By Dr.Thilo Dückert and Thomas Weber
In 2023 the International Maritime Organization is expected to implement new initiatives to cut the shipping industry's carbon footprint. The new greenhouse gas (GHG) strategy will put increasing pressure on all industry actors and require ship owners to report their sustainable operations annually. The Carbon Intensity Indicator (CII), effective from January 2023, will indicate the vessel's operational efficiency. We asked our experts, Dr. Thilo Dückert and Thomas Weber, to answer the most pressing questions about the new regulations.
Question: What are the emission reduction goals for the IMO?
Answer: In line with the UN’s climate action targets, the IMO aims to reduce total greenhouse gas emissions from shipping by 50% by 2050 (against 2008 levels), and to reduce the carbon intensity of all ships by 40% by 2030.
Question: Does the 40% apply to individual ships?
Answer: The reduction goals apply to the entire global shipping industry. This has been simulated into the Carbon Intensity Index (CII) rating system for individual ships to meet the goals by the deadline.
Question: What vessels will CII apply to?
Answer: The CII is an operational efficiency indicator that measures a vessel’s carbon intensity over time and is given in grams of CO2 emitted per cargo-carrying capacity and nautical miles travelled. It will be required by all cargo, RoPax, and cruise ships above 5000 GT (gross tons). The category of offshore and seismic vessels category would need to be checked to determine if CII regulations apply to them.
Question: How will CII be calculated?
Answer: The CII is derived from the Annual Emissions Ratio (AER): annual fuel consumption multiplied by the CO2 emissions factor, divided by the transport network (distance sailed by a ship multiplied by capacity). Furthermore, some adjustment factors may be applied to the above formula.
Furthermore, there are several correction factors for specific ship types (see the image below). Corrections are applied for ships with ice class, refrigerated cargo, or heating or cooling systems for cargo or cargo handling systems. There are also additional exclusions, such as for shuttle tankers in ship-to-ship cargo operations, chemical tankers, and structurally enhanced bulk carriers.
Image: CII calculation including correction factors
Question: Is CII calculated on an annual basis or on individual voyages?
Answer: Data will be reported on an annual basis.
Question: When will the CII regulation be enforced?
Answer: Effective from January 2023.
Question: Do operating speeds and latent miles impact CII?
Answer: Operating speed has the greatest impact on CII due to the cubic relationship between speed and consumption. The capacity is either the deadweight or the gross tonnage of the vessel, depending on the type of vessel. Hence, the capacity is constant in the above formula. Furthermore, the IMO is currently discussing a list of exclusions and corrections to this calculation, which will be finalized before it comes into force in January 2023.
Question: Would yard stays and/or laid-up vessels be excluded from the CII calculation?
Answer: It is not yet decided how certain operations and events will be accounted for. As a matter of fact, the trading pattern of a vessel may significantly impact the CII. For example, consider two sister vessels. If one of the vessels has more frequent port calls and the other spends more time on sea passages, they may attain different CII values and, most likely, different ratings. In this case, the latter vessel would benefit from the trading pattern and achieve a better CII.
Question: What will the CO2 emissions factor be?
Answer: The same as that applied to the current Fuel Oil Data Collection System (DCS) scheme.
Question: What data will need to be reported in applying for a CII classification?
Answer: Firstly, the same data that is required for current DCS reporting: all distances sailed, all times at sea, and all fuel consumption throughout the year. Secondly, data that is required to support adjustments made to the fuel consumption used for calculating the CO2 emissions, e.g., fuel consumption by cargo heating/cooling systems.
Question: How would a Charter decision impact CII?
Answer: Besides the instructed speed and consumption, the trading pattern and, the relation between times underway and waiting or in port, may also impact the CII rating. The ship is given an annual rating ranging from A to E, and if the rating is below ‘C’, the contact would not be compatible with environmental regulations. This might become more prevalent over time as the CII rating becomes stricter.
Question: When simulating CII for future years, which year should be used as a base?
Answer: The IMO reduction targets for 2050 are based on data from 2019, but keep in mind that the CII regulation will only come into force in 2023. The CII reference is calculated based on data for 2019, and reduction factors continually lower the required annual operational CII. These reduction factors are so far defined until 2026 and may become further strengthened afterward. The most important parameter for a vessel will be its CII rating.
Question: What happens if a vessel receives a D/E rating?
Answer: Any ship receiving a rating of ‘D’ for three consecutive years or receiving a rating of ‘E’ in a single year will be required to implement a corrective action plan, part of the Ship Efficiency Management Plan (SEEMP). This will impact each vessel’s annual statement of compliance.
Question: How can ‘just-in-time’ systems impact CII?
Answer: Speed is the largest factor impacting emissions, and each knot reduction results in considerable savings. Thus, by optimizing a ship’s speed and routing to avoid long stays at anchorage awaiting a berth, emission reductions can be achieved.
Question: Can a vessel owner increase dead weight?
Answer: A larger ship should be more carbon-efficient than a smaller ship, but this effect of scale has been taken into account when defining the calculation of the reference CII. While options are available for tuning the dead weight, the possible adjustment is so small that it will likely will not make a significant difference.
Question: Will consumption in ports impact CII?
Answer: A ship’s overall fuel consumption throughout the year will include stays in port. The vessel usually consumes fuel during port stays or idling, emitting CO2 but in a much lower quantity than when on a sea passage. However, during these times there is no transport work done. So, the denominator of the CII formula is not increasing just the numerator, as long as no permissible adjustments are made.
Question: If fleet sizes increase because individual ships are slow sailing, would CO2 emissions increase?
Answer: Yes, this is a pragmatic way to approach the new regulations and would reduce emissions for a single ship but would not reduce emissions for the worldwide economy.
Question: What if world trade increases?
Answer: The regulations apply to carbon intensity, not total emissions.
Question: If a ship were to decrease its distance traveled, how would it affect its CII rating?
Answer: If a ship reduces its distance travelled, it also consumes less fuel. Moreover, it could execute the same voyage from A to B at a lower speed and arrive at the same time. So, routing efficiency has a huge impact on the CII and the corresponding rating.
Question: How would improving ship fittings impact CII?
Answer: All technical measures to improve a ship’s emissions or fuel consumption from a design perspective would positively impact a CII calculation.
Question: Does StormGeo have an alert system for monitoring carbon emissions?
Answer: Yes, the weather service provider StormGeo has a mobile app, a web portal, and an email alert system to track data and monitor ship performance.
Question: Will existing users of s-Insight receive a tool for CII?
Answer: Yes, this tool will be added to the existing software.
Vice President, Fleet Performance Management
Director, Fleet Performance Products