Digitalization In Shipping In Lieu of Upcoming IMO DCS

& EU-MRV Regulations for Transformation In Maritime

Industry

SUBMITTED BY –
Sohan Mishra
SAP – 500058070
Enrollment No.- R310217003
MBA PORT & SHIPPING MANAGEMENT
SCHOOL OF BUSINESS (SOB)
UPES,DEHRADUN

MENTOR SIGNATURE

STUDENT SIGNATURE

1
 DECLARATION

I certify that all the material in this dissertation that is not my own work has been identified,
and that no material is included for which a degree has previously been conferred on me.

The contents of this dissertation reflect my own personal views and are not necessarily
endorsed by the University.

Signature of the student

Sohan Mishra
SAP – 500058070
Enrollment No.- R310217003
MBA PORT & SHIPPING MANAGEMENT
SCHOOL OF BUSINESS(SOB)
UPES,DEHRADUN.

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 ACKNOWLEDGEMENT

I am sincerely thankful to all the associates who helped me complete this dissertation. Although
they are too many to mention, I would like to express some of my humble appreciations here.

I am deeply appreciative to faculties and staffs of the University of Petroleum & Energy
Studies. Especially I wish to offer my profound thanks to Captain Ashok Lakhera. He has been of
constant support with helpful comments and kindly shared his knowledge and experience with me.
Every single discussion with him was fruitful for me and strongly propelled my work forward. I am
also thankful to Research Associate Vikas Sengar for his constant help all through my MBA studies
& also for this dissertation.

My experience at Scorpio Tankers and present firm Transworld Group has been enriching. At
Scorpio with team led by Atishay Shaman and colleagues, they have been ever so helpful all the
while. I have been able to learn smoothly and this in turn helped me to develop my quest of analytical
research and understanding, which would not have seen the light of the day without their help and
guidance.

At Transworld I was able to understand the industry compliance requirements at the HSEQ
Department as I worked through the IMO DCS & EU MRV Compliance for various Classification
Societies with Captain Pawan Kumar. His constant support and team work has been productive in
meeting crucial deadlines.

I am extremely grateful to Dr Ugur Guven for providing me with the golden opportunity of
visiting University of Alberta on MBA Exchange Scholarship which enriched my learning with
multiple research projects in a short span of four months. The steep learning lesson has groomed me
professionally and will stay with me forever.

Last and foremost, I would like to thank my beloved parents and brother . Every time I talk with
them, they give me peace of mind. My partner Purva has been a constant and these achievements
have come true with all their love and support.

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 ABSTRACT

Title of Dissertation:Digitalization In Shipping In Lieu of Upcoming IMO Regulations for

Transformation in Maritime Industry

Degree : MBA – Port And Shipping Management

This thesis aims to understand the motives behind digital transformation strategies in the Maritime
Industry. The thesis has been built around key concepts identified applicable to the topic of research.
Followed by reviewing the current maritime transport sector through an industry analysis. The research
then aims to understand the trends, developments along with the structure of a specified IMO regulation
to understand the motives behind digital transformation

The aim is to study of big data for the use in the maritime industry. Today’s society is information-
intensive. The term “big data” is becoming more common. In fact, some maritime companies and
institutions have already been trying to utilize big data for enhancing maritime safety and environmental
protection along with operational performance optimization. In order to promote this trend, the
dissertation tries to identify common and important developments for the transformation in shipping in
terms of the utilization of big data and propose corresponding solutions.

First, by reviewing the definitions of big data, three major features are identified. Big data takes
electronic form, is derived through various sensors, and has difficulties in treatment. In terms of
difficulty, there are four aspects, which are volume, velocity, variety and veracity. Noting these features,
the scope of the dissertation is set as electronic voyage-related data derived on board ships. It is clarified
that the major features of big data is applicable to such data.

Second, examples of regulatory institutions/framework related to upcoming & new IMO

regulations are studied. As such institutions, DNV-GL, IRS and e-navigation framework in the IMO are
chosen. Consequently, the operational performance of Vessel wrt Fuel Consumption are assessed and
further optimization is carried out for increasing vessel efficiency.

Third, possible solutions for identified categories of problem are discussed and proposed.
Regarding sound competitive conditions, instructions on rights and responsibilities of treating big data
should be provided. As regards human resources, governments are expected to show its strategy on
nurturing experts in need and promote cooperation with the academia and associated industry.
Development of technology can be underpinned by research and development aid scheme as well as
unification of the style of relevant data sets. Security issue requires well-established legislations and
secure and resilient system against cyber-attacks.

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Table of Contents

INTRODUCTION 7
Figure 1-1 Evolution of CO2 emissions and estimations of IMO (IMO, 2009) .............................................. 7
BIG DATA 9
Maritime Big Data 9
Problem Statement 13
Literature Review 14
Regulatory Progresses 14
Technological Issues 15
Research Gap 15
Research Objectives 16
Research Methodology 16
AMENDMENTS 19
MRV as a Market Based Measure for MaritimeTransport 20
The Framework and Pathways of MRV in Maritime Transport 21
Figure 3: Key dates and timeline for IMO-DCS and EU-MRV System 22
IMO- Data CollectionSystem 23
The European Union (EU)MRV 24
Comparison of Data Requirement for the IMO-DCS and EU-MRVsystem ............................26
Table 1: Comparison of IMO-DCS and EU-MRVProcess 27
Data Collection Plan or Monitoring Plan 28
Fuel Consumption Monitoring and Interpretation 28
Method-A: Bunker Delivery Note (BDN) and Periodic Stock Taking in Fuel Tanks .............29
Method-B: Regular stocktaking of bunker tanks 30
Method-C: Reading from Flowmeters 30
Annual Fuel Oil Consumption= Summation of Flowmeter reading in a calendar year .........30
Method-D: Direct Measurement from Exhaust Gas Outlet 31
Table 2: Fuel consumption monitoring methods 31
Emission Factor 32
Emission Report 32
Table 4: Standardized Data Reporting Format for DCS 32
Comparison Between SEEMP and MRV Processes on the Data Reporting .......................................... 33
Requirements 33
Table 5: Emission sources under EEOI, IMO-DCS and EU-MRV System8 33
Table 6: Comparison of SEEMP, IMO DCS and MRV data 34
Data Analysis 34
VESLINK 35
FIGURE 1 – VESLINK.1 36

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CMAP 36
FIGURE 3 – CMAP.1 37
FIGURE 4 – VESLINK.3 38
FIGURE 5 – P&L.1 39
TCP ANALYSIS 39
FIGURE 6– TCP.1 40
FIGURE 7 – TCP.2 41
Findings 44
Ship performance modelling and optimization 44
Ship operational energy efficiency measures 45
VESSEL OPTIMIZATION MEASURES 48
Speed optimization 48
Trim optimization 50
Propeller and hull maintenance monitoring 50
Figure 2-2 Variables affecting the ship performance (Pedersen & Larsen, 2009) ........................................ 50
Recommendations 51
Elimination of barriers through Data Quality Management(DQM)52
Role of stakeholders on removal of barriers for the MRV regime 52
Figure : Data flow between parties in EU-MRV process 53
The role of IMO Member States 53
Recognized Organization/ Accredited Verifier 54
The Company’s role on eliminating barriers of MRV system 55
Associated barriers to the MRV process from the Vessel’s perspective 56
Limitations 57
Table 19: Identified Barriers 57
Conclusion 58
REFERENCES 59

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 INTRODUCTION
Maritime transport, a vector of globalization, today represents a competitive mode of
transportation at a lower cost compared to other types of transportation. Allowing for economies of scale
and low cost of transportation, maritime transport has become the flag ship mode given the large
capacity it can transport over long distances with an 80% share of world commercial transit (UNCTAD,
2018).

In addition, the modernization of logistics through containerization and advanced technology

allowing direct monitoring, as well as easy routing, have contributed to the fast growth of maritime
transport. Thus, the number of tones transported by sea increased by more than 200% between 1970 and
2000 and increased by 60% between 2000 and 2013 (Vigarié, 2016).Furthermore, Vessels have evolved
and developed to fit profitability and competitiveness needs, which has resulted in building of ships with
larger sizes and higher speeds. However, place of shipping in sustainable development and the possible
alternatives to allow the evolution of the sector in respect of the environment still have to be shaped
(IMO, 2014).

Maritime transport development is happening in parallel with the increase of its CO2 emission,
which represents a negative externality that affects the entire environment. Figure1-1 shows that the
emission rate of CO2 is increasing and the estimates established by the International Maritime
Organization (IMO) are close to reality (green columns in the figure), (IMO, 2009).
The figure indicates that the current IMO studies and expected risk should be highly considered.

Figure 1-1 Evolution of CO2 emissions and estimations of IMO (IMO, 2009)

Monitoring, Reporting and Verification(MRV) is an important element for the assessment of GHG
emissions. It is necessary to understand the maritime industry’s standpoint and future trend of a GHG
emissions scenario to facilitate regulatory developments in regional and global level. MRV is mandatory
for ships of specific sizes under IMO (from1January 2019) and EU (from 1January,2018) .The
increasing GHG concentration in the atmosphere and the associated warming effects are considered as a
major cause of climate change (WMO,2013).
For international maritime transport, according to the third IMO GHG study as illustrated
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 In Figure1-2,in the absence of corrective measures, it is estimated that the rate of CO2 emissions of
the sector will increase between 150% and 250% by 2050 (IMO,2014).

