New Report: Improving Vessel Efficiency Could Save $200 Billion in Bunker Costs by 2035

The New Climate Economy report says total emissions could decrease from current numbers while shipping activity doubles if the entire global shipping fleet achieves the efficiency of 2011’s industry leaders by 2035.

A major new report, The New Climate Economy, the flagship project of the Global Commission on the Economy and Climate (the Commission), says improving vessel efficiency could save $200 billion in bunker costs by 2035.

In addition, if the entire global shipping fleet achieves the efficiency of 2011's industry leaders then even if shipping activity doubles in that time, total emissions could decrease from current levels.

The report explains that the International Maritime Organization's (IMO's) Energy Efficiency Design Index (EEDI) and Ship Energy Efficiency Management Plan (SEEMP) are "expected to save an average of $200 billion in fuel costs and 330 Mt CO2 annually by 2030," with a near-term marginal cost.

However, the Commission says that these policies are not enough to slow the rapid growth in shipping emissions, which the IMO projects will rise by 50 to 250 percent from current levels by 2050.

The Commission argues that there needs to be an emissions limit set for the global shipping industry, as well as more reliable and transparent information on ship efficiency and expected gains from various operational and technological efficiency measures.

"Reliable data on operational efficiency are scarce, however, which remains a significant challenge."

While the Commission says that there are voluntary initiatives, they argue that they do not yet have full industry-wide influence, and lack a consistent and standardised methodology for evaluating ship efficiency, and urges the IMO to create a transparent global system to provide reliable data on operational efficiency.

Strong Shipping Fuel Efficiency Standards

As for a global emissions target for the maritime sector, the Commission recommends that the IMO set a limit in line with a 2°C pathway through "strong shipping fuel efficiency standards".

The commission notes that fuels costs account for about 50 percent or more of a ship's operating costs, and offers that there are several cost-effective ways to increase fuel-efficiency, such as polishing propellers more often, a method said to be capable of increasing efficiency by 4 percent.

"One company has found that a fouling-resistant hull coating applied to a bulk cargo vessel at a cost of $360,000 saved about 5,400 tonnes of fuel over nine years, a 22 percent efficiency improvement," the report noted.

"At a fuel cost of $300 per tonne, the technology would fully pay itself back in just over two years, and over $1.2 million would be accrued in net savings over nine years."

In May, the Republic of the Marshall Islands submitted a proposal to the IMO's Marine Environmental Protection Committee (MEPC) for the adoption of a global emission reduction target, but it was not accepted.

On Monday, is was reported that Geir Axel Oftedahl, Business Development Director of Hull Performance Solutions for The Jotun Group, has said that ISO 19030, expected to receive final approval next year, could reduce the world fleet's bunker bill by $30 billion per year.