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September 24, 2008

DNV says shipowners are missing out on fuel savings

Classification society DNV is urging the shipping industry to be more proactive in its efforts to reduce fuel consumption. The industry is missing out on significant savings opportunities and failing to take advantage of proven systems and routines that will help it cut carbon emissions.

DNV notes that an IMO study released earlier this year idicates that annual carbon dioxide emissions released by the global merchant fleet reached 1.12 billion tonnes in 2007, making up about 3.5 percent of total global carbon emissions. Yet too many shipowners have continued to operate "business as usual," despite the looming threat of new IMO legislation on carbon emissions and a corresponding steep rise in the cost of fuel.

According to Dr. Espen Cramer, head of DNV Maritime Solution, shipowners have long recognized the business value of reducing fuel consumption, but many have failed to implement more effective and comprehensive energy management strategies.

"The industry's piecemeal approach to reducing fuel consumption has slowed the efforts of shipowners to make a real difference," he says. "Most companies have not allocated internal resources to optimize fuel consumption, lack clear goals and ambitions, fail to communicate their efforts effectively, do not benchmark and report fuel reduction obtained, and many simply outsource the problem to ship managers rather than work with them."

In 2005 DNV adressed Energy Management as a service that provides a systematic approach to enable shipping companies to reduce annual expenditure related to fuel and improve their environmental footprint. This is achieved through improvement identification, solution development for prioritized areas, followed by implementation and monitoring of improved performance. Energy Management also facilitates clear documentation of improved environmental performance, which can deliver a competitive advantage.

"We have identified a fuel saving potential of between five and twenty percent for ships in operation, depending on present performance of the company," says Cramer. "Yet, the implementation to actually realize this saving potential remains a challenge for many shipowners and ship managers."

Through three years of experience with Energy Management, DNV has collected a number of examples of companies that have limited or no knowledge of how effective they are in energy consumption, have no comparison of consumption of individual vessels in own fleet, or fail to benchmark their progress. "We also see that many companies start with expensive, costly solutions without first identifying and implementing more cost-effective quick-win solutions." says Cramer.

To date, DNV has conducted some 20 successful projects, helping companies move forward with fuel savings in a structured and holistic context, which take into account both organizational and technological solutions.

DNV has grouped the areas where companies can save fuel into six;

  • Voyage Performance, which includes optimising voyage planning and weather routing
  • Ship Performance, which includes the condition of the hull and propeller and optimizing trim and draft
  • Bunker Management, which focuses on fuel procurement and management
  • Main and Auxiliary engine tuning and optimization
  • Energy Consumers, which includes tank cleaning, thrusters operations, incinerators, and ventilation and HVAC, and Management & Organization, which focuses on policy performance management, training and awareness, and following through on environmental issues and planning the total life-cycle of vessels.

DNV has assisted companies in different segments to improve fuel efficiency. The company found that fuel costs can account for up to 75 percent of operational costs for container ships. Working with DNV, one major Asian-based container company created fuel savings representing an annual savings of some $50 million, and CO2 emmision reduction in the area of 300 thousand tonnes annually.

While new technologies and systems are being developed, the real challenges facing shipowners cannot be measured in new technologies or training program alone.

DNV insists that shipowners must learn to think about energy consumption in a new way.

"Energy Management is not rocket science, it's change management. The companies we work with know their own ships and their own operations much better than we ever will, but where we contribute are in presenting best-industry-practice, structure and facilitate the fuel-reduction programme and ensure benefit tracking and reporting for continued improved performance," says Cramer. "But for any Energy Management program to succeed, it must involve people throughout the organization working together toward a common objective."


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