As a result, GHG emissions from international shipping are receiving increasing attention, and
possible mitigation measures are being considered, both at the regulatory and sectorial levels.
During the United Nations Framework Convention on Climate Change (UNFCCC) in 1992, the
GHG emissions from all sectors were discussed and the engagement of States to reduce it was
highlighted. International shipping was assigned to the IMO as a specialized United Nations(UN)
body to regulate the GHG emissions from ships. Consequently, the IMO marked the entry into force
of Chapter IV of MARPOL Annex VI on 1January2013. This Annex represents are a turning point in
the maritime sector as it represents the first mandatory global regime for control of GHG emission
from the maritime sector. It introduced the Energy Efficiency Design Index (EEDI) as an energy
efficiency benchmark to be respected by new ships, and the Ship Energy Efficiency Management Plan
(SEEMP) to improve the operational energy efficiency of existing ships. Later in 2015,the Paris
agreement came to specify a clear and precise target to limit Climate Change effects by keeping
global warming well below 2°compared to 2008 levels, which put more pressure on the IMO to
reduce GHG emissions from ships. The Data Collection System (DCS) was then adopted to enter into
force in January 2019 as a system for recording and collecting data on the fuel consumption of ships
engaged in international voyages, which is proportional to their GHG emissions. The data collected
will provide a solid basis to decide on additional regulations that will complement or amend the
regulations already adopted by IMO on its way toward environmentally sound maritime transport
(IMO, 2016).In addition, the IMO recently adopted a new strategy specifying its commitment to
reducing GHG emissions from international shipping by at least 50% by 2050 compared to 2008.
To sum up, in view of environmental degradation, maritime regulation is moving toward the
development of strict measures to improve the ships’ energy efficiency. The higher authorities in the
maritime community and the leaders in the shipping industry are now focusing on the development of
measures favorable to both, the economies and the environment. Therefore, shipping companies are
under increasing regulatory pressure, requiring them to adopt appropriate solutions that achieve an
economic objective in response to the rising cost of fuel and especially to the international regulation.

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 BIG DATA

Data explosion

Today’s society is an information-intensive society. Throughout our lives, we are creating,

receiving and utilizing all sorts of information and, in many cases, such information takes the form of
electronic data. Computers and cell-phones may be the most familiar and common examples of
devices which deal with information as electronic data. Because of such devices, data is explosively
increasing. For example, through twitter, which is one of the world’s famous social networking
applications, 500,000,000 posts are being made every day and 3.5 terabytes of data is created per year
(LRF, 2014). IBM states that, “every day, we create 2.5 quintillion bytes of data; so much that 90% of
the data in the world today has been created in the last two years alone” (IBM,n.d.).

Big data is a trend

Under this circumstance, the term “big data” is becoming more and more common. An example
of the definition of big data is “a massive collection of digital data that is so large and complex to
make difficult its processing by using traditional data management tools and techniques” (Catlett et
al., 2013). From this definition, it can be guessed that increasing data makes it difficult to treat such
data with existing toolsor systems and how to utilize them is an emerging issue. Despite such
difficulty, many industries consider that big data is a key for innovation and a new opportunity for
their business.
It seems safe to say that big data is one of the burning issues of business in general.

Maritime Big Data

Big data is intensively interested in land-based industries. Then, how about maritime industries?
Is there such huge data in maritime industries? Yes. For example, the accumulation of data on board
ship is found in the Voyage Data Recorder (VDR),
which is required by SOLAS (1974) and has been fitted on many vessels since 2002. In VDR,
the data such as a ship’s location, speed and bridge audio are recorded throughout voyages. It is true
that, on vessels, more and more information is derived and stored as data. However, it is not yet
common to process or analyze such data for innovative purposes. Actually, the main official purpose
of VDR is data analysis in the case of accidents. Therefore, on most ships, data is just recorded during
the voyage and, if no accident has occurred, the data will be abandoned and deleted.

If these data are effectively utilized, great innovation may be achieved in the maritime industry
as with Amazon and TOYOTA. In fact, there are some players who are trying to nurture innovation
with big data in the maritime field. For example, Class NK (2015) is trying to use big data for
machinery condition monitoring to enhance the safety of the voyage. This project is relying on

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various sensors put inside engines and data derived by them. In addition, DNV-GL (2015) has been
running a project, titled ReVolt, which aspires unmanned, zero emission short sea ships. DNV-GL
considers that utilization of big data is supposed to be a significant help in this project.

Further use of big data in maritime industry

As illustrated by examples of Class NK and DNV-GL, it is considered that utilization of big

data enables the maritime industry to drastically enhance safety of ships and environmental
protection. Thus, the trend of big data is true for the maritime industries, too. However, this trend is
not collective in maritime industries so far; players are just trying to invent their own systems or
services individually, without any unified goal or direction. Thus, it is going to be helpful for the
whole maritime industry if critical and common difficulties or bottlenecks for further innovation with
big data are identified.

Taking into account such background, this dissertation starts by reviewing the definition of big
data and figuring out its main features in general and tries to apply them for maritime affairs. It turns
out that general features of big data can be applied for data derived on board vessels. Secondly,
strategies and stances of leading institutions in terms of maritime big data, namely DNV-GL and
Lloyd’s Register Foundation, are studied and significant challenges of the further use of big data
which are common for the whole maritime society are identified. In addition, e-navigation, which is
one of the IMO’s priority issues, is also taken into consideration. Consequently, four aspects, namely
sound competitive conditions, human resources, technology and security, are identified as common
and important challenges. Finally, for those challenges, possible solutions are discussed and
recommended. In terms of sound competitive conditions, clear instructions on the rights and
responsibilities of treating big data need to be provided to industry. As regards human resources, the
government is expected to show clear strategy and cooperate with the industry and academia to
nurture experts on maritime big data, noting that the maritime industry is supposed to face shortages
of such specialists in near future. The development of technologies related to maritime big data needs
to be supported through governmental research and development aid and unification of format and
structure of relevant data items. Security of the system and data has to be ensured by establishing
corresponding legislation and developing highly secure and resilient technologies. If the solutions are
fully applied in these four aspects, the maritime industry will see significant advancement in big data
innovation.

There are three fundamental features of big data.

- Electronic form

- Derived through various sensors (which have been rapidly developed)

- Difficulty of capturing, storing, managing and analyzing

Difficulty of dealing with big data

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 With respect to difficulty in treating big data, a question is remaining. What are the
reasons for such a difficulty? In order to grasp what is big data, a breakdown in this respect is
inevitable. In 2001, Doug Laney, who is an industry analyst, introduced the notion of “3Vs” in the
field of e-commerce in order to describe the difficulty of dealing with relevant information. He stated
that the “3Vs” represent “volume”, “velocity” and “variety” (Laney, 2001). The notion of “3Vs” is
agreed and accepted by many institutions and companies today and widely regarded as the
“mainstream definition of big data” (SAS, n.d.).

Out of these “3Vs”, the first “V” means volume. This simply means the number or amount,
depth and breadth of available data. As already illustrated by the example of “2.5 quintillion bytes of
data per day”, the volume of existing data is totally different from what it used to be in the past.
Because of the volume, it may be difficult not only to detect or select a dataset which is critical for a
certain purpose out of an enormous quantity of data, but also to process and analyze it in clusters. The
second “V” stands for velocity, which means the pace of generating and using data. Laney (2001)
stated that “point-of-interaction speed and, consequently, the pace data used to support interaction and
generated by interaction” has been increased. This aspect seems to matter especially for the
transportation industries. As introduced in the example of TOYOTA, it is necessary in this sector to
immediately receive and process the data and extract proper outputs in real-time to support the
transportation which is going on. Thus, the aspect of velocity is certainly important. The third “V” is
variety. There are “incompatible data formats, non-aligned data structures, and inconsistent data
semantics” (Laney, 2001) and if the data is given in various formats, it is going to be difficult to
observe and treat such data in a unified manner. In addition to these three “V”s, a fourth “V” has been
recognized recently; it is “veracity”. According to DNV-GL (2014), the element of “veracity” was
introduced by IBM as an issue of trustworthiness of data. This sounds rational because the more
amount of data increases, the more attention people have to pay on whether such data is reliable.
These four “V”s are finely summarized by IBM (n.d.) with plain interpretations. The essence of IBM's
summary is shown in Figure 1.

Important features of big data

In this sub-chapter, as a general consideration of big data, three important features are
identified. Big data takes the form of electronic information, it is derived through various sensors, and
there are difficulties of capturing, storing, managing and analyzing it. With respect to difficulties, it is
commonly considered that there are four main aspects, which are volume, velocity, variety and
veracity. These findings can be summarized as in Figure

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 2. 4 V’s -
Figure 1: Essence of “4Vs” as main difficulties of treating big data. Reprinted from The Four
V's of Big Data, by IBM, retrieved from http://www.ibmbigdatahub.com/ infographic/four-vs-big-
data

Figure 2: Overview of the important features of big data.

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 Problem Statement
The EEDI regulation has set different time phases to achieve energy efficiency targets while
building more and more energy efficient ships. The targets are increasingly strict allowing for innovation
in ship design to find solutions for compliance with the more stringent rules. On the other hand, the
SEEMP has been introduced to operate the ship in an energy efficient way by applying energy efficiency
operational measures and monitoring the effect of any changes in ship operation. While the energy
efficiency at design stage improves in parallel with technological innovations, the operational energy
efficiency improvement depends on the ship operators’ motivation to apply the operational measures in
addition to the complexity of applying these measures. Technological innovation in ship design has been
highly reliant on Artificial Intelligence (AI) for a long time to improve the hull forms and structural
arrangements (Amarel&Steinberg,1990).
Recently, the shipping industry at the operational level also started to benefit from this fast
development of Performance & optimization tools as many studies conducted by IMO working groups
have proven that CO2 emissions could significantly decrease through appropriate implementation of
operational measures (IMO, 2014).

Traditionally these measures were implemented solely through speed optimization as it is an easy
way to reduce ship fuel consumption and does not require deep knowledge of the ship operation.
However, in order to implement other energy efficiency operational measures, such as trim or route
optimization, ship operational performance changes in different voyage conditions should be deeply
examined and monitored. It is for this purpose that “Ship-specific measures have been employed since
the classical tools, using the physical relations developed at the ship design stage, are not able to
precisely describe all the operational conditions, as they are often different from the limited shipyard test
conditions.

Many studies are also currently seeking to employ AI tools to further improve ship operational
energy efficiency, which still has great potential to decrease the CO2 emissions from international
shipping (IMO, 2014). This could be achieved by using it to facilitate the implementation of the
operational energy efficiency measures through on-board instruments equipped with advanced and
effective Decision Support Systems (DSS). Such research and developments will need to analyze the
ship performance from historical operation l data and examine the available measures in order to predict
the ship performance in various conditions with the minimum possible error. Such an approach will
provide the optimal decisions to take in order to improve ship performance with a minimum risk of error.

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 Literature Review

Research on MRV is a relatively new area of study in the shipping industry and still at the
introductory phase. Only a few research studies have been conducted a study on maritime MRV
systems, therefore, the literature on maritime MRV is limited. However, available literature and
resource material have been reviewed as much as possible from multiple sources and dimensions in
the maritime industry. In addition, literature concerning MRV in other sectors were visited in order
to better understand the maritime industry for benchmarking and gap analyses. There are emerging
issues in the context of the maritime MRV process as highlighted below.

