ESI – the shipping industry standard evolves

Each of these concepts is geared toward supporting the shipping industry as it looks to reduce emissions and decarbonise in the critical years ahead. Assessing these myriad options and performing a cost-benefit analysis can feel like an overwhelming task for sustainability and operations managers.

One established service that port and shipping professionals can trust is the Environmental Ship Index (ESI). Created, designed, and implemented by ports in 2011, in co-operation with the International Association of Ports and Harbors (IAPH), ESI has become the established global standard for ports to incentivise the improvement of shipping’s environmental performance.

In fact, in 2023 ESI was recognised by the International Maritime Organization (IMO) as the standard basis for port incentives for low- and zero-carbon ships. Now, after 13 years of successful operation, ESI is set to evolve, with a revised and expanded offering that will take into account a range of potential emissions, introduce a new GHG methodology, and reward innovation and application of zero-emissions techniques on board vessels.

This development was in response to major developments in global maritime environmental regulation, which the scheme encourages vessels to exceed.

Going beyond IMO standards

ESI is a voluntary, automated and evolving environmental-scoring system for ships (Incentive Receivers), which can result in lower port dues/fees and other incentives for vessels calling at ports registered as an ESI Incentive Provider. All indexed vessels begin from a baseline of performing beyond current IMO emission standards. In its present configuration, ESI scores these vessels on their NOx and SOx emissions, rewarding reporting- and improvements over time- of energy efficiency (in terms of greenhouse gas emissions). Vessels also receive bonuses for being equipped to use onshore power supply in ports. Taking these factors into account, ESI analyses a ship’s average performance over a six-month period and produces a score out of 100.

Via a separate module, ESI Noise also scores noise emissions of vessels, directly and proportionally, and gives a fixed bonus for a noise-reduction measurement report. Participating ports are free to set a qualifying level, in terms of points, and an incentive – most frequently a reduction in port dues – that a ship owner will receive if their vessel meets, or exceeds, that benchmark.

Simple, flexible, trustworthy

ESI has been designed for optimal ease of use and effectiveness.

Once an Incentive Receiver (ship owner) or Incentive Provider (port or service provider) is enrolled within the scheme, there is no complex software to install and no expensive emission-monitoring technology to maintain.

The system is clear and simple, and it is automatically calculated and maintained.

ESI is also flexible, allowing a port to choose the qualifying level that it wishes to set for vessels and to choose the incentive – be it a reduction in port dues or preferential berthing. ESI can be instituted at any port of any size and can be applied to any type of seagoing merchant vessel.

Since 2020, ESI has been fully integrated into IAPH as a subsidiary body with its own governance structure. From 2023, all Incentive Providers that are members of the IAPH may participate in the scheme free of charge. Finally, ESI is also subject to a robust onboard data-verification programme by its administrator, with 100 verifications conducted per quarter across the fleet on a strategic, targeted basis to ensure that ESI remains fair, accurate and effective.

Meeting the decarbonisation challenge

ESI entered a new era in March 2024, with the confirmation of an expanded suite of performance modules to support ports and vessel owners on the journey to decarbonisation and lowering emissions.

Coming online in 2026, ESI’s revised and expanded offering will take into account a range of potential emissions, introduce a new GHG methodology, and reward innovation and application of zero-emissions techniques on board vessels. The decision to revise and expand ESI’s modules and formulae, and the introduction of the new GHG and innovation modules, was a result of major developments in global maritime environmental regulation, which the scheme encourages ships to exceed.

As readers will be aware, in late March, the Maritime Environment Protection Committee (MEPC 81) agreed on an illustration of a possible draft outline of an ‘IMO net-zero framework’ for cutting greenhouse gas emissions (GHG) from international shipping.

In line with these significant developments, the evolution of ESI’s main emissions module will entail a significant revision of formulae, including the introduction of the new GHG emissions calculation, with the new core module coming on line at the beginning of 2026.

The transition process to the new suite of ESI modules will take place through 2024 and 2025, ensuring that ample support and time is available. While better aligning with global regulatory changes, in particular at the IMO and EU, in its revised format ESI will remain consistent with the approach with which Incentive Providers and Incentive Receivers are familiar. In that respect, the last word should be left to a fleet manager at one of the largest Incentive Receivers enrolled in ESI – which also happens to be one of the largest container shipping companies in the world.

‘We have grown together,’ he said, reflecting on an era of mutual development. ‘We are in the ESI program because we want to be part of the culture – the culture of saving the environment, the culture of reducing emissions.’

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