Wet & Dry Exhausts
There are two basic types of boat exhaust system: wet ones and dry ones. Some large commercial vessels have dry exhausts with engine exhaust gases exiting upwards through a funnel, or funnels. Many small commercial vessels, particularly fishing boats, also do it this way as it's cheap and simple. You've probably seen them chuffing along, puffing black smoke out of a stack just behind the wheelhouse.

But dry exhausts get very hot and requiring lagging (insulating) or physically guarding wherever people could come into contact with them -especially over the first few meters in the engine room, or on deck. Dry exhausts are also noisy, often producing a harsh 'bark'when the engine is working hard and tend to transmit vibration into the hull if the mounting isn't done very carefully.

As funnels are not usually a practical proposition on leisure craft, nearly all motor boats and sailing yachts below 30m -and most small commercial passenger vessels -have a wet exhaust system running inside the hull. The exit is normally on, or close to, the waterline, often right aft. Obviously, it would be dangerous to have a very hot exhaust pipe running through the boat, perhaps just behind the furniture in an aft cabin. It would also be desperately uncomfortable in hot weather. Silencing such an exhaust would also prove rather difficult: the necessarily large metal muffler would take up too much room.

Fortunately, the heat problem can be overcome and noise greatly reduced by injecting water into the exhaust pipe just behind the engine. Thus we have what's known, quite logically, as a wet, or 'water injected' exhaust. There are other advantages. The reduction in temperature means that the exhaust system can be made of something other than steel, saving considerable cost and weight and reducing vibration. Special rubber exhaust hose can be used to join straight lengths of tubing, and in smaller boats it can make up the entire exhaust run. Exhaust hose is also useful as a flexible joint between the engine and the exhaust system proper.

Although injecting water into the exhaust reduces noise to some extent, these days it's common to find a silencer as well particularly on leisure craft. All EC built boats up to 24m have to comply with EU maximums for noise emissions, if they were built after 2005.
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Exhaust Basics

Smokey dry exhaust on a commercial ship.

Most pleasure boat exhausts depend on a constant flow of cooling water.