Predictive evaluation of existing ships as low emission investments

By Andreas Symeonidis,
Marketing Manager at METIS Cyberspace Technology
Andreas Symeonidis

This whitepaper was presented at The Motorship’s Propulsion & Future Fuels Conference 2021, in the session ‘Digitalisation – solutions for the 2030 and 2050 goals’.

1.  Abstract

If the International Maritime Organization aim to cut CO2 emissions from ships in half by 2050 is ambitious, its 40% reduction target for 2030 involves ships already in operation. Accordingly, ship owners should evaluate whether and where investments are required in existing assets to meet regulatory requirements.

Supported by 20 global financial institutions representing over US$150 billion in loans, the Poseidon Principles offer a lending framework to support owner alignment with IMO greenhouse gas emission goals.

METIS Cyberspace Technology recently augmented its data acquisition and reporting solution by launching shipping’s first digital tool to predict trade-offs between emissions reduction and debt servicing for existing ships under these Principles. The Microsoft Azure-powered METIS platform uses Artificial Intelligence and Machine Learning to combine real-time performance analysis with the proactive decision support to optimise ship efficiency.

This presentation will show how the METIS Predictive AER Index assesses whether ships merit further investment to keep pace with the Average Efficiency Ratio carbon intensity indicator which underpins IMO’s Energy Efficiency Index for Existing ships (EEXI), or if the owner’s better course involves changing operating profile or disposal. Calculations include a prediction of the costs of servicing debt to assess the ship’s viable lifespan and assess the likely impact of new technologies.

METIS will also offer insights into its first Predictive AER Index application, where one owner concluded that while some of its ships needed no further investment to meet IMO targets others required immediate or future action, while two should be disposed of at once.

2.  Background

The IMO, the United Nations’ specialized agency with responsibility for the safety and security of shipping and the prevention of marine and atmospheric pollution by ships, approved an Initial Strategy to reduce GHG emissions generated by global shipping activity (April 2018). This Initial Strategy defined the following main goals:

  • Cut annual greenhouse gas emissions from international shipping by at least half by 2050, compared with their level in 2008, and work towards phasing out GHG emissions from shipping entirely as soon as possible in this century. 
  • The Initial GHG Strategy envisages a reduction in carbon intensity of international shipping (to reduce CO2 emissions per transport work), as an average across international shipping, by at least 40% by 2030, pursuing efforts towards 70% by 2050, compared to 2008. 

According to the IMO, shipping currently accounts for 2.2% of global emissions while if no measure is to be adopted, emissions from shipping are expected to grow by 50-250% till 2050. While CO2 represented almost all of the industry’s GHG emissions (98%), methane (CH4) emissions from ships increased over this period (particularly over 2009–2012) due to increased activity associated with the transport of gaseous cargoes by liquefied gas tankers due to methane slip. There is potential for this trend to continue in the future if shipping moves to liquefied natural gas (LNG)-powered ships.

IMO: Cutting GHG emission from shipping – 10 years of mandatory rules

In July 2011, the first set of measures to improve the energy efficiency of new build ships was adopted. More specifically during the 62nd Meeting of the Marine Environment Protection Committee (MEPC), IMO introduced as mandatory the EEDI (Energy Efficiency Design Index) for new ships, as well as the SEEMP (Ship Energy Efficiency Management Plan) for all ships. This has been effective since the 1st of January 2013 for ships weighing 400GT.

Regulatory work to address GHG emissions from shipping has continued within the framework of the IMO Initial Strategy, notably, at the 70th, 72nd and 73rd MEPC, where the plan to develop a roadmap on reducing GHGs from ships was approved. The plans, including short-term, mid-term and long-term measures as well as subsequent programs, have been arranged aiming at cutting the carbon intensity of all ships – new build and existing ships – by at least 40% by 2030, compared to the 2008 baseline, in line with the initial strategy ambitions.

3.  Amendments to MARPOL Annex VI: finding the best way to comply

The most recent IMO step to reduce the carbon intensity of international shipping has been the adoption of the following amendments to MARPOL VI, during MEPC 76, in June 2021:

  • Implementation of specific technical measures to reduce carbon intensity, as prescribed by the new Energy Efficiency Existing Ship Index (EEXI)
  • Specification of operational carbon intensity reduction measures, as prescribed by the new operational Carbon Intensity Indicator (CII)

The new integrated approach thus includes both technical and operational measures.   

