Lloyd's Register's Ship Energy Manager, Dr Zabi Bazari, speaking to 1st Blue Shipping Summit in Athens today, highlighted the potentials for energy saving in shipping. His main message was that despite significant energy savings that can potentially be achieved, this may not be realisable if current shipping regulatory, legal and financial frameworks are not developed along the line to support the uptake of new technologies and processes. He argued that a robust regulatory framework together with enhanced contractual arrangement, between charterers and ship owners at one side to facilitate cost-benefit sharing from energy saving operation processes, and also between technology suppliers and ship owners on risk-benefit sharing arising from energy saving technologies are not being fully utilised yet.

1. Ship Energy Management: Drivers
and complexities
Dr Zabi Bazari CEng, CEnv
Ship Energy Services
Lloyd’s Register, London, UK
Content
11 How to reduce ship fuel consumption?
22 Main drivers?
33 Complexities?
44 The way forward?
55 Concluding remarks
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2. How to reduce ship energy use / CO2 emissions?
• Energy-efficient ship design.
• Larger ships and economy of scale
• Low carbon fuel (e.g. LNG)
• Slow steam
• Technology retrofit
• Operation optimisation
• Just in time operation
• Itinerary optimisation
• Ship capacity utilisation
• Trim optimisation / weather routing / etc.
• Technical optimisation
• Hull maintenance
• Diesel engine optimisation
• Machinery usage minimisation
Drivers: Fuel costs
• High and increasing fuel
prices
• Sulphur regulations leading
to increasing use of
expensive:
• Low sulphur fuel
• Distillates 4.50
1.1.2012
1.1.2020 1.1.202
* 5*
3.50
Outside ECA-SOx
• Increased energy use due Fuel oil
sulphur % 1.7.2010
to future technologies: 1.50
1.1.2015
• SOx scrubbers 1.00
0.50 Inside ECA-SOx
0.10
• Ballast water treatment Year
* 2020 date may be deferred to 2025 depending on
• NOx reduction devices outcome of a review of fuel availability to be completed
2018
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3. Drivers: IMO GHG (energy efficiency) regulations
EEDI
Shipyard
IMO Initiatives
SEEMP
On GHG control
Ship owner /
EEOI operator
EEDI and SEEMP will become mandatory
EEOI will remain voluntary
Drivers: IMO GHG’s Market Based Measures (MBMs)
Trading
Emissions
ETS Caps
Port or flag (Emissions
states Trading System) Fuel
collect and Others Levy
control the
CO2
charges
e.g. STEEM
(Ship Traffic, Energy and Marine GHG Fund
Environmental Model)
MBMs
SECT
(Ship Efficiency LIS
Trading System) (Leveraged
VES Incentive
(Vessel Scheme)
Efficiency
System)
IMO is at early stages
of discussion on
Based on Ship Energy Efficiency
MBMs
Rewards efficient ships
3

4. 22 Complexities
Complexities: Stakeholders and responsibilities
Flag State
Concept of ‘Shipping’
Concept of ‘Industry’
Bank as
ship
Refinery Port State owner Yard as ship
Technical owner
manager
Charter Owner
Owner
Regulator
Operator – as
Charter as owner or charter
agent
Crewing
Companies
Large number of stakeholders influence ship operation
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5. Complexities: Stakeholders (IMO Guidelines on SEEMP)
Ports Ship Operator
Ship Energy
Management Cargo Owner
Stakeholders
Ship Owner Ship Charterer
More coordination between stakeholders is required for energy
efficiency
Complexities: Economics of ship operation
• Who pays for the fuel?
• Charterers
• Ship owners
• Cargo owner
• Etc.
• Who benefits from energy efficiency?
• Who pays for energy efficient technologies / operation
processes?
The financial aspects of “ship energy saving”, in terms of
saving”
cost-benefit, is very complex
cost-
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6. Complexities: Measurement, monitoring, finacial and legal
frameworks
• Fuel consumption measurement.
• Performance assessment & verification.
• Large number of energy-saving products with significant saving-
level claims.
• Lack of financial-legal frameworks to reward energy efficient
operation.
22 The way forward?
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7. Way forward: Regulatory regime
• An EEDI regulatory framework that is truly representative of
ship’s technical energy efficiency.
• Regulations on operational fuel consumption measurement,
CO2 inventory and their verification.
• Making industry pay for CO2 emissions (MBM).
Way forward: Financial and legal framework
• Upgrading of charter party contracts to enable / incentivise
energy efficient operations.
• Development of risk-sharing contracts between technology
supplier and owners for claims made for various technologies.
• Development of benefits-sharing practices on fuel savings;
between owners/managers and charterers.
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8. Conclusions
• There are a number of major drivers for ship energy efficiency.
• There are a number of major complexities within the industry that
impedes move towards more energy efficient operation.
• Solutions to these complexities will pave the way for a more
energy efficient shipping industry.
• The way forward should include:
• A more robust regulatory framework.
• A charter-party framework that rewards energy-efficient
operations.
• A financial framework that give a shared cost/benefit to
stakeholders for uptake of new technologies or new operation
processes.
Thank You
For more information, please contact:
Dr. Zabi Bazari
Ship Energy Services Manager
Environment - SMT
Lloyd’s Register
71 Fenchurch Street
London, EC3M 4BS
T +44 (0)20 7423 1756
E zabi.bazari@lr.org
w www.lr.org/marine
Services are provided by members of the Lloyd's Register Group.
For further information visit www.lr.org/entities
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