The International Maritime Organization (IMO) has intensified its efforts to decarbonize the shipping industry by introducing various emission reduction measures. Among the key regulations are the Carbon Intensity Indicator (CII) and the Energy Efficiency Existing Ship Index (EEXI), both pivotal to shipping’s environmental future. In this blog, we will break down the intricacies of the CII, its calculation, and how maritime stakeholders can navigate these regulations to ensure compliance and reduce carbon emissions.
What is the Carbon Intensity Indicator (CII)?
The CII measures the carbon emissions per unit of cargo transported over nautical miles by a vessel. In simpler terms, it helps assess how efficiently a ship operates in terms of its emissions, directly linking environmental responsibility to operational performance. This metric is critical as it takes a holistic approach, incorporating a ship’s fuel consumption, distance sailed, and deadweight tonnage.
CII regulations also shift the focus from merely technological upgrades to operational behaviors, offering a broader perspective on how maritime activities can align with global decarbonization goals.
Which Ships Must Comply with CII Regulations?
The CII applies to ships above 5,000 gross tonnage, covering major vessel types such as bulk carriers, tankers, and container ships. Vessels within this threshold are obligated to report their annual carbon intensity starting from 2023.
How is the CII Calculated?
To calculate the CII, the Annual Efficiency Ratio (AER) is employed. The formula is:
AER = (Annual Fuel Consumption × CO2 Emission Factor) / (Distance Sailed × Design Deadweight)
This calculation provides an index that is then adjusted with correction factors (such as exclusion of voyages under extreme weather conditions) to reflect a ship’s actual carbon intensity.
Vessels are then assigned a rating from A to E based on their CII score:
- A: Excellent
- B: Good
- C: Moderate (compliant level)
- D: Below average
- E: Poor
A vessel that receives a D rating for three consecutive years or an E rating for any single year is required to submit a Corrective Action Plan within their Ship Energy Efficiency Management Plan (SEEMP). This plan outlines the steps to improve the CII rating and maintain compliance.
Why 2019 is Used as a Reference Year for CII
The decision to use 2019 as a baseline stems from the need for a recent, stable reference point. Unlike the IMO’s Greenhouse Gas (GHG) Strategy, which uses 2008 as a benchmark, 2019 reflects the shipping industry’s more current operational realities. This ensures that reductions are measured against a year that better represents the current fleet’s performance and technologies.
What is the Difference Between EEXI and CII?
While both the EEXI and CII aim to reduce greenhouse gas emissions, they differ in focus:
- EEXI: Primarily a one-time technical measure that applies to all ships in service. It sets design efficiency standards for existing ships based on engine power and fuel consumption.
- CII: An operational measure that applies annually, focusing on how efficiently a ship is run throughout the year in real-world conditions.
How Will CII Be Applied to Converted or Newly Delivered Vessels?
For ships undergoing a major conversion or new vessels delivered mid-year, the CII will be calculated based on the period the vessel has been operational during the reporting year. Adjustments and prorations will be made to reflect the ship’s usage, ensuring fair assessment.
Correction Factors and Adjustments in CII
Correction factors play a critical role in accurately assessing a ship’s operational efficiency. These factors include adjustments for specific voyages or unusual operational conditions such as safety measures, rescue operations, or adverse weather conditions. The IMO provides a full list of correction factors, which can be accessed in the official IMO guidelines on CII implementation.
What Happens If a Vessel Receives a Poor CII Rating?
A vessel that consistently underperforms (D rating for three consecutive years or an E rating) is subject to enhanced monitoring and must develop a Corrective Action Plan. The consequences are both operational and financial:
- Higher operational costs: due to fuel inefficiency.
- Reputational damage: within the industry, particularly in light of ESG standards.
- Market disadvantage: Many charterers and financial institutions, under initiatives such as the Poseidon Principles, increasingly prefer vessels with strong environmental credentials.
Conclusion: Sailing Towards a Greener Future
CII regulations are an integral part of the IMO’s broader effort to decarbonize the maritime industry. By understanding and calculating your ship’s CII score, adopting corrective measures, and leveraging advanced technological solutions, stakeholders can significantly reduce their carbon footprint and align their operations with global sustainability goals.
For more information on how VoyageX AI can help your fleet achieve optimal CII compliance, visit our website or contact our team.