3.1 Energy Efficiency Existing Ship Index (EEXI)

It is mandatory to calculate the attained Energy Efficiency Existing Ship Index (EEXI) for all ship types of 400 GT and above. This value should not exceed the required value of EEXI, to be calculated following the guidelines of the new regulation. A final EEXI Technical file should be prepared for each vessel and submitted to Flag or RO, leading, after an onboard survey, to the issuance of a new International Energy Efficiency Certificate (IEEC). Ships should be EEXI-compliant by the first survey of the IEEC on or after January 1st, 2023.  

EEXI SERVICES needed by the international maritime industry

To ensure compliance, owners need to be served by an accurate, efficient, and automated procedure which performs the relevant calculations and produces the final EEXI Technical File. Service requirements cover:

  1. Calculation of current EEXI.
  2. Calculation of required EEXI
  3. Calculation of suggested Engine Power Limitation(EPL) / Shaft Power Limitation(SHaPoLi) to achieve the required EEXI, considering requirements for minimum propulsion power.
  4. Calculation of suggested new reference speed based on the suggested limited MCR.     
  5. Calculation of attained EEXI based on onboard EPL / SHaPoLi installation (limited MCR).  
  6. Completion of the final EEXI Technical File
  7. Preparation of EPL / SHaPoLi Onboard Management Manual (OMM).
  8. Assessment of technical measures to reduce carbon intensity:
  • Shaft Generator (PTO)
  • Hull air lubrication system  
  • Wind assisted propulsion (applicable to tanker & bulk carrier vessels)
  • Waste heat recovery
  • Evaluation of Energy Efficiency Technologies (EETs) / Feasibility Study pertinent to a particular EET or combination of EETs.
  • Specialized services as CFD calculations in the frame of speed-power curve estimation.
  • Study on the effect of propulsion power reduction on the vessel’s operation based on actual data of vessel’s speed profiles.
  • Feasibility Studies on applying EETs driven by vessel’s machineries actual performance data.  

3.2 Carbon Intensity Indicator (CII)

In shipping, carbon intensity represents the total operational emissions generated to complete one unit of transport work, which is measured in grams of CO2 per ton-nautical miles. All ships of 5,000 GT and above will be subjected to the calculation of the annual operational Carbon Intensity Indicator (CII), which will determine the required carbon intensity reduction on an annual basis.

The attained CII will be recorded in the amended Ship Energy Efficiency Management Plan (SEEMP), and must be approved by the Flag or RO. Submission of an alternative action plan will be mandatory for low-rated ships, in order to comply with the required level of carbon intensity rating.

The rating would be given on an A, B, C, D or E scale indicating a major superior, minor superior, moderate, minor inferior, or inferior performance level. Under the draft MARPOL amendments, a ship rated D for three consecutive years, or E, would have to submit a corrective action plan, to show how the required index (C or above) would be achieved. 

Stakeholders such as administrations, port authorities, financial institutions and others, are encouraged to provide incentives to ships rated as A or B.  

For the Poseidon Principles, the CII is measured using a carbon intensity measure known as Average Efficiency Ratio (AER), which is reported in unit grams of CO2 per dwt-nm (gCO2/dwt-nm). The IMO DCS enables the calculation of the AER, thus ensuring that the Poseidon Principles are consistent with the IMO’s regulations.

AER is vessel type, size, and year dependent, calculated on a yearly basis. The AER calculation factors are the following:

  • Vessel fuel oil consumption
  • Total distance traveled
  • The design deadweight tonnage

 The AER Formula:


  • Ci is the carbon emissions for voyage i computed using the fuel consumption and carbon factor of each type of fuel
  • dwt is the design deadweight of the vessel
  • Di is the distance travelled on voyage i.

In this case, CII services needed by the international maritime Industry cover:

  • Calculation of attained CII based on vessel’s authorized data.
  • Calculation of required CII. 
  • Determination of the vessel’s operational carbon intensity rating (CII rating).
  • Preparation of vessel’s new/amended SEEMP.
  • Technical support for the development and implementation of operational measures for reducing carbon intensity in non-compliant vessels. 
  • Calculation of CII and rating in real time.
  • CII related factors analysis
  • CII projection  

 All of the EEXI and CII services outlined above are offered by METIS, either directly through our online, cloud-based platform, or through cooperative arrangements with third party providers which complement our services to maximize the value we provide to customers.

