Determining a required energy efficiency design index level for new ships based on a cost-effectiveness criterion

Abstract

The maritime industry is expected to contribute to Greenhouse Gas (GHG) emission reductions, and the International Maritime Organisation (IMO) is working on possible ways of regulating shipping's GHG emissions. One possible instrument is the Energy Efficiency Design Index (EEDI). However, there is no agreement on a mandatory application or how to set the required targets. This article presents an approach where a required index level (I R) can be determined through a cost-effectiveness assessment of the available reduction measures. A decision criterion of 50 USD per tonne CO2-eq. averted is used, based on a 2°C stabilisation level target. For illustration purposes, eleven emission reduction measures are analysed for implementation on a representative ship, and the I R is reached after applying the measures fulfilling the decision criterion. Using the same principles, other regulatory requirements such as a cap on emissions from shipping, e.g. for use in a shipping emissions trading scheme, can be developed. Using a cost-effectiveness approach in setting a I R or determining a cap will avoid prescriptive regulations detailing specific measures to be implemented, and the costs imposed by new requirements may be justified on the basis of the achievable emission reductions and cross-sector potential for achieving a global reduction target.