Successful MRV regimes Schakenbach, Vollaro and Forte (2012) describe the fundamentals
of effective and fruitful implementation of the MRV system and MBM such as the Cap-And-Trade
system for monitoring Acid Rain Program (ARP) and Nox Budget Trading Program (NBTP) in the
United States. The paper stresses the MRV elements which basically support and include strong
compliance, quality assurance, accuracy and completeness of data, centralized monitoring, level
playing field, and emission reduction incentives. Reviewing the successful MRV regimes could
facilitate the identification of barriers and actions towards effective elimination. Paulsen and
Johnson (2015) describe the current best practices and challenges of implementing the MRV
system in the maritime field. This paper also explains the policy makers and different stakeholder’s
roles in adopting energy efficiency practices which could also ensure effective participation in the
MRV process.

Regulatory Progresses
There are many regulatory developments for the maritime industry in the IMO and EU
regarding energy efficiency and the MRV process which are required to be visited to reveal gaps
and impeccable compliance. The IMO second and
thirdGHGstudies,2009and2014,havepresenteddetailedimagesofshippingemissions, trend and
trajectories for future scenarios. MARPOL Annex VI, Regulation22A for Data Collection System,
Resolution.MEPC278(70) for MARPOL Regulation 22A amendments, Marine Environment
Protection Committee (MEPC) guidelines of calculation of EEDI [Res. MEPC.245(66)], EEOI
(MEPC.1/Circ.684, 2009) and SEEMP
[Res.MEPC282(70)] are all sources of the regulatory directions and procedures for GHG
emission reductions. The Regulation (EU) 2015/757 of the European Parliament and of the IMO
Council of 29 April 2015, are the main guidelines for the EU-MRV as it sets the procedures for the
different stakeholders in the MRV regime for ships over 5000GT.The regulation emphasizes the
reduction of uncertainty, maintaining accuracy, removing data gaps and barriers for a robust MRV
system. In MEPC71, July 2017, various resolutions and guidelines were adopted for the MRV
system, such as guidelines for maintaining fuel consumption database, using GISIS as information
platform for the DCS, and policy on proxy for transport work.

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 Technological Issues
Fan, Yan, and Yin (2016) discusses the multisource information system for the effective
monitoring technology to allow real time seamless data collection, monitoring and identifying
potential for technological improvement for Energy efficiency. The paper illustrates how
technology could be incorporated into a vessel’s monitoring and data transmission system for
improving the management of shipboard dynamic and static data.

The effective implementation of MRV will only come true when all the data uncertainty has
been identified and resolved. Insel (2008) describes the uncertainty of speed and power
measurements which occur in changing sea states and other changes affecting the measurement
readings. As such, applying similar process for removing of data uncertainty from the MRV related
source of data should be examined to facilitate the robust, credible, accurate and reliable MRV
process.
A modern and well-equipped vessel with correct methods for data collection can only ensure
efficient, accurate and proper compliance to the regulatory requirements. Need for technological
improvement is also reflected by IMO’s2025 targets for new ships to make 30% energy efficient n
the future. The implementation of the MRV system through the IMO or EU will also boost
technological improvement in the instrumentation and data collection system. The accurate data
acquired by the new data collection system will also help IMO to develop a vision for the shipping
sector (IMO, 2017). An assessment of the technological gap, trend, development, preferences, and
procedures followed by the shipping sector is a necessary prior implementation of the new data
collection system and this is the focus of this research.

Research Gap
The introduction of new regulations in Shipping by IMO due to the climate change phenomenon to bring

15
about necessary changes in shipping requires a stringent norm to fuel consumption.
The upcoming Certificate of Compliance under IMO-DCS and EU MRV with effect from 1st Jan, 2019
with IMO 2020 ahead requires consumption of complaint fuel and monitoring and recording all fuel
related data on daily basis.
This provides us with a large data pool which was previously available but not utilized to analyze the
consumption of fuel with regards to the operational performance of the vessel.
Thus, we have utilized these data pools to evaluate the fuel consumption with regards to improving the
performance by considering an optimization measure based on the propeller & hull cleaning duration
wrt to fuel consumption.

Research Objectives
The main focus of the research is to find out the barriers and constraints of the implementation of
the MRV system in the shipping industry. In doing so, the research focuses on:
 the efficiency of the current energy efficiency regime (SEEMP and EEOI) and
gaps with the MRV system,
 the identification of barriers in different dimensions, such as policy,
technological, human factor, and maintaining data quality,
the identification and recommendation on how data accuracy and robustness can be maintained for
the effective implementation of the MRV system
This will be possible by achieving the following objectives:
Explain the crucial steps of ship performance modeling as a data science process
Use the most appropriate ship fuel consumption optimization model to make future predictions of ship
performance
Combine the optimization model with a successful evolutionary algorithm to solve the ship fuel
consumption minimization problem
Change the optimization constraints to conduct different ship voyage optimization scenarios and validate
the models effectiveness to improve the ship’s energy efficiency
Explain the applicability of the built prediction and optimization models as a DSS for ship energy
efficient operation.

Research Methodology
Primary Data Source includes the Vessel Performance & Optimization Analysis.

Real-Time Data taken from a Tanker Vessel operating World-Wide using Softwares like C-
MAP,VESLINK with weather routing softwares with IMOS.
GUI’s & Excel Formatting used for performance monitoring .

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 DATA SOURCES (SECONDARY DATA)

The study of International Convention for the Prevention of Pollution from Ships, 1973 which was
modified by the Protocol of 1978 (MARPOL 73/78), forms the base study.
Corresponding study of MARPOL Annexes along with regulatory bodies like classification
societies regulatory compliance measures regarding IMO-DCS & EU-MRV.

Describes the operational energy efficiency measures and gives an idea about their potential in
saving fuel usage and GHG emission reduction. This chapter introduces the machine learning tools and
the black box models with their application to build the ship operational performance prediction models
in addition to the optimization for energy efficient ship operation.

It merges the steps previously explained with an application of all models to the operational
historical data of a case study ship (VLCC). In this chapter, different optimization scenarios are tested to
validate the developed methodology. The results are presented with interpretation and assessment of the
developed method through the level of succession meeting the objective of the optimization scenarios.
The chapter concludes with remarks on the applicability of this DSS on-board ships.

Climate change has discernible effect on earth ecosystem and threat to human existence. Recent
studies on climate systems suggests that human elements are the cause for the climate anomaly (IPCC,
2013). The continued emission is causing irreversible change in the climate system, and the change in
global and regional climate is more significant than ever before. The IPCC fourth assessment report
(AR4) stated that 1983-2012 was the warmest 30-year period in the last 1400 years. The magnitude of
the damage can only be minimized by stricter control over Greenhouse Gas (GHG) emissions globally.
Realizing the adverse impact, global communities have initiated actions to achieve stricter control over
GHG emissions and have established policies under the United Nations (UN) and International Maritime
Organization (IMO) to retain the world’s existence for future generations. However, shipping and
aviation industry have been excluded from the Paris Agreement, because of their international nature and
being controlled by specialized body of UN (IPCC,2013).

The emission from the maritime industry is approximately 2.8% of the global annual total GHG
emission. In a Business-As-Usual (BAU) scenario the shipping emission will increase between 50% to
250% by 2050(IMO,2015).
According to STATISTA, there are more than 51,400 merchant ships (as of 1 January, 2016) are
sailing around the world, which are responsible for consuming an average 350 million tons of fuel oil per
year. The IMO Third GHG study, in 2014, suggested that the shipping industry is responsible for
emitting about 938 million tons of CO2 and 961 million tons of CO2e in ++the year 2012; this constitutes
2.1-2.2% of the world total emission. About 75% of the emission from shipping can be reduced by the
operational measures and availing existing energy efficiency improvement technologies to ships. Since
2009, IMO has developed significant energy efficiency improvement regulations towards sustainable
shipping by adopting many measures such as, SEEMP1, EEDI2,and EEOI3.Therefore,developing a global
fuel oil consumption database for the shipping industry is another significant step towards green

17
shipping.

In promoting energy efficiency in the shipping industry, IMO’s Data Collection System (DCS),
proposed on 28 October 2016 at the Marine Environment Protection Committee 70 (MEPC70), a
substantial step towards achieving green shipping which is expected to make other energy efficiency
measures more transparent, effective and measurable. Measuring is the most important activity of energy
efficiency ,if it cannot be measured, it cannot be controlled. A detailed inventory will thus allow policy
makers to determine the magnitude of pollution and pace of the decision making and adopt global
regulations regarding shipping emission. The Monitoring, Reporting and Verification (MRV)4 system is
the key element for good governance. Similarly, the MRV system is the coreof Energy Management,
without MRV other energy efficiency measures may not be effectively implemented. A system’s
performance, operational parameters, indicating measurements and status quo need to be studied,
evaluated and analyzed for a certain period of time before any policy is taken into consideration for
Energy efficiency improvement.

In the case of the European Union (EU), all transport modes, including the maritime sector, to a
certain extent emissions are measured and controlled under strict mandatory regulations and participation
in the EU climate initiative (EU-ETS). As such, the integration of MRV into EU policy to reduce
emission from the shipping industry is the

1 Shipboard Energy Efficiency Management Plan

2 Energy Efficiency Design Index
3 Energy Efficiency Operational Index
4 IMO-DCS and EU-MRV have minor differences and are considered as synonymous in this
paper. In many places, both of these systems are mentioned as MRV system as a common term in this
dissertation, otherwise, it is specifically expressed.

Primary reason for the adaptation of such a system. In the EU, maritime transportation has
increased by 48% between 1990 to 2007 (EUR-Lex, n. d.). The EU Regulation (EU) 2015/757 considers
that EEDI, EEOI and SEEMP alone may not be sufficient to reduce greenhouse gas emission, therefore,
it is essential to adopt a more stringent policy framework. In EU Regulation (EU) 2015/757 the
introduction of MRV is justified as a benchmarking tool for shipping Energy efficiency measurement. In
2030 the framework of EU (Regulation EU 2015/757) target for reducing GHG pollution from domestic
sources is to be reduced by at least 40% compared to the 1990 level. The intension of the implementation
of EU-MRV is that it could serve as a model which will facilitate the smooth global adoption of such
system.

