In 2018, recognising that ships are one of the major contributors to global carbon emissions, the IMO (the International Maritime Organization) formulated a strategy for Greenhouse Gas (GHG) reductions in shipping. They expressed their vision in writing with the following statement: "The IMO remains committed to reducing GHG emissions from international shipping and, as a matter of urgency, aims to phase them out as soon as possible in this century".
The IMO has formulated various plans to achieve this aim, and their main goal is to cut annual absolute GHG emissions from international shipping by at least half by 2050 compared to their level in 2008 working towards phasing out GHG emissions from shipping entirely as soon as possible in this century. As part of that strategy, their goal envisages a reduction in carbon intensity emissions (i.e. CO2 emissions per transport work which is calculated as weight of cargo carried * nautical miles) of an average across international shipping by at least 40% by 2030 and working towards 70% by 2050. Again, with the comparison point being 2008.
To reach these goals, the IMO has put in place short term regulations which will assist them to meet their 2030 target. However, other mid and long-term requirements are planned, and the IMO will also conduct a strategy review in 2023 where we expect to see higher ambitions put forward.
IMO Marine Environment Protection Committee – MEPC 76
The IMO MEPC 76 met in June this year. Its key focus was to bring into force the short-term regulations previously approved at MEPC 75 and needed to reach the 2030 goal of reducing GHG by 40%.
Building on the EEDI (Energy Efficient Design Index already in force since 2013 for newbuildings), they adopted an EEXI (Energy Efficient Existing Ship Index) for existing ships. This is a one-off requirement that requires existing ships to modify their design (or implement an alternative measure, as illustrated below) to reach a required level of technical efficiency.
The IMO also adopted the Carbon Intensity Indicator (CII) regulation, which is a mandatory regulation which imposes annual targets on ships for reducing their operational emissions. They also created the enhanced SEEMP, to assist ships to reach their required CII targets. Both sets of regulations will become effective as of 1 January 2023.
EEXI (Energy Efficiency Existing Ship Index)
The EEXI will apply to ships built before 2013 and which exceed 400 GT. The shipowner will have to achieve an approved EEXI by 2023. Put simply, the ship's existing EEXI will be calculated by taking the ship's CO2 emission rate divided by her transport work.
The attained EEXI will vary depending on ship type and size but will either involve the shipowner making technical modifications to the ship, to make it more efficient from a design perspective, or fitting an Engine Power Limitation.
The ship operator can decide which way the ship will achieve the target. This could involve structural amendment to the ship's hull or superstructure, modifying the ship, for example, to burn LNG or LPG instead of HFO/VLSFO, or making a retrofit to the ship's power or propulsion systems. Alternatively, the shipowner could install energy saving devices. One option that many shipowners are expected to adopt, will be to install an Engine Power Limitation. Put in layman's terms, this will be like sticking a brick under the gas pedal of your car, having the effect of limiting the maximum power outtake from the ship's engine so as to reach its attained EEXI. The Engine Power Limitation will be fitted in such a way that it can be removed quickly in an emergency situation for the ship to steam at the necessary speed to maintain her safety.
The Application of the EEXI will be on the ship's first annual, intermediate or renewal IAPP (International Air Pollution Prevention Certificate) survey after 1 January 2023. It is a one-off certification. In other words, the shipowner will have to have had their EEXI calculations and technical trials developed, and get their technical file verified, surveyed, and approved by Class in time for their new IEEC (International Energy Efficiency Certificate) issued in order to meet the deadline.
CII (Carbon Intensity Indicator) rating and enhanced SEEMP
The CII is intended as an additional tool to the EEXI. The CII requirement applies to all cargo, ro-pax and cruise ships, and only to ships over 5,000 GT.
For every year, starting in 2023, the ship will have to meet a continuously declining carbon intensity target. The starting reference point is from a 2019 reference level. Whilst the IMO strategy refers to 2008 as the baseline, there is no reliable data to develop a reference line for 2008, so instead, the IMO has used the 2019 DCS-data (data collection system data). Each ship can calculate its reference level based on its ship type and capacity (DWT or GT depending on ship type).
As mentioned, the reduction levels the ships need to meet will become more stringent each year:
| 2023 | 5% reduction |
| 2024 | 7% reduction |
| 2025 | 9% reduction |
| 2026 | 11% reduction |
| 2027 to 2030 | Review to be conducted by 1 January 2026, but expected to be in the range from 11% to 22% |
Each year from 2023, every ship needs to calculate and report its Carbon Intensity Indicator. The first reporting period is from 1 January 2023 to 31 December 2023. So, by early 2024, the ship should have reported their first CII rating for 2023 which will be verified and reported to the ship's administration. This will be compared against the required annual operational CII, and each ship will then get a rating from A to E. The performance level will be recorded in the Ship's Energy Efficiency Management Plan (SEEMP).
Each ship needs to achieve a C rating or above. If a ship gets a D rating for three consecutive years or if the ship gets an E rating, then the ship will have to include an approved corrective action plan as part of its SEEMP to demonstrate how it will achieve a C rating or above, as a pre-requisite to getting its Annual Statement of Compliance. This will need to be kept on board along with your other certificates.
The basic, simplified, CII calculation is calculated by annual fuel consumption x CO2 conversion factor to get the CO2 emissions, divided by annual distance travelled and the capacity of the ship (which can be calculated either by EEOI (using actual transported weight as the unit) or AER (Using DWT/GT).
| CII = | Annual fuel consumption x CO2 factor divided by |
| Annual distance travelled x Capacity (DWT or GT) |
So, there are two routes to achieve the targets to decrease carbon intensity: reductions in fuel consumption or changing the CO2 conversion factor of the fuel being used on board.
Key factors in reducing the vessel's fuel consumption could be through hydrodynamics, looking at the ship's hull coating, hull form optimization and hull cleaning, to reduce drag. Alternatively, machinery improvements could be made, for example with waste heat recovery, engine de-rating, efficient lighting system, battery use or the use of solar/wind power which could be used either to assist propulsion or create energy for auxiliary and accommodation services. As a further alternative the reduction can be achieved through speed and routeing optimization.
A change of the ship's CO2 conversion factor could be achieved through a change in fuel usage. Fuels being looked at for this are LNG, LPG, biofuels, electrification, methanol, ammonia, hydrogen, fuel cells or harvesting energy from the surroundings or, in the future, a change to biogas or synthetic fuels. Whilst at the moment, the IMO is focusing on the CO2 output from the consumption of these alternative fuels (Tank to Wake), there are talks of the IMO looking at the way these fuels are produced (Well to Wake), which should be borne in mind when considering switching fuels.
Future ambitions
MEPC 77 will meet in November 2021 where future strategies will be discussed.