Carbon intensity indicator

Continuous improvement plan is required to ensure ships comply

The first annual reporting on fuel consumption for the carbon intensity indicator (CII) is now underway so that ratings can be given in 2024. Insight explores how ships will need to employ a variety of measures to ensure a 'C' rating or better is awarded and maintained.

Charting the efficiency of ships carrying cargo across the globe is no easy matter to measure and control. The challenge is not only to develop a system to rate individual ships but for each ship to maintain that rating as the measurement criteria become increasingly stringent.

Over 90% of everything we consume, on a global basis, is moved by sea. But, less than 1% of the global trading fleet, estimated at some 60,000 vessels in 2019, used a fuel that was not heavy oil based.

The shipping industry is responsible for around 3% (940 million tonnes) of the worlds total CO2 emissions.

There is increasing pressure on the sector to reduce its carbon footprint but how can an industry that is global in its nature but localised in its ownership and control be regulated?

The International Maritime Organization (IMO) is challenged with agreeing the way forward to bring global rules to its member organisations. It is different from a single entity that can impose regulations but has to get consensus between 175 member states. This means mutual collaboration and understanding through excellent communication, and at the same time provide support for those member states that are less able to implement these regulations as quickly or comprehensively as those states who want or can move faster.

Improving ship efficiency

IMO adopted the first set of international mandatory measures to improve ships' energy efficiency in 2011. In the past decade, further initiatives and regulatory measures have been undertaken to reduce greenhouse gases. The latest of these requires every ship over 5,000 gross tonnage (GT) to be given a Carbon Intensity Indicator (CII) which will indicate its energy efficiency based on a ship’s capacity to transport cargo and the fuel consumed in order to transport that cargo. On that basis the ship will be rated into 5 categories (A, B, C, D, E) where ‘A’ is the best and ‘C’ is the average.

If the ship is rated as an ‘E’ for one year or a ‘D’ for three years then there needs to be a plan for corrective actions to meet the ‘C’ category.

CII came into force on November 1 2022, and the first annual reporting on fuel consumption will be completed over 2023, which will form a base on which CII can be calculated. This allows the first energy efficiency rating, measured in ‘grams of CO2 emitted per cargo-carrying capacity and nautical mile’, to be made in 2024, when ships will be given a rating. This straightforward rating system will give a very clear indication of how efficiently a ship transports goods or passengers.

Since CII is based directly on fuel consumption, it can be influenced in a number of ways including how a specific ship is operated, its technical efficiency and fuel choice. Several measures can be taken to improve vessel efficiency including reducing drag (which may be via hull coatings and a regular cleaning regime) propellor polishing, optimising power generation with supplementary battery hybridisation and waste heat recovery, operational factor improvement such as slow steaming and route selection. In addition, fuel selection and additive choice can also positively influence the CII rating.

Continuous improvement required

However, a minimum C grade will be increasingly difficult to meet. The CII contains a reduction factor relative to a 2019 reference line, which starts at 5% in 2023, with 2% added yearly through to 2026.

Improvement goals are designed to encourage ship owners to consistently improve operational efficiency across their fleet.

These thresholds are expected to become increasingly stringent with the course of action being clear - a move towards zero emissions or decarbonisation of the industry around 2050. Maintaining the current CII rating alone will be challenging, but vessel operators will need to incorporate a continuous improvement plan to improve their CII in the next few years. 

Because IMO regulations are technology neutral this encourages a broad range of developments on the route to decarbonisation and leaves it up to the operators and owners to decide what fuel and technology to use. What this means for the wider industry is increased complexity - more engine types, more fuels to be stored and more lubricants in use - and new additive systems will be needed to help ensure trouble free operation.

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