From a shipping company’s perspective, the effective implementation of MRV not only gives

18
 competitive advantages in the market, but keeps it upfront in the race. Moreover, energy saved from
energy efficiency enhancement measures could compensate a system implementation cost. IMO adopted
EEOI and SEEMP in 2013, however some ambiguity still exists on the reporting format, the
development of a comprehensive monitoring plan and monitoring procedures for fuel consumption. The
MRV system is mandatory and will be requiring verification at each step by authorized verifiers. The
organizational capabilities such as technical, financial and human aspects to ensure the effective
implementation of such regulations is equally essential at an organizational level in any shipping
company. To bridge this gap and ensure a smooth transition from a conventional system to a modern
MRV system, research is required focusing on specific areas of concern.

TECHNICAL AND REGULATORY NEWS No. 05/2019 – Statutory

AMENDMENTS
CONV. ENTRY INTO
/ CODE REGULATION
FORCE APPLICABLE TO SUBJECT IMO RES.

MARP Annex 2018- All cargo vessels, HSC/ Final date for the plan for data collection in MEPC.278(70
OL VI, Ch.2/ Reg. 12-31 DSC and passenger the new Part II of the SEEMP to be approved. )
5.4.5 and Ch. vessels, GT >= 5000. A Confirmation of Compliance to be issued to the
4/ Reg. 22.2 ship. The first reporting period of annual fuel
(new para. 2) consumption starts 2019-01-01.

MARP Annex VI, 2019-01-01 Cargo vessels, HSC/ The Baltic Sea and the North Sea Emission MEPC.286(71
OL Reg 13 DSC and passenger vessels,keel-
Control Area (ECA) are designated as NOx Tier )
laid >= 2021-01-01. Diesel IIIemissioncontrolarea.Thenewpara.s5.4and
engines > 130kW 5.5. give exemptions for new building and
con- versions inside the ECA.

MARP Annex VI, 2019-01-01 All cargo vessels, HSC/ Bunker Delivery Note (BDN) has been MEPC.286(71
OL Reg. 18.5, Appendix DSC and passenger vessels. amended, now specifying the appropriate limit value
)
V of sulphur content according to Reg. 14.1 and 14.4, or
the purchaser's specified limit value.

19
 MARP Annex VI, 2020-03-01 All cargo vessels, HSC/ Fuel oil used or carried for use on board a MEPC.305(73)
OL Reg.14 (expected) DSC and ship shall not exceed a sulphur limit of 0,50% m/m.
passenger
vessels. NotapplicabletoshipswithThe supplement to the IAPP certificate is up- dated
scrubbers. accordingly.

MARP Annex VI, Ch. 2020-03-31 All cargo vessels, HSC/ Final date of the first fuel consumption report to MEPC.278(70)
OL 4/
Reg. 22A DSC and passenger vessels, be submitted for verification. Data as specified
(new in
reg.) & GT >= 5000. Appendix IX.
Appendix
IX (new)

MARP Annex VI, 2020-05-31 All cargo vessels, HSC/ Final date of the first issuance of the Statement MEPC.278(70)
OL Ch.2/
Reg.6 & DSC and passenger vessels, of Compliance after the annual report is
verified
Appendix X GT >= 5000. and submitted to the Administration. Validity
(new) date to be 31 May the next year.

MRV in Low-Carbon Shipping

Overview
The shipping MRV will increase the efficiency of the global maritime emissions reduction
initiatives. None of the emission reduction ideas could be effectively implemented without a MRV
system; the MRV would act as a precursor for any MBM. A clear understanding of the MRV
process is necessary for the effective implementation of the system. This chapter discusses the
entire shipping MRV process including the regulatory procedures in the IMO and EU and a
comparative study with the other existing energy efficiency measures. A discussion on the fuel
consumption monitoring methods and issues related to each method have been reviewed concisely.

MRV as a Market Based Measure for Maritime Transport

According to the MEPC 61 information paper (IMO, 2010), the Experts Group’s feasibility
study was undertaken to reduce GHG emission from ships. The study represents proposals for
different MBM’s by various countries in the meeting, such as GHG Fund for Ship, Leveraged
Incentive Scheme (part of GHG fund goes for good ships), Port states levy (award to green and
efficient ship), Ship’s Efficiency and Credit Trading, Vessel Efficiency System, Global Emission

20
Trading Scheme for international Shipping, and Emission Trading Scheme. These abatement
proposals could be effectively enforced when emissions from maritime transport is inventoried and
under the continuous monitoring regime. The stringent regulations and economic incentives on
energy efficiency are the driving forces, which will influence a company to invest in GHG
abatement technologies and achieve significant reduction of GHG in maritime transport
(IMO,2010).
These MBM’s require the benchmarking of the shipping emission with robust data and the
monitoring of emissions from the entire maritime transport sector. The need for MBM’s in the
shipping industry actually leads to further developments in the legal instruments and the adoption
of DCS by IMO.

The Framework and Pathways of MRV in Maritime Transport

Bellassen et al., (2015) provide definition for a MRV process:
“Monitoring” covers the scientific part of the MRV process. It involves getting a number for
each variable part of the equation that results in the emissions estimate. This range of direct
measurement of gas concentration using gas meters to the recording of proxies such as fuel
consumption based on the bills of a given entity.
“Reporting” covers the administrative part of the process. It involves aggregating and
recording the numbers, explaining how you came up with them in the requested format, and
communicating the results to the relevant authority such as the regulator or the top management of
the company.
“The purpose of Verification” is to detect errors resulting from either innocent mistakes or
fraudulent reporting. It is usually conducted by the party not involved in the monitoring and
reporting, who checks that these two steps were conducted in compliance with the relevant
guidelines.

21
 Figure 2: MRV System, Source: Author

The Maritime-MRV can be defined as a process of continuously measuring any fuel

consumption of ships aiming to form a centralized global database with standardized data
collection and reporting mechanisms according to a structured and verified monitoring plan
developed under the IMO guidelines.

A simplistic process flow chart of the MRV regime under IMO and EU is represented in
Figure 2 where different stake holders, such as, the vessel, verifier, administration and IMO/EU’s
relations and links on MRV process are established.

Figure 3: Key dates and timeline for IMO-DCS and EU-MRV System

In Figure 3, the key dates and timeline of IMO-DCS and the EU-MRV System are presented
which portrays the international efforts and regulatory developments in the IMO and EU.

22
 IMO- Data Collection System

The goal of the IMO-DCS is to establish a global fuel consumption database which requires a
robust uninterrupted dataflow and undisturbed link between all the stakeholders involved in the
process. Maintaining data quality and the effective participation of all stakeholders are a matter of
concern.

Figure 4: IMO-DCS, Data flow, Source: Based on Res. MEPC.278(70)

Figure4 displays the data flow between the responsible parties in the IMO-DCS. Recently,
IMO has taken numerous steps towards improving the energy efficiency of vessels which includes
SEEMP, the mandatory requirement of EEDI for new ships, the EEOI for existing ships and the
Fuel Consumption Data Collection System for ships of GRT 5000 and over. In MEPC 71, IMO
adopted the following procedures for the Fuel Consumption Data Collection System, such as
guidelines for the Administration on verification of ship fuel oil consumption data and guidelines
for the development and management of the IMO ship fuel oil consumption database which are the
latest substantial development in this regard. The platform for fuel consumption database will be
the GISIS database with
Secured access. A circular on the submission of data to the IMO data collection system of
fuel oil consumption data from a ship that is not entitled to fly the flag of a Party to MARPOL

23
Annex VI was also published in the session. Additionally, some proposals have been made for the
proxy of transport work for offshore and contracting vessels and ice class ships (IMO,2017).
Important issues regarding the data collection system were addressed by MEPC 70 in
November, 2016. The definitions and clarifications of various terms such as distance travelled, the
company, and cargo have been described in detail. The year of construction is not included to
maintain anonymity of a ship. At MEPC 70, the committee agreed that the voluntary
implementation of data collection system could be considered by a company prior to the regulation
kicking off, however, it will not be forming part of the database. The company can also start
voluntary reporting for the familiarization of staff who will take part in the collection process.

Figure 5: IMO-DCS Cycle

According to MARPOL, Annex VI, Reg.22A, the methodology for data collection should be
included in the SEEMP and verified by the Administration or Recognized Organizations (RO) on
behalf of the Administration. The above representation, in Figure 5, better displays how the whole
process of the MRV system will incessantly run in the future.

The European Union (EU)MRV

The EU MRV is the part of the Union-wide emission reduction scheme which is 40%

24
reduction of emission of 1990 levels in 2030. The EU expect that the Implementation of MRV will
cause 2% of the reduction of shipping emission in the EU region compared to the BAU scenario in
the future (EU Commission). The staged approach of the EU MRV for the future emission
abatement techniques will be subjected to various barriers and benefits on implementation.

5
Figure 6: Staged approach of EU-MRV , Adopted from Regulation (EU) 2015/757.

3 Based on Regulation EU 2015/757 of

the European Parliament of the Council of 29 April 2018.

The EU-MRV system will act as a model system for the global MRV system as companies
operating their vessel in the EU region will have to comply with the EU-MRV regulation prior to
the IMO-DCS coming into effect. Moreover, the outcome of the EU-MRV and information and
experience learnt from the EU-MRV system, establishing a CO2 emission database, will be shared
with the IMO for member states to take the necessary steps for the adoption of IMO-DCS (EUR-
Lex, n.d.).
Developing a monitoring plan verified by an accredited verifier for a MRV system is vital. It
requires a series of assessments involving a complete data collection, storage and transmission
processes. A monitoring plan is considered as a backbone of the MRV system which should be
reviewed regularly, at least once in a year (EUR-Lex, n. d.). According to the EU-MRV (EUR-Lex,
n. d.), several procedures have to be included in its Monitoring Plan, such as, the measurement of
fuel uplift and fuel in the bunker tanks, ensuring the uncertainty of fuel measurement consistent
with the requirement in the regulation and fuel suppliers accuracy standard, recording and
determining the distance travelled, cargo carried, time spent at sea and detecting surrogate data and
eliminating data gaps.

