Abstract In this paper we consider the reduction of air emissions from vessels during the design phase. The aim is to support ship-owners in the vessel design and in the selection of air emission controls for meeting current and future environmental regulations. We present a cost driven optimization model that is concurrently handling two mutually dependent decision problems: Machinery design and selection of air emission controls. The output of the model is the optimal machinery system for the vessel together with the optimal plan for which emission controls should be implemented and when, either during building or later during the vessel life when emission regulations make it necessary. We later extend the model to include the Energy Efficiency Design Index. We present a case study exemplifying the use of the model, and propose methods to include other performance criteria such as environmental sustainability, robustness and flexibility.