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This paper details the work carried out to complete a Formal Safety Assessment (FSA) to assess the effectiveness of inert gas systems (IGS) in reducing the risk associated with cargo tank fire and explosions on chemical and oil tankers <20,000dwt. Two different IGSs are considered; N2 for chemical tankers and conventional oil burning type for oil tankers. N2 IGS is required on chemical tankers to preserve the quality of the chemicals transported on these ships. These IGS systems are evaluated with Cost Benefit Assessments (CBA) to ascertain their cost effectiveness with regards to reducing potential loss of life, potential loss of cargo, potential pollution and potential loss of property. In this respect, the Gross Cost of Averting a Fatality (GCAF) and Net Cost of Averting a Fatality (NCAF) are calculated using the standard FSA method recognized by the International Maritime Organization (IMO). Further, the Cost of Averting one Tonne of oil Spilled (CATS) (Skjong et al., 2005 & Vanem et al., 2008) is applied to understand the cost effectiveness of IGSs in preventing environmental pollution. The risk reduction is estimated from detailed considerations of the accident statistics for tankers >20,000dwt, where mandatory requirements for IGS was introduced in 1990. Comparison was made on risks resulting from accidents involving fire and/or explosion in the cargo tank of tankers of >20,000dwt for the period of 1978–1983, in which most such tankers were not provided with IGS; and for the period 1990–2005, in which all such tankers were provided with IGSs under the requirement of SOLAS Chapter II-2. The paper further assumes that tankers <20,000dwt that carry cargo with flashpoint <60°C should have IGS installed, whilst ships without IGS may continue carrying cargo with flashpoint >60°C. This way the question of requiring IGS is answered based on real risk of fire and explosion, and avoid introducing a rather arbitrary limit based on size of the ships.
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