Ships over 5000 DWT arriving at, within or departing from an EU port are required to collect
data both annually and on a per voyage basis and to report CO2 emissions to the Commission. The
MRV system requires various stakeholders to participate simultaneously to contribute for an
effective MRV system. A holistic picture of the MRV process involving all stakeholder’s, and a
process flowchart of data for the EU-MRV, are presented in the Figure7.

25
 Comparison of Data Requirement for the IMO-DCS and EU-
MRV system
IMO-DCS and EU-MRV are similar in many areas, however, some differences exist
in the reporting requirements, for example level of uncertainty, average energy efficiency of
vessel and emission factor. The full comparison between the IMO-DCS and EU-MRV is
illustrated in Table 1 below.

26
Table 1: Comparison of IMO-DCS and EU-MRV Process
(Based on Appendix IX, Res. MEPC.278(70) and EU Regulation (EU)2015/757)

Type IMO-DCS EU-MRV SYSTEM

Data anonymity ensured All vessels emission data will be broadcasted
Total Fuel Consumption for all systems Total Fuel Consumption and CO2 Emitted
VARIABLE

-Aggregated CO2 and fuel consumption for all voyage, in EU,

Method for Fuel Consumption
Measurement: 3 Methods Measurement: 4 Methods
 Using Bunker Delivery Notes
(BDN) and periodic stocktaking
 Using Flowmeter(FM)
 Bunker FOT Monitoring onboard
Distance Travelled over ground
Hours underway (under own Propulsion)
Type of Fuel Used (Different fuel collected
separately)
Report End Date (dd/mm/yyyy)
Report start Date (dd/mm/yyyy)
arrival/Departure from EU port
-including laden voyage, cargo heating consumption (voluntary)
Method for Fuel Consumption
 Using Bunker Delivery Notes (BDN) and periodic stocktaking
 Using Flowmeter(FM)
 Bunker FOT Monitoring onboard
 Direct Measurement Method (From Exhaust GasUptake)
Part C:
 Emissionsource,Monitoringmethodandrelatedlevelofuncertainty
(% per monitoring method use)
Total Distance travelled (Nm) over ground.
Hours under way (Time spent at sea)
Type of Fuel Used (Different fuel collected separately), Emission Factor for
each fuel used.
Date and Time of Arrival (To be recorded for per voyage monitoring)
Date and Time of Departure (To be recorded for per voyage monitoring)
Transport work and total transport work
Average Density of cargo carried in reporting period
Average Energy efficiency1:
FC/Distance (kg/Nm), FC/Transport work, CO2/Distance, CO2/Transport
work, Average EE/Transport work, Differentiated Average EE for laden voyage (FC
and CO2 emitted-kg/T-m, gmCO2/T-m), Average EEOI (voluntary)

Rated Power Output: Ship Name/ IMO No./Port of Registry or Home port/Ship owner, Company,
 Contact person and Verifier: Name, Address and details of contact, Verifier’s
FIXED

Main Engine(KW)
 Aux. Engine(KW) Accreditation no. and Statement of Verifier

EEDI Value (If applicable) EEDI of EIV (gm-CO2/T-M)

Vessel DWT
Vessel Net Tonnage (NT), If applicable
Gross Tonnage (GT) Port of registry or Home port
Ship Type Ship Type
IMO Number IMO Number
Ice Class of ship PC1-PC7 (if applicable) Ice Class of ship PC1-PC7 (if applicable)

27
 Data Collection Plan or Monitoring Plan

SEEMP specifies that ships of 5000GT and above need to have a Data Collection
Plan which has to be included in the SEEMP with the specific methodology used for data
collection in resolution Res.MEPC.282(70). According to resolution Res.MEPC.282(70), to
ensure no data gap the correction procedures and steps to take in case of flow meter
malfunction and addressing the missing data necessary for the Data Collection Plan. The
MARPOL Annex VI Regulation 22A suggests that the data needs to be submitted
electronically in prescribed the format. Some regulatory ambiguities have been defined in
the regulations 22A, MARPOL Annex VI and EC Reg. (EU) 2015/757, such as, Port of
call, Distance travelled, Hours underway and Voyage. Port of call is where ship stops6 for
loading or unloading cargo and/or embarking/disembarking passengers. Distance travelled,
while the ship is underway7 using its own power, should be calculated as “Distance over
ground” (MARPOL Annex VI, Reg.2). Hours underway should be calculated while the ship
is using its own propulsion. Voyage is for the purpose of loading or unloading cargo and/or
embarking and/or disembarking passengers between the port of calls.

Fuel Consumption Monitoring and Interpretation

Each type of fuel consumption must be calculated separately and all the inventory is
to be recorded. The consistency, accuracy, completeness and transparency of the fuel
consumption monitoring methods should be maintained throughout the process. The
company may select different types of fuel consumption monitoring methods, however,
detailed procedures, fuel systems of various use and the responsibilities of each person
involved in the process must be described in detail in the SEEMP or MP wherever it is
applicable (Res.MEPC.282(70)). Any change must be reflected in the plan and notified to
the Administration or verifier if the plan is reviewed. The SEEMP should be reviewed on a
regular basis and at least annually. A company may select any one of the fuel consumption
monitoring methods:
a) Method-A: Bunker Delivery Note (BDN) and Periodic stock taking in fuel tanks

28
 b) Method-B: Regular Stocktaking of the bunker tanks
c) Method-C: Reading from Flow meters
d) Method-D: Direct measurement from the exhaust gas outlet

Method-A: Bunker Delivery Note (BDN) and Periodic Stock

Taking in Fuel Tanks

Fuel consumption in a reporting period can be calculated as below: Fuel at the beginning of the
reporting period =QA
Bunkered quantity as per BDN= QB Fuel oil available at the end of reporting period =QE
Debunker quantity of fuel=QD
So, Fuel Consumption for the reporting period, FC= (QA+ QB)- (QE+ QD)
The annual fuel consumption to be determined in the same method as described in the IMO
Data Collection Plan according to the guideline of Res MEPC.282(70). The De-bunkered quantity
has to be based on the Oil Record Book. The FO quantity in BDN has been considered to take into
account the calculation in conjunction with periodic stocktaking in the fuel tanks. According to
MARPOL Annex VI, BDN has to be kept on board for three years after the delivery of fuel. Some
may consider his process can be easily complied with. However, the error in fuel calculation will not
be entirely eliminated. In many cases, discrepancy occurs in BDN quantity and the supplied quantity
due to the short delivery to the vessel by supplier. The inaccurate and fraudulent delivery caused by
the “Cappuccino Effect” and the excessive water content in the fuel which vaporizes and reduces the
quantity after a while at storage. The quantity dispute may not be solved once BDN is signed by the
parties and the quantity shortage may not be reported. Vessel may try to match the quantity by
adjusting the fuel figure intentionally showing the consumption is slightly high. For this reason,
many chief engineers tend to keep an undeclared excess quantity of FO to adjust at a later time in a
similar situation. Normally, around 0.5% of water exists in the FO which is evaporated or separated
through a purifier. A small quantity of FO is lost through the FO transfer, separation and filtration
processes which cannot be counted if BDN and periodic stock taking is considered for the reporting
fuel consumption. If we consider this type of error in a global scale, it will be the equivalent to
millions of tons of FO or CO2 emission in a year. However, in

29
eliminating data gap or differences has to be recorded and supported with documentary evidence. All
losses have to be taken into consideration.

Periodic stock taking is not exactly the same as described in the Method-B, as regulation
demands for FO tanks stocktaking which needs to be taken at the beginning and at the end of the
reporting period. In the case of EU-MRV, the periodic stocktaking has to be regularly recorded and
every beginning or end of voyage and also for the entire reporting period .The error in the periodic
stock taking could be minimized, in some cases eliminated, by automated tank gauging devices fitted
in the bunker tank to obtain the readings remotely. The accuracy and reliability must be ensured by
the regular calibration of the gauge and ensuring certified equipment by the administration if fitted.
The manual dip sounding process is more accurate when the vessel is at calm weather condition with
no rolling or pitching which gives an error in reading. At sea when the vessel is in motion sometimes
erratic readings may give an inconsistency in the fuel tank gauge readings and the CO2 emission data
may be affected. Similarly, this could be applicable to the Method-B which entirely depends on the
stocktaking of the bunker tanks.

Method-B: Regular stocktaking of bunker tanks

Vessels carry out daily Fuel Oil (FO) stocktaking of the bunker tanks usually by the manual dip
sounding process or remote gauge monitoring. As discussed in section 3.2.5.1, the error in the
manual dip soundings process is larger than in the automated system if precision equipment is fitted
for the automated tank gauging system. Miscalculation, erroneous dip soundings of tanks,
misreporting, equipment with high errors and losses in the system can end up as wrong FO
Consumption. The Res MEPC.282(70) guidelines suggest to take tank reading by three methods
namely- the automated system, soundings and dip tapes and tank measuring which should take place
daily.

Method-C: Reading from Flow meters

The method is fully based on the Flow meter reading fitted in the FO supply systems of a
machinery, the accuracy of the reading depends on the error margin of the flow meter and personal or
automated recording of readings. The administration must satisfy after verification that the flow
meters are calibrated on a regular basis and specification satisfying MARPOL NOx Technical Code.
The necessary equipment’s calibration report should be available on board the vessel.

Annual Fuel Oil Consumption= Summation of Flowmeter

reading in a calendar year

30
According to Res MEPC.282(70) guidelines, other methods could be considered as backup
measurement methods in the case of the breakdown of flow meters, however, any methods
undertaken for bunker tank monitoring must be described in the SEEMP part II in detail including
the calibration method of the flowmeter stating accuracy.

Method-D: Direct Measurement from Exhaust Gas Outlet

In this method, applicable to the EU-MRV, data is obtained from the readings of the direct flow
measurement of gases in the funnel exhaust stake which is then relayed as quantity of CO2 emission
or fuel consumption as required by the operator. Many types of exhaust gas analyzers with high
precision, approved by international standards, are available in the market. In terms of the data
collection, transfer and processing of this equipment it could be considered convenient for the
vessel’s crew. However, reliability and maintenance considering the harsh marine environment could
be an issue. According to expert opinions the following can be agreed, as presented in the Table 2,
regarding the many factors of fuel consumption monitoring methods.

