Water separators were first developed as an additional form of silencing for generator sets. Having damped down the exhaust noise itself, and kept the system cool, the water created its own noise nuisance as it spluttered and splashed out of the exhaust outlet. This could be particularly irritating at night in anchorages and marinas.

The same thing applies to the main engine exhaust, and while it isn't usually an issue during normal cruising, it can be surprising noticeable when the boat is stationery, moving very slowly or, as is often the case with sailing yachts, the engine is being used to charge the battery or provide domestic hot water while the boat is on a mooring.

Because the cooling water has done its job by the time it leaves the silencer, one can safely separate the gas and water at this point. A separator is really a modified swan neck fitting. It works by allowing the gas/water mix to enter a chamber where the water gravitates out, falling to the bottom while the gas continues out of a separate outlet. The water is drained overboard to exit absolutely silently below the waterline. Only a dribble of cooling water remains in the exhaust pipe to prevent salt build up in the bottom of the exhaust outlet. The exhaust gas, now cooled and with the vast majority of its noise energy removed, emerges from the hull outlet with no more than a gentle purr. Noise reductions around 80% over and above conventional silencers have been recorded.

Water separators are also useful in reducing back pressure in long exhaust runs. In some cases the water can be removed from the exhaust system quite early, making more room for the gas and thus easing its journey to the hull outlet.
 

Water Separators