- The International Maritime Organization’s (IMO) Carbon Intensity Indicator (CII) will be applied to all vessels from 2023.
- It will impact operational measures with the aim of reducing emissions.
- The challenge for ship owners is to adequately prepare for its implementation. Digital technology will play a vital role in meeting this challenge.
The IMO has developed its CII regulation as part of its strategy for supporting the UN’s climate action targets by substantially reducing greenhouse gas (GHG) emissions from ships. The aim is to reduce GHG emissions by 50 percent from 2008 levels by the year 2050, and to lower the carbon intensity of ships by 40 percent by 2030.
Enforcing Efficiency
The new CII regulation will enforce the development of technical and operational efficiency measures for both new and existing ships. At the same time, the IMO will introduce its Energy Efficiency Existing Ship Index (EEXI), which is based on the vessel’s design and measures CO2 per ton mile.
CII essentially measures how efficiently a ship transports goods or passengers. It is given in grams of CO2 emitted per cargo-carrying capacity and nautical miles traveled. It is derived from the Annual Emissions Ratio (AER).
Based on a general formula, the IMO introduced several correction factors for specific ship types.
Achieving a Compliance Rating
All cargo, RoPax, and cruise vessels above 5000 GT will be required to have a CII rating based on data provided annually to the IMO. In order to be compliant and to continue normal operations, the rating must be C or better. Any ship receiving a D rating for three consecutive years, or an E rating will be required to implement a corrective action plan.
Over time, the CII will become ever stricter, and the values for ratings will diminish. This means that should a vessel maintain a specific CII value, it will move into a lower rating over the years. In order to remain within its CII rating category, it will need to continuously reduce its emissions, either through design or operational improvements.
Necessary Steps
In preparing for the new CII regulations and the assessment of a vessel in advance of being graded, digital tools will be of vital assistance. One requirement will be a reporting system for collecting a vessel’s data according to the Data Collection System (DCS) standard.
Additionally, monitoring of the fleet to constantly check CII performance and the quality of the data collected and to predict the annual CII rating for each vessel, will be necessary. So too will be an automated data interface for CII tracking. Finally, a simulation tool will be able to assess a year-end rating, while also providing potential alternative scenarios for each vessel’s voyage plans.
Impact On Business
CII ratings will have a significant impact on the business performance of all shipping companies. Abiding by the regulations and keeping vessels at or above the C rating will be essential. Failure to adhere to the CII regulations will risk losing charter business, and will impact how charter parties are managed. Vessel financing will also be affected, since access to investment capital and the cost of capital for new tonnage will be affected by the CII rating.
Counter-productive measures in the search for ways to reduce emission measurements, such as limiting a vessel’s use, reducing cargo, or shortening voyage lengths, need to be avoided as they risk having a negative impact on the ship’s commercial appeal.
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Source: Stormgeo