Table 2: Fuel consumption monitoring methods

Criteria MethodA MethodB Method C Method D

Process BDN+ Periodic stock Regular stock Flowmeters reading Exhaust gas flow
taking taking of bunker tanks measurement
Applicability IMO and EU IMO and EU IMO and EU EU
Effect of external Low Moderate Moderate Low
factors on accuracy
Obtaining reading from No To a certain extent To a certain extent Yes
remote location
Technological involvement Less involvement Moderate involvement Moderate involvement High involvement
Human interaction High involvement Moderate involvement Moderate involvement Less involvement

31
 Emission Factor
Marine fuels specifications are regulated by the ISO8217: 2017 standard as amended in 2017.
Sometimes, the emission factors for conventional factors are not unto date with the industry
trend, ISO8217: 2017 which has included properties of bio fuels blend and Distillate FAME
(DF)grades such as DFA,DFZ and DFB that contains fatty acid upto7%. With the use of more
generic values of the emission factor, this increases the uncertainty in emission measurement
calculation (Einemo, 2017). The value of the emission factor has to be taken to convert to the
CO2 emission as per IMO recommended value in the Nox Technical Code, whereas, EU-MRV
Regulation(EU) 2015/757 takes the International Panel for Climate Change (IPCC)
recommended values for the latest Emission factors.

Emission Report
The uniformed reporting can only be ensured by using the standardized template with
no alteration of the fields (IMO, 2017). The electronic transfer of data from thousands
of vessels have to be aligned and streamlined to a defined format.

Table 4: Standardized Data Reporting Format for DCS

(Source: Appendix 3: Res MEPC.282(70))
Main Propulsion
measure fueloil

LPG (Propane)

Diesel/Gas Oil
Method usedto

LPG (Butane)
(Cf: 2.750)

(Cf: 3.030)

(Cf: 3.114)

(Cf: 3.151)
Ethanol

Methan

Auxili
LNG

HFO

LFO
ol (Cf: 1.375)

ary Engine(s)
Ot

applicable(gCO2/t.nm)
(Cf: 1.913)

(Cf: 3.206)
her (…)

Power

Fuel oil consumption (t)

(rated power) (kW)8
measure FO consumption

Start date (dd/mm/yyyy)

Distance Travelled (nm)

End date (dd/mm/yyyy)

(if
Hours underway (h)

Class (if applicable)

Gross tonnage3
Power output

IMO number1
Ship type2
Method
used to

DWT5
EEDI

NT4
Ice

In 2016 in Brussels, the EC published draft annexes, pursuant to regulation (EU)

2015/757 of the European parliament and of the Council on the monitoring, reporting
and verification of carbon dioxide emissions from maritime transport consisting two
parts which are:
a) Part A (Data Identifying the ship and the company) and b) Part B (Verification)
The Particularities of the verifier, distance travelled, time spent at sea and transport
work, energy efficiency (Fuel consumption, Average energy efficiency, voluntary

32
second parameter of average, and differentiated energy efficiency for a laden
voyage).

Comparison Between SEEMP and MRV Processes on the Data

Reporting
Requirements

The SEEMP will actually set the ground for IMO-DCS to be easily implemented on
board ship. Both processes require continuous monitoring of the energy
consumption. The IMO-DCS process gives responsibility to the Administration to
verify the Monitoring Plan and ensure robust data being reported to the IMO’s fuel
consumption database for global stock taking. Additionally, the various data required
for the calculation of EEOI are similarly applicable to the data collection process.
The SEEMP and MRV processes both require dedicated responsible persons with
specific duties in the monitoring plan. In the case of SEEMP, the EEOI is used as the
primary monitoring tools where quantitative measurement for EEOI calculations is
necessary (Regulation 22A of the MARPOL, Annex VI).

In Table5 below, emission sources for monitoring fuel consumption are presented for
comparison under the SEEMP, IMO-DCS and EU-MRV system.

Table 5: Emission sources under EEOI, IMO-DCS and EU-MRV System8

33
 Table 6: Comparison of SEEMP, IMO DCS and MRV data

The SEEMP and MRV processes go hand-in-hand as the goals and a significant part of the
SEEMP coincide with the MRV process on maintaining data for fuel consumption to monitor
the EEOI.

Data Analysis

34
PROCESS DESCRIPTION

This pilot project comprises of “Vessel Performance Management” & “Vessel

Optimization Analysis”. The two of them combined together help to explore ways to
reduce fuel consumption and operational cost reduction so as to achieve greater cost
efficiency. The project objective was to collect needed data, conduct preliminary
analysis to establish trends, explore key performance indicators (KPI) to establish
baseline, and explore data products for performance management. Thus Vessel
Performance & Optimization Analysis includes improving vessel performance and
supporting efficient operation to reduce fuel consumption. Current key performance
indicators (KPIs) include fuel consumption per trip, fuel consumption per distance
travelled, fuel consumption per displacem ent distance and fuel consumption per
payload distance. The dataset includes the effect of environmental condition and
computing key performance indicators, assessing the data trends and general statistics,
and identifying data products to support performa nce management at SCORPIO.

By making use of dedicated system software like “C -MAP” and “Integrated

Maritime Operations System (IMOS)”, which are used to collect data from the
beginning of a vessel deal to the close of a voyage. It drives true integration of all the
fleet vessels of the Management – consisting of the core functions of Chartering,
Operations & Financials to advanced and specialized areas including Trading & Risk,
Bunker Procurement thus helping to monitor voyage & fleet performance, streamli ne
workflows and analyzing these datasets to identify market opportunities & maximize
profit by cost cutting as well as identifying profitable markets.

In addition to increases in speed, resistance and fuel consumption increase by

any of the following three parameters :
•Increased draft and displacement
•Worsening of weather conditions
•Worsening of hull and propeller roughness
It is therefore essential for decision making, to have better predictions of the fuel
consumption, particularly nowadays due to the diminished profit margin of the
shipping business and due to the interest in running lower emissions ships.

VESLINK
IMOS consists of VESLINK which is used as a standard reporting of all vessels
managed by Scorpio. These Veslink Forms are HTML forms th at come pre-populated
with Scorpio Group’s required fields & data selection lists. Veslink integrates vessel
reports (noon reports, arrival and departure reports, bunker reports and cargo handling
forms) with onshore commercial management systems via e -mail and allows to
maintain up to date information about the status of the vessel & cargo with ease.

35
 FIGURE 1 – VESLINK.1

FIGURE 2 – VESLINK.2

CMAP
Similarly, CMAP is an customized system software which provides a service which
can be tailored to satisfy the needs of Scorpio. It provides accurate and comprehensive

36
 information about all the fleet vessels, helps in tracking each vessel’s actual
performance against its voyage plan for each passage & can also analyze the vessels
adherence to Charter Party Agreement terms, or compare its performance to other
vessels in the pool. “Fleet Manager” is one of the three components of C -MAP’s
integrated suit.
Fleet Manager is Scorpio’s online web portal to monitor the status of the vessel
and fleet, conducts performance analysis and generates performance reports. Manual
tracking of vessel’s passage helps in getting an actual position of the vessel along its
passage which is done to check the “SEA PERFORMANCE” by data entry for
evaluation in EXCEL sheets by th e reports generated.

FIGURE 3 – CMAP.1

“Vessel and Voyage Optimization Solution (VVOS)” is another software tool that
can be used on-board the vessel as well as shore side routing service. It comprises of
proprietary weather data combined with custom-configured to compute ship
performance response models to simulate & optimize voyages & minimize fuel
consumption while respecting safe operating limits & other voyage constraints.

37
 “Ship Report XL” is C-MAP’s daily ship voyage status reporting util ity that is
fully integrated with Fleet Manager & VVOS thus providing the necessary data which
is used for monitoring, analysis and report generation compiled together.

Based on the above generated reports the Vessel Performance Team verifies the
daily noon reports, arrival departure reports for any discrepancies in fuel consumption
and compares the actual consumption with a set limit based on previous optimized
dataset. Similarly vessel speed is also pre -fixed and adhered to. These reports are
further cross checked with vessel routing and approved passage plans. Based on this
the vessel is separately evaluated in “At SEA” & “At PORT” conditions which has
different set of pre-fixed fuel limits and conditions for optimum efficiency levels. The
final “RECAP” report is generated for a 6months period to get a fair idea of actual
performance compared to last half-yearly report.

FIGURE 4 – VESLINK.3

Similarly the Vessel Operators check the bunker reports and cargo handling forms
to evaluate the vessels requirements and adherence to the set standard procedures.
Based on these the cost estimation for a given voyage is generated and this helps to

38
 make the “Performa Disbursement Account”(PDA) and the actual cost borne becomes
the “Final Disbursement Account ”(FDA). The difference in these two gives us the
variance and thus the daily “Time Charter Equivalent”(TCE) is obtained for commercial
purpose.

FIGURE 5 – P&L.1

TCP ANALYSIS
Then “Time Charter Party Analysis” is done against a given set conditions for a given
voyage for each vessel. It is done separately for “Ballast” condition & “Laden”
condition. Further more they are calculated and evaluated based on (i) Time – (a)Time
Gain (b) Time Loss & (ii) Fuel consumption – (a) Over consumption (b) Fuel savings .
Based on this a vessel owner pays or gets paid whichever is the case for the given
vessel in the pool.

39
FIGURE 6– TCP.1

40
FIGURE 7 – TCP.2

Pool Performance Assessment & Review

Similarly, the “Pool Performance Assessment & Review” is done by using the Cube Power
Formula which is based on the Speed & Consumption of the vessel comparing the good
weather condition and the overall actual performance based on all the voyages in the six -
monthly period, by taking into account the adverse weather conditions for actual
evaluation. Based on this the “cPSS” (Consumption @ Pool Service Speed) is calculated
and “Pool Points” are assigned to each vessel in the given pool consisting of similar
vessels based on age, size & class, trading route & cargo carried.

The main engine daily consumption at PSS will be calculated by means of the “Cube
Power Formula” –
C(PSS) = c(PAS) *[(PSS)^3] / [(PAS^3]
In Which -
cPSS Daily Consumption @ Pool Service Speed(13knots/hour).
cPAS Daily Consumption @ Period Average Speed

41
42
43
Findings

Ship performance modeling and optimization

In this chapter, the focus is the relationship between ship fuel consumption and the different
influential variables that describe the ship’s condition and the external conditions. The aim is to use
this relationship to optimize the ship voyage by minimizing fuel consumption. This chapter will briefly
introduce the operational energy efficiency measures and their potential to reduce ship fuel
consumption, which have been a strong motivation to use modern tools for ship performance modeling
and optimization. The chapter will then describe the usage of tools for ship performance modeling and
optimization. It will conclude with a comprehensive literature review to present different studies that

44
aimed to model, and optimize ship operational performance and the current gap in this research field.

