Abstract Environmental regulations play a significant role in ship design, manufacturing, operations, and disposal. As the life cycle progresses, a ship's environmental performance can degrade if more stringent policies are implemented at a port of call or for operations on the open seas. Tightened constraints over time may increase life cycle cost due to mandated replacement and repair costs, larger insurance premiums, or less operational flexibility. Unless design and maintenance activities account for uncertainty related to the environmental policy agenda, regulation changes can present considerable economic, operational, and mission-based risks to the life cycle of a vessel. The optimal design and maintenance strategy for time-dependent environmental compliance can be determined via the use of a sequential decision-making framework known as a Markov decision process (MDP). The purpose of the presented research is to demonstrate the application of a non-stationary MDP to the design and maintenance decisions of a ship that must consider ballast water exchange and treatment policy changes. Research efforts outline the preliminary approach, outcomes, and conclusions resulting from the use of a MDP to model life cycle decisions.