4.  Alternative Fuels

The necessary reduction of all kinds of emissions requires the use of new technologies and the use of fuels based on renewable energies. Low and zero-carbon fuels will be needed to decarbonise shipping.

For different fuel options, there is a need to consider issues such as safety, regulation, pricing, infrastructural availability, lifecycle emissions, supply chain constraints, barriers to adoption and more.

We also know that the whole lifecycle needs to be looked at. The lifecycle refers to the assessment of greenhouse gas emissions from the fuel production to the ship (Well-to-Wake); from primary production to carriage of the fuel in a ship’s tank (Well-to-Tank) and from the ship’s fuel tank to the exhaust (Tank-to-Propeller or Tank-to-Wake, also known as downstream emissions).

Candidate future low-carbon and zero-carbon fuels for shipping have diverse production pathways (for example, different generations of biofuels, hydrogen-based fuels, etc.) entailing significant differences in their overall environmental footprint.

In the case of new ships, these issues can be considered at the design stage. For existing ships however, retrofit solutions are also required to ensure ‘future-proofing’.

Comprehensive conversion and optimization projects will be needed to ensure that existing energy production systems will be able to operate effectively using alternative fuels. For this purpose, multiple party collaborations will be needed between well-known system and component manufacturers.

In this context, METIS Cyberspace Technology is contributing to an EU-backed project that will test clean energy solutions on board vessels with the aim of establishing the European Union as a leader in sustainable shipping – and ultimately steer the sector towards total decarbonisation.

The ENGIMMONIA project comprises two main areas of focus: promoting the global adoption of alternative fuels – namely ammonia – in shipping to reduce the industry’s carbon footprint; and adapting clean energy technologies that are proven in terrestrial applications – such as waste-heat recovery, renewables, and energy-management systems – to the maritime sector. These solutions will be demonstrated at technology-readiness level 5 in full-scale engines (MAN) on board three vessels: an oil tanker (FAMOUS), a container ship (DANAOS) and a ferry (ANEK).

With funding from the European Union’s Horizon 2020 research and innovation program, the project is coordinated by Italian company Rina Consulting and involves 21 project partners from nine countries, including several technical universities and some key players in the shipping industry. As one such partner, METIS is tasked with developing digital services to acquire data from any instrument on board a vessel relating to operational efficiency and environmental performance; assist crew in operating machinery and vessel at optimum efficiency; and support data scientists in evaluating new technologies and fuels.

ENGIMMONIA, having officially begun in May 2021, was funded by the European Commission within the framework of Horizon 2020 research and innovation program Grant Agreement 955413 in line with the commitment to decarbonise the shipping sector to meet IMO goals.

5.  Shipping and sustainable finance

There is no doubt that the maritime sector has played a key role in enabling the growth of global trade and in global economic development. However, this has not been without consequences.

Designed to incentivize maritime decarbonisation, the Poseidon Principles, launched on the 18th of June 2019, offer a framework for financial institutions to lend in line with IMO goals in promoting responsible environmental stewardship throughout the maritime value chain. 20 institutions have signed up, representing over US$150 billion in loans – more than a third of shipping’s global financing. The principles aim to be voluntary, practical to implement, verifiable, fact-based, and effective. Additionally, they are envisaged as evolving over time following a regular review process to ensure their feasibility, effectiveness and support of the IMO’s GHG goals.

METIS Cyberspace Technology has refined its cloud-based data acquisition and ship performance reporting solution to offer shipping’s first tool to predict the trade-off between emissions reduction and debt servicing for ships financed under the Poseidon Principles.

The system allows owners to predict whether their ships would benefit most from investment, a change in operating profile or disposal in response to advancing emissions rules. The unique METIS emissions INDEX could even help owners outperforming AER seek to lower borrowing costs.

An owner facing suboptimal AER can also use the METIS INDEX to identify the impact of different shortcomings on ship performance. In its next phase METIS will add its widely used scenario-based analysis to predict the impact of individual technology upgrades.

 6. References