Ship operational energy efficiency measures

Over ninety percent of global trade by volume is carried out by ships. Shipping
being the most important mode of international transportation, there is a demand for
more efficient shipping, in terms of cost, energy efficiency, environmental friendliness,
timely delivery and economies of scale all combined together to optimize shipping
operational management. This pilot project comprises of “Vessel Performance
Management” & “Vessel Optimization Analysis”. The two of them combined together
help to explore ways to reduce fuel consumption and operational cost reduction so as to
achieve greater cost efficiency.

By making use of dedicated system software like “C -MAP” and “Integrated

Maritime Operations System (IMOS)”, which are used to collect data from the beginning
of a vessel deal to the close of a voyage. It drives true integration of all the fleet vessels
of the Management – consisting of the core functions of Chartering, Operatio ns &
Financials to advanced and specialized areas including Trading & Risk, Bunker
Procurement thus helping to monitor voyage & fleet performance, streamline workflows
and analyzing these datasets to identify market opportunities & maximize profit by cost
cutting as well as identifying profitable markets.

IMOS consists of VESLINK which is used as a standard reporting of all vessels

managed by Scorpio. These Veslink Forms are HTML forms that come pre -populated
with Scorpio Group’s required fields & data sel ection lists. Veslink integrates vessel
reports (noon reports, arrival and departure reports, bunker reports and cargo handling
forms) with onshore commercial management systems via e -mail and allows to maintain
up to date information about the status of t he vessel & cargo with ease.

Similarly, CMAP is an customized system software which provides a service which

can be tailored to satisfy the needs of Scorpio. It provides accurate and comprehensive
information about all the fleet vessels, helps in trackin g each vessel’s actual performance
against its voyage plan for each passage & can also analyze the vessels adherence to
Charter Party Agreement terms, or compare its performance to other vessels in the pool.
“Fleet Manager” is one of the three components of C-MAP’s integrated suit.

Fleet Manager is Scorpio’s online web portal to monitor the status of the vessel and
fleet, conducts performance analysis and generates performance reports. Manual tracking
of vessel’s passage helps in getting an actual positi on of the vessel along its passage
which is done to check the “SEA PERFORMANCE” by data entry for evaluation in
EXCEL sheets by the reports generated.

45
 “Vessel and Voyage Optimization Solution (VVOS)” is another software tool that
can be used on-board the vessel as well as shore side routing service. It comprises of
proprietary weather data combined with custom -configured to compute ship performance
response models to simulate & optimize voyages & minimize fuel consumption while
respecting safe operating limits & other voyage constraints.

“ShipReportXL” is C-MAP’s daily ship voyage status reporting utility that is fully
integrated with Fleet Manager & VVOS thus providing the necessary data which is used
for monitoring, analysis and report generation compile d together.

Based on the above generated reports the Vessel Performance Team verifies the
daily noon reports, arrival departure reports for any discrepancies in fuel consumption
and compares the actual consumption with a set limit based on previous optimized
dataset. Similarly vessel speed is also pre -fixed and adhered to. These reports are further
cross checked with vessel routing and approved passage plans. Based on this the vessel
is separately evaluated in “At SEA” & “At PORT” conditions which ha s different set of
pre-fixed fuel limits and conditions for optimum efficiency levels. The final “RECAP”
report is generated for a 6months period to get a fair idea of actual performance
compared to last half-yearly report.

Similarly the Vessel Operators check the bunker reports and cargo handling forms
to evaluate the vessels requirements and adherence to the set standard procedures. Based
on these the cost estimation for a given voyage is generated and this helps to make the
“Performa Disbursement Account”(PDA) and the actual cost borne becomes the “Final
Disbursement Account”(FDA). The difference in these two gives us the variance and thus
the daily “Time Charter Equivalent”(TCE) is obtained for commercial purpose.

Then “Time Charter Party Analysis” is done against a given set conditions for a
given voyage for each vessel. It is done separately for “Ballast” condition & “Laden”
condition. Further more they are calculated and evaluated based on (i) Time – (a)Time
Gain (b) Time Loss & (ii) Fuel consumption – (a) Over consumption (b) Fuel savings.
Based on this a vessel owner pays or gets paid whichever is the case for the given vessel
in the pool.

Similarly, the “Pool Performance Assessment & Review” is done by using the Cube
Power Formula which is based on the Speed & Consumption of the vessel comparing the
good weather condition and the overall actual performance based on all the voyages in

46
the six-monthly period, by taking into account the adverse weather conditions for actual
evaluation. Based on this the “cPSS” (Consumption @ Pool Service Speed) is calculated
and “Pool Points” are assigned to each vessel in the given pool consisting of similar
vessels based on age, size & class, trading route & cargo carried.

The Pool Points Evaluation Process has a s et of contractual agreement between the
vessel owner with Scorpio Commercial Management which is based on Time Charter
Clauses for a minimum period of 12months.The net pool revenue and gross pool revenue
are calculated for all the vessels in the assigned p ool and based on each Vessel Pool
Points and actual operating days in the pool the revenue is shared based on their
individual performance based points system.

Based on all these parameters used, the Vessel Optimization Team further analyses
the operational data for speed and fuel optimization. It also suggests underwater hull
cleaning & propeller polishing based on long port stays (>15days), water conditions and
vessel off-hire periods. The cost optimization for bunker fuel is also analyzed based on
the database of fuel cost at different ports and using operations management tools for
planning future bunkering ports in the given routes globally.

The project objective was to collect needed data, conduct preliminary analysis to
establish trends, explore key performance indicators (KPI) to establish baseline, and
explore data products for performance management. Thus Vessel Performance &
Optimization Analysis includes improving vessel performance and supporting efficient
operation to reduce fuel consumption. Current key performance indicators (KPIs) include
fuel consumption per trip, fuel consumption per distance travelled, fuel consumption per
displacement distance and fuel consumption per payload distance. The dataset includes
the effect of environmental condition and computing key performance indicators,
assessing the data trends and general statistics, and identifying data products to support
performance management.

.. Fuel onboard ships, commonly referred to as "bunkers", has become the largest
cost item of a ship's Operational Expenses (OPEX), accounting today almost 60% of a
voyage cost, even greater than crew wages. The level of interest in designing a fuel -
efficient ship is linearly related to the fuel price. Between 1970 and 1980 fuel oil price
increased significantly (nearly ten-fold), leading to ships with high fuel consumption
being laid up. During the period 1985 –2000 prices of fuel oil fell, with research and
development on energy efficiency not receiving particular attention by the maritime
industry. However, from 2000 onwards, the crude oil cost started to climb again, which
pushed engine manufacturers, shipyards and designers to re -investigate design and
operational solutions for reduced fuel consumption and energy efficiency.

47
 Shipping is no different than other industries, and is highly affected by fuel prices.
However, there is, to a certain extent, a control on the ship’s fuel consumption by means
of technical innovation fitted or by a better ship operation such as weather routing,
trimming, slow steaming, etc.

Even though oil price decreased for a brief period of time after the 2008 recession,
today is again at record high levels, meaning that ship operators cannot ignore this
expense as in the past, or just embody it into the price of the co mmodities carried, but
there is a need to design and operate more efficient ships, consuming less fuel per
carrying capacity.

In order to set means to improve ship's fuel efficiency, it is initially required to

define the prevailing fuel consumption rate. For this purpose, the importance of carrying
out a full-scale ship performance analysis is highlighted in several publications as
offering benefits to the designers and the operators. The aim of such an analysis can, for
example, be the prediction of the required propulsion speed & efficient fuel
consumption, or monitoring of the hull resistance due to fouling. Since sensors are
already found onboard, along with equipment to transmit the information, continuous
monitoring can be achieved with an adequate a nalysis. All these along with a set of
optimum limit arrived upon by multi -dimensional analysis over a period of time leading
to continuous improvement has been the key area of this project carried upon by multiple
teams of Analyst & Operators working toge ther at Scorpio.

VESSEL OPTIMIZATION MEASURES

Operational energy efficiency measures can have a significant effect on reducing the GHG
emission from ships as they aim to reduce the consumed energy and, thus, the consumed fuel. In the
years following the oil crises, shipping companies have put in place measures to reduce their fuel
consumption, as fuel cost is a major part of the ship voyage cost. These traditional measures such as
slow streaming i.e. reducing the voyage speed significantly compared to the design speed, have proven
their effectiveness and are now back on the agenda. Thus, according to the IMO, operational energy
efficiency optimization is the main vehicle for reducing emissions.

Speed optimization

48
 One of the most applied measures was to reduce the ship speed; this parameter has the greatest
effect on ship fuel consumption, which is a cubic function of ship speed (Lindstada&Eskeland, 2015).
Therefore, reducing ship speed is an effective way to reduce fuel consumption (Wartsila, 2009). As
shown in Table 2-1, speed reduction can result in energy savings of up to 23% and decreasing the
ship’s speed by only 1kn could save more than 5% of the energy consumption.

Speed reduction Saving energy

consumption
-0.5 kn -7%
-1 kn -11%
-2 kn -17%
-3 kn -23%
Table 2-1 Reduction of consumption according to the decrease in speed (Wartsila, 2009).

As a result, sailing at the optimal speed for each ship condition is an extremely effective energy
efficiency operational measure.

49
 Trim optimization

Shipyards aim to build ships and propulsion systems with the highest possible efficiency.
However, once commercialized, these systems usually do not operate as efficiently as planned. The trim
is one of the parameters that is often badly configured while the vessel is cruising because the trim is set
during harbor time, which is different from cruising conditions considering the squat effect (Rocchi,
1994). The latter is the phenomenon of increased immersion and trim of the ship when it is cruising
compared to calm water (Varyani, 2005). It has been proven that the ship consumed energy profile can
vary significantly when changing the trim configurations (Journé,
Rijke,&Verleg,1987;Journée,2003).Optimizing the ship’s trim is one of the easiest and least expensive
energy efficiency measures that requires simple ballast distribution modification. It has been shown that
a well trimmed vessel can make important energy savings (Ziylan&Nas,2016).

