How many tankers are EEXI compliant and ready for 2023?
In this piece we look at the EEXI compliance of the oil tanker fleet through a significant data sample of vessels in service and the carbon reduction needed depending on their design.
The questions this article aims to address are:
1. What percentage of oil tankers are EEXI compliant?
2. What is the required reduction in operational carbon intensity for noncompliant tankers to become compliant?
3. How much do the results differ by the type of technology onboard (i.e. Eco-ships vs conventional ships)?
The data sample and methodology:
As of 20th March 2022, the global oil tanker fleet in service (ULCC, VLCC, Suezmax, Aframax/LRII, Panamax, Medium, Handy, Small, Costal) stood at 7,562 tankers, representing 7.5% of the global shipping fleet.
To answer this question, we analyse a total of 4,587 tanker vessels, 61% of all oil tankers. Out of 4,587, figure 1 illustrates the percentage of different tanker sizes included in the study after cleaning the data. For example, we analyse 89% of all VLCC tankers in services and only 41% of all small tankers.
Figure 1: The sample
Before we discuss the findings, we briefly explain the applied methodology into simple steps:
1. Shipping data points (i.e. characteristics, technology, engine type, etc.) for each vessel (+200) are collected and analysed.
2. Shipping carbon intensity in grams of CO2 for one ton of cargo transported one nautical mile is calculated for each vessel using IMO EEXI formula:
For details of all components of the EEXI formula and a worked example, see IMO document; MEPC.334(76).
3. Calculated EEXI is compared against attained EEXI to indicate compliance or not for every tanker.
4. Percentages of compliance for each tanker segment are estimated.
5. The results for each tanker segment are compared against the EEDI (computed using the EEDI formula).
6. The required reduction in carbon intensity is computed for all noncompliant tankers.
7. The full sample is updated based on EEXI compliance or not and the required reduction levels.
What percentage of oil tankers are EEXI compliant?
The Energy Efficiency Existing Ship Index (EEXI) is a measure introduced by IMO to reduce GHG emissions from ships and requires all vessels to reduce operational carbon intensity to meet attained levels.
Our research shows that only 9% of the oil tanker fleet are currently EEXI compliant and ready for 2023 compared to 72% of the fleet that is currently EEDI compliant. For example, while 79% of VLCC tankers are EEDI compliant, only 7.6%, are EEXI compliant. It will be interesting to monitor the change in percentage compliance across different shipping markets over time. Figure 2 reports the results across different tanker segments.
Figure 2: EEXI vs EEDI compliance for different tanker segments.
These results trigger an interesting question:
What is the required reduction in operational carbon intensity for noncompliant tankers to become compliant?
The answer to this question is shown in Figure 3 by categorising oil tankers in groups based on the required percentage of reduction (Less than 5%, 5% to 10%, 10% to 15%, 15% to 20%, 20% to 25% and over 25%) in operational carbon intensity for EEXI compliance. While only 9% of oil tankers are EEXI compliant, 11% of oil tankers require less than 5% reduction in carbon intensity to become EEXI compliant. On the other hand, 26% of oil tankers require over 25% reduction in carbon intensity to become EEXI compliant.
Figure 3: Required % of reduction in operational carbon intensity for EEXI compliance.
These results trigger another interesting question. How does these results differ by type of technology? For example, Eco-ships vs conventional ships.
How much do the results differ by type of technology (i.e. Eco-ships vs conventional ships)?
For the shipping industry, the main focus has been on reducing the main engine specific fuel oil consumption at any load. Conventional ships used a low-speed two-stroke technology that used a chain-driven camshaft, which offered limited flexibility regarding fuel injection and exhaust valve activation, which are important factors to reduce operational carbon intensity. A new generation of electronically controlled engines was introduced to compensate for this shortfall, providing the required flexibility using electronically controlled hydraulic activation systems that form the core of the engine control system. These are referred to as Eco-ships. Figure 4 reports percentages of Eco-ships that uses electronically controlled engines, percentages of conventional ships that use camshaft-controlled engines and other types of engines across different tanker segments.
Figure 4: Proportion of eco-ships to conventional ships.
Results show that number of Eco-ships are currently higher in the VLCC trade and limited in the small tanker market. How much will this change over the next months and years?
Figure 5: A comparison of the required level of reduction in operational carbon intensity for EEXI compliance between eco-ships and conventional ships.
Using the EEXI as a benchmark tool for shipping energy efficiency, in figure 6 we report level of improvement in emission reduction for eco compared to conventional tanker vessels. Medium tankers show the highest improvement whereas small tankers the lowest.
Figure 6: Improvement in operational carbon intensity reduction by eco-ships compared to conventional ships.