Carbon Intensity Reduction: IMO establishes ship rating system

New mandatory measures to cut the carbon intensity of international shipping have been adopted by the International Maritime Organization (IMO), setting shipping on a course to meet greenhouse gas reduction targets established in the 2018 Initial IMO Strategy for Reducing GHG Emissions from Ships.

IMO’s Marine Environment Protection Committee (MEPC 76), at its meeting which ended last week, adopted amendments to the International Convention for the Prevention of Pollution from Ships (MARPOL) Annex VI that will require ships to reduce their greenhouse gas emissions. These amendments combine technical and operational approaches to improve the energy efficiency of ships, also providing important building blocks for future GHG reduction measures.

The new measures will require all ships to calculate their Energy Efficiency Existing Ship Index (EEXI) following technical means to improve their energy efficiency and to establish their annual operational carbon intensity indicator (CII) and CII rating. Carbon intensity links the GHG emissions to the amount of cargo carried over the distance travelled.

Ships will get a rating of their energy efficiency (A, B, C, D, E – where A is the best). Administrations, port authorities and other stakeholders as appropriate, are encouraged to provide incentives to ships rated as A or B also sending out a strong signal to the market and financial sector.

A ship rated D for three consecutive years, or E, is required to submit a corrective action plan, to show how the required index (C or above) would be achieved.

IMO Secretary-General Kitack Lim said the adoption of the new measures would build on IMO’s previously adopted mandatory energy efficiency measures, to lead shipping on the right path towards decarbonisation.

“The path to decarbonization is a long, but also a common path in which we need to consider and respect each other’s views. We have made a considerable amount of progress since the start of our journey,” Mr. Lim said, ” … your progress will continue to provide the benefit of experience to be able to make ambitious, and evidence-based decisions for phase 3 of the implementation of the operational measure which will be further strengthened and developed taking into account the review of the short-term measure and the latest climate science,” he added.

The amendments to MARPOL Annex VI (adopted in a consolidated revised Annex VI) are expected to enter into force on 1 November 2022, with the requirements for EEXI and CII certification coming into effect from 1 January 2023. This means that the first annual reporting will be completed in 2023, with the first rating given in 2024.

A review clause requires the IMO to review the effectiveness of the implementation of the CII and EEXI requirements, by 1 January 2026 at the latest, and, if necessary, develop and adopt further amendments.  

Mr. Lim welcomed the adoption of the work plan.

“Concessions have been made on all sides in the interest of securing the framework we have in place. Our consideration of mid-and long-term measures will demand even more of us. I am very pleased that the Committee has agreed on a work plan to support carrying out this dimension of our work in a structured way that will keep the membership together,” Mr. Lim said.

“Agreement on the work plan sends the signal that the Organization and its Member States are ready to further consider the current and future proposals for mid-term measures. We need to gear up work relating to the various phases of the work plan in order to give efficient and adequate consideration to concrete proposals for the reduction of greenhouse gases in keeping with our goals in the initial strategy.  Let us continue to work together on the tasks you have in front of you as we continue to make progress on this common path,” he said.

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