Propeller and hull maintenance monitoring

This measure consists of improved hull and propeller condition management in order to maintain
smooth submerged surfaces. It allows appropriate polishing intervals and the choice of adequate
antifouling treatment in order to decrease the hull water resistance (Demirel, Turan, &Incecik, 2016).
This preventive measure can provide unto 10% improvement in hull performance compared to a fouled
hull(ABS, 2015).
Operational energy efficiency has the potential to reduce CO2 emissions from ships considerably
and the operational energy efficiency measures are not limited to the list above.

Figure 2-2 Variables affecting the ship performance (Pedersen & Larsen, 2009)

50
 Ship performance modeling usually starts with the design process, where the interaction between
the different ship systems and their interaction with the external environment are investigated and
described in one model. However, at design stage the data collection tools, such as sensors, are limited
and operational external conditions are not all available for testing (Logan, 2011). Therefore, the white
box approach, which is based on physical laws, such as the ship’s power as a function of its total
resistance and its speed, is usually the only way for technical performance modeling at design stage.
Conversely, during the operation of the ship, more and more sophisticated data collection and
storage systems based on thousands of sensors are available. This has allowed access to large datasets
from ships, which require control with modern computing tools and AI techniques to predict the ship’s
future performance from its past(Solonen,2018).Therefore, black box models such as Artificial Neural
Networks based on statistical data are currently the only approach to deal with ship operational
performance modeling.

Recommendations

Non-implementation of the data collection, monitoring and verification systems and other energy
efficiency measures are caused by the absence of robust and reliable data which are missing in the
maritime industry. The IMO-DCS and EU-MRV system would be able to bridge the gap and support the
shipping industry to become more sustainable. Adoption of the below steps could ensure effective
implementation of the MRV systems in the maritime industry-
a) Digitalizationofthelogbooksforrecordingshipsoperationalstaticanddynamic data,
b) Improvement of automation and monitoring technology (i.e. fuel metering, remote
sensing devices)
c) Adoptionofpolicyinclinedtoenhancementofenergyefficiencythroughoutthe company,
d) Adoption of stricter policy (e.g. suitable MBM’s) and compliance at the international
level by the IMO member states,
e) Elimination of repetition of same entry of data into various places (e.g. Log
book/Log abstract/Emission report/Head Office Transfer),
f) Making data publicly available with particulars of vessel and the company operating
to ensure level playing field,
g) Introducing “MRV AUDIT SCHEME” – to ensure strict compliance by removing
monitoring hindrances and confirming robustness of data,
h) Providingqualitytrainingtostaffinvolvedindatacollectionandtransformation process,
and

Above all, all-inclusive participation and commitment of leaders of the maritime industry and
policy makers could make the MRV system implemented effectively

51
 Elimination of barriers through Data Quality Management(DQM)

Data quality management (DQM) is one of the important tools for the effective
implementation of the MRV regime in the maritime industry. In terms of integrity of data,
reliability, reduction of noise, Data Quality Management (DQM) is necessary for a robust MRV
system. DQM requires eliminating the data holes and minimizing leakage. Data holes are existed
in different sensors’ intervals, manual human interference, sensor breakdowns, and etc.
(Konovessis, Thong, 2017). Importance of intake of automation is a matter of huge significance to
ensure data quality which has been identified by this research.

Within the DQM, maintaining data accuracy is of principal factors for MRV regime which is
affected by many attributes, for example, equipment used for data collection, availability of data,
method of analysis.
Measurement uncertainties can be introduced in many ways which are, a) uncertainty
introduced by sensors inaccuracy, b) through sampling process, frequency, and c) use of imperfect
information. As described in ISO 19030- 1:2016, in order to make the DQM effective, data
uncertainty needs to be done through experts’ assessment on available resources and applicability
in specific case by case basis.

Role of stakeholders on removal of barriers for the MRV regime

For the both cases, IMO-DCS and EU-MRV system, active participations of all parties are
extremely essential and all stakeholders must have uninterrupted linkage between them for a
seamless data flow. In the case of the EU, the below Figure27 illustrates data flow and the
involvement of parties in the MRV process. In this case, when regulations are set by the European
Commission (EC), all member states, authorized verifier, shipping companies and all stakeholders
in the link required to perform their parts simultaneously

52
 Figure : Data flow between parties in EU-MRV process

The role of IMO Member States

Administration plays a vital role in the MRV process, therefore, it’s role on removing
barriers is also significant. According to the IMO, administration shall ensure the data is
transferred to IMO fuel consumption database in a prescribed format developed by the IMO
within one month of issuance of the Statement of Compliance to the company (Res. MEPC.
278(70)). The company shall report to Administration/RO (Recognized Organization) the
aggregated data not more than 3months of end of the reporting period (1 January to 31
December). Moreover, the Administration should also ensure that the Data Collection Plan is
approved prior 1st January2018 (Res.MEPC.282(70)).

53
 For the EU, member states’ obligation to the MRV by implementing as below (Regulation (EU)
2015/757).
 Conducting Accreditation of the verifier,
 Inspect ships under its jurisdiction and ensure compliance,
 Ensure valid documents are carried onboard,
 Impose penalties in case of any non-compliance,
 Report to Commission if any penalties or expulsion from its port imposed any of
visiting ship and
 Technical cooperation and exchange of information with the other country.

Therefore, providing guidelines, incentives for better compliant vessels, awarding and promoting
energy efficiency enhancement drives throughout the jurisdiction of an administration can help
implementing the MRV regime.

Recognized Organization/ Accredited Verifier

The role of a Recognized Organization(RO) certified and accredited by Administration, works

under the procedures and guidelines developed by Administration for the requirement of verification and
reporting and additional inspections require by the Administration (ResolutionA739(18),MARPOL
AnnexVI), can ensure barriers related to technological, human and administration are properly dealt
with.

Figure 28: Scope of a Verifier

54
 As verifier ensures all the requirements of the MRV process under the guidelines of the
administration are met. Ensuring strict compliance to the regulations, providing expertise and advices to
the vessels, sharing knowledge with the company towards developing efficient data management system
a verifier can ensure objectives of the MRV process are achieved.

The Company’s role on eliminating barriers of MRV system

Implementation of the MRV process depends largely on policy and actions taken by a company. A
shipping company acts as a bridge between the parties for transmitting information and regulating the
whole process of the data collection system. A company plays significant role in the data collection
process which includes ensuring the ships with up-to-date monitoring plan included in the SEEMP and
verified, methodology for data collection systems are defined, collected data are reported to the
RO(Verifier)and Statement of Compliance (SOC) issued and carried onboard.
Effective eradication of the barriers by steps, such as, adoption of greener policy, embracing new
technology for data collection and transmission process, removing knowledge gaps and proper
management of resources in this regard could facilitate effective implementation of MRV and also
promote energy efficiency across fleet.

55
 Figure 29: Vessel's role on MRV System, Source: Adopted from Res. MEPC 282(70)

Associated barriers to the MRV process from the Vessel’s perspective

To carry out an assessment on prevailing methods for data monitoring and reporting,
vessel’s Engine Room Log book, Chief Engineer’s Log Abstract have been evaluated. The
SEEMP, EEDI and EEOI have been reviewed as well. The IMO-DCS and EU- MRV system are
similar and requirements of monitoring, reporting and verification are quite in line with each other
besides minor differences. Both approaches were reviewed focusing on certain criteria, such as,
literature, regulatory requirements and system elements of the MRV for identification of barriers.

56
 Limitations
Table 19: Identified Barriers

In this research, the process of identification of the barriers potentially facilitated possible
removal of the barriers and should help adoption of any other energy efficiency measure in the
future as well. Moreover, the elimination of above barriers described in Table 6 will not only
ensure better implementation of the DCS, but also can be useful for the shipping industry’s drive
to go carbon neutral.

Lack of resources in the areas, such as, technological, human and policy are considered as
barriers to the implementation of the MRV system on board ships. Many companies are reluctant
to adopt new measures related to energy efficiency onboard ships due to multiple reasons.
Sometimes, ship-owners do not find it attractive to avail such resources to be integrated in vessels
due to a lack of incentives, therefore, the industry experience resistance to change and upgrade
towards green technology. Consequently, adopting stricter regulations developed by the member
states in the IMO or in regional setting can ensure positive changes towards green technology and
achieve CO2 emission reduction in the maritime industry.

57
 Conclusion

This research has been designed to identify barriers to the implementation of the MRV
process in the shipping industry. In doing so, firstly it analyzes the existing energy efficiency
measures, documentations, and regulatory requirements for upcoming MRV regime. Finally, it
identifies specific barriers and best method of fuel consumption monitoring on board ships and
finds ways how the barriers for the MRV system could be eliminated through identification and
mitigation.

Technological development has made the IMO’s energy efficiency drive to come into
reality. From 2009 and onwards, the IMO has introduced several energy efficiency measures, i.e.
SEEMP, EEDI, EEOI, and etc. In July 2017, the IMO subcommittee meeting,MEPC71,heralded
that about 2,500 of new ships are EEDI compliant till date, which is a significant improvement in
Energy efficiency regime. However, the SEEMP and EEOI onboard ships are still considered as
less effective and decorative. The effective implementation of the MRV could be ensured by two
factors, such as bridging the gaps between energy efficiency measures and ensuring their strict
regulatory compliance.

Moreover, the better understanding of the regulatory requirements, existing energy

efficiency drives, and their effectiveness, reviewing vessels ’various technical issues and
employing scientific methods for decision-making purpose have been carried out in this research.
These will potentially expedite effective implementation of MRV System and play a significant
role in the reduction of shipping emissions.
It is estimated that the effective implementation of EU- MRV system will result in 2%
reduction of shipping emission in the EU region (EU Commission,2015).Moreover, the global
implementation of the data collection system will encourage energy efficiency enhancement
measures are adopted and the vessels will be more technologically advanced. The MRV process
in the shipping industry requires various stakeholders to act on a common platform seamlessly
and develop a global fuel consumption database for future policy making towards sustainable
shipping. The guidelines and regulations set by the IMO and EU Commission on the MRV need
to be complied and adopted in due course without leaving any shipping companies behind. It is
challenging because of diverse corporate objectives of the shipping companies whose vessels are
sailing in various parts of the world and some are eventually come and trade in EU. Therefore, a
harmonized system of the MRV is essential for effective data collection, reporting, and
verification process.

58
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