Mon. Jun 17th, 2024

IMO Launches Revision of CII Regulations

The 80th session of IMO’s Marine Environment Protection Committee (MEPC 80) has initiated the review of the short-term measures, ie the Carbon Intensity Indicators (CII), Energy Efficiency Existing Ship Index (EEXI) and Ship Energy Efficiency Management Plan (SEEMP), by approving the plan for such a review.

The scope of the review will include experiences with the enforcement of short-term measures by Flag States and Port State Control (PSC), the CII metrics (currently Annual Efficiency Ratio (AER)), as well as correction factors and voyage adjustments for CII.

The review will be carried out in three phases:

1. From now until MEPC 82 (to be held in autumn of 2024) the focus will be on data gathering

2. MEPC 82 will initiate a data analysis, which will be continued by a correspondence group until MEPC 83 (to be held in spring of 2025)

3. A working group scheduled to meet in late 2024 or early 2025 will begin the review of the regulations in MARPOL Annex VI and the associated guidelines.

Data to facilitate the review

MEPC 80 also approved changes to datapoints that shall be submitted annually to the IMO Ship Fuel Oil Consumption Database. The changes are expected to be adopted by MEPC 81 in April next year. However, these changes may not enter into force in the autumn of 2025 at the earliest, with application for the calendar year 2026. Therefore, data containing the new datapoints will not be available for consideration in the second half of 2027. Meanwhile, the review of short-term measures according to MARPOL Annex VI has to be concluded by 1 January 2026.

Consequently, Flag States and other stakeholders, such as international organisations representing shipowners and/or charterers, are invited to collect data to facilitate the review process and submit it to IMO no later than by MEPC 82 in the autumn of 2024.

The move is being launched after the regulation received a lot of criticism amid fears that the methodology used might result in unintended consequences and penalization.

Member States of IMO, meeting at the Marine Environment Protection Committee (MEPC 80), adopted the 2023 IMO Strategy on Reduction of GHG Emissions from Ships.

The ship with the best AER would be the ship always trading in ballast condition without any cargo onboard

With the present CII metric, the ship with the best AER would be the ship always trading in ballast condition without any cargo onboard. As a result, the current metric penalises efficiently operated ships carrying cargo, while favouring inefficiently utilised empty ships. Whereas the metric AER favours ships in ballast condition, the voluntary metric currently used for trial purposes – the Energy Efficiency Operational Indicator (EEOI) severely penalises them. Neither is appropriate. Ballast condition is an integral part of ships’ normal operation and should neither be favoured nor severely penalised.

Deduction of fuel oil consumption when the ship is not underway from the calculation of the attained CII

The inclusion of fuel consumption when the ship is not underway in the calculation of the attained CII also pose challenges for a functioning CII framework because:

1. ships are penalised for time spent at ports despite the fact that the length of port calls is completely outside the control of the ship. The duration of port calls depends on the efficiency and limitations of the port or terminal. The CII regulations offer no incentives to ports and terminals to improve their efficiency

2. ships engaged in short sea shipping are penalised because the nature of the trade includes significantly more port calls compared to long haul trades

3. in periods of reduced demand and consequential oversupply of ships, some ships will wait at anchorage for long periods until new orders are received. This waiting time at anchorage results in a deterioration of the ship’s attained CII

4. some ports and terminals are notorious for congestion, meaning that ships have to wait at anchorage for prolonged periods of time before being able to load or unload their cargo. This leads to some trades being disproportionally impacted by the CII framework to such a degree that they could be characterised as inferior trades.

Reduction of GHG emissions

Revision of the IMO GHG Strategy, The ambitions for international shipping were significantly strengthened from the 50% GHG reduction ambition by 2050 in the initial strategy. The revised strategy now aims for reducing well-to-wake GHG emissions by 20%, striving for 30% in 2030 and then 70%, striving for 80%, in 2040 compared to 2008, and reach net-zero “by or around, i.e. close to, 2050”. There is also a 2030 target to achieve an uptake of zero or near-zero GHG emissions technologies, fuels and/or energy sources, representing at least 5%, striving for 10%, of the energy used by international shipping.

The GHG Strategy now also addresses life-cycle GHG emissions from shipping, with the overall objective of reducing GHG emissions within the boundaries of the energy system of international shipping and preventing a shift of emissions to other sectors.

Mid and long-term measures to reduce GHG emissions

To ensure that shipping reaches these ambitions, the IMO has decided to implement a basket of measures consisting of two parts; Firstly, a technical element which will be a goal-based marine fuel standard regulating the phased reduction of marine fuel GHG intensity; Secondly, an economic element which will be some form of a maritime GHG emissions pricing mechanism, potentially linked directly to the GHG intensity mechanism.

The development of the measures will continue at the IMO and will, according to the agreed timeline, be adopted in 2025 and enter into force in around mid-2027.

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