Developing a framework of benchmarking for green shipping

Abstract

Given its economies of scale, shipping is the most cost-effective mode to move cargoes across the oceans. It generates tremendous economic benefits to society. Even though shipping has been the most environmental friendly mode of transportation as per tonne-mile, it is under increasing scrutiny from societies, governments and international communities. This paper aims to look into the trend and current development in green shipping. Eventually, based on the analysis of current trend, the objective of this project is to develop a framework to benchmark green shipping across different sectors of maritime industry so that it provides a gauge for and quantitative measurement of environmental performance of maritime industry. With quantified data on green shipping, more detailed and specific rules and regulations could be developed later on to better regulate the industry and reduce its environmental impact. This paper will examine the environmental impact from shipping operation. Currently, Energy Efficiency Operation Index (EEOI) is the sole metric to measure the environmental impact in terms of greenhouse gas emission. Based on extensive literature review, this paper will propose a new model basis on current EEOI framework to better measure shipping carbon footprint. The proposed new model takes into consideration of the impact of freight and bunker cost on vessel’s fuel consumption, hence, it is called Energy Efficiency Operational Index adjusted to freight and bunker cost (EEOIF&B). The proposed model is then tested against both theoretical and real industry data, after which a conclusion is drawn.