H series power generation gas turbine in combined cycle mode: • 480-megawatt unit • rated thermal efficiency of

60%

Logistics planning (2015 onward)

• Big data to optimize ordering and distribution

• Fleet selection and negotiations

• Management of entire supply chain

Use of transport vehicles & containers efficiently

Possible use of horizontal collaboration

Efficient cargo routing to destination

Tracking of emissions across all transport modes

• Condition of service

• Default values

Overall goals trump segment goals


• SEEMP works in conjunction with organizational energy management program (EMP)

• ISO 50001 is an international organizational EMP that includes logistics (routing and cargo)

• World Trade Organization may allow compliance with ISO 50001 as a measure to avoid carbon border adjustment fees


Logistics planning through energy management

Thank you!

Contact Information: Steven O’Malley, Tele: +1 425 442 7521, email: [email protected] Walsh, Tele: +1 919 836 7579, email: [email protected]

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