By Wendy Laursen 2015-04-21 19:42:23
Op-Ed by Wendy Laursen
In the on-going debate about a CE Delft report on ship efficiency, the group has come out and restated its results (below).
The interpretation by the organizations that commissioned the report, Seas at Risk and Transport & Environment, was that new ships built in 2013 were on average 10 percent less fuel-efficient than those built in 1990. The sponsors say that the study shows that container ships built 30 years ago already, on average, beat the Energy Efficiency Design Index standard that IMO has set for new ships built in 2020. It also shows that bulk carriers, tankers, and container ships built in 2013 were on average 12, eight and eight percent less fuel efficient respectively than those built in 1990, a quarter of a century ago.
This sparked a response from the International Chamber of Shipping. “The Transport & Environment statement appears to confuse overall design efficiency with an approximate estimate of fuel efficiency based on generic data. Modern ships are designed for optimal efficiency which requires far less fuel to be consumed than previously. Largely as a result of fuel efficient operations, the latest IMO Green House Gas Study, published in 2014, shows that international shipping reduced its total CO2 emissions by more than 10 percent between 2007 and 2012, at a time when demand for maritime transport continued to increase.”
Rather than just a technical debate in the spirit of Mark Twain: “Lies, damned lies, and statistics”, the debate has a practical importance.
Just released on April 22 is a news story with the headline: “Banks: Vessel financing increasingly based on energy efficiency data.” The Carbon War Room announced that several leading banks in the shipping industry, including HSH Nordbank and KfW IPEX-Bank, use energy-efficiency data in making investment and financing decisions.
HSH Nordbank, KfW IPEX-Bank, and other banks surveyed by global NGO Carbon War Room (CWR) have indicated that vessel efficiency rankings—such as the A to G GHG Emissions Rating developed by independent ship vetting company RightShip and CWR—now form an important part of assessing risk and return, with inefficient vessels now representing a higher-risk investment.
Energy efficiency data is also being used in credit-approval processes for vessel purchases, loan assessments for retrofit projects, and re-sell or scrapping decisions, with banks citing efficiency as a key indicator for a vessel’s profitability.
The recent incorporation of efficiency data into financing decisions indicates that a dramatic market shift has occurred in recent years. Banks state they have seen the formation of a two-tier market comprising high- and low-efficiency vessels. Eco-efficient vessels demand a premium price at new build stage, are more likely to be chartered, maintain asset value over time and have a longer lifespan.
Who are the banks going to believe? Not, it seems, NGOs, Delft, IMO or ICS.
CE Delft’s View of their Results
CE Delft has published the study historical trends in ship design efficiency. We have noted apparently conflicting claims about the conclusions in the press. The following statement summarizes the methodology and the conclusions of our study.
CE Delft studied the development of the Estimated Index Value (EIV) of bulkers and tankers since 1960 and of container ships since 1970. The EIV formula is a simplified form of the Energy Efficiency Design Index (EEDI) that was used by the IMO to calculate the EEDI reference lines (which were set as the best fit average lines of all EIVs in the period 1999-2009).
It can therefore be considered as a simple yet accepted measure of design efficiency. We have calculated EIVs on the basis of IHS and Clarkson databases, as did the IMO.
The study shows that the EIV of new ships was on average worse than the EEDI reference line for ships built in the 1960s and 1970s, improved considerably in the 1980s and then deteriorated again.
This means that, on average, a ship built around 2010 had a design efficiency (as represented by the EIV) that was worse than a similar ship (same ship type, same size) built around 1990.
One of the main reasons why modern ships have a design efficiency that is worse than ships built around 1990 is that modern ships are, on average, fuller (more block-like). The reason for this is that when freight rates are high, it makes sense to build full ships because within draft and length constraints, they can transport more cargo than a more slender ship.
The EIV formula as established by the IMO does not take into account improvements in fuel efficiency of engines. Our data sources do not allow an evaluation of this impact. However, other sources show that the fuel efficiency of engines has improved since 1990. If one were to take this into account, the deterioration in design efficiency since 1990 would likely have been less than we reported.
Our methodology compares similar ships. We have not studied how the fleet average design efficiency has evolved, e.g. due to changes in ship size. This is especially important for container ships, the size of which has increased considerably in the past decades.
Our conclusions relate to design efficiency. We do not make claims about operational fuel efficiency.
The full report is available here.
This post was sourced from Maritime Executive: View original article here.
