On 17 June 2021, IMO adopted the recommendations of MEPC 76 (Marine Environment Protection committee). The GHG reduction strategy proposed sets out short, medium, and long terms measures. These in turn have resulted in new requirements for shipowners, both for existing ships and new ships which are yet to be designed. For new ships, the concept of EEDI (Energy Efficiency Design Index) has been introduced which is basically a ratio of the “environmental cost” divided by the “benefit to the society”. Throughout the useful life of the ship, EEDI will be cross-referenced by EEOI (Energy Efficiency operational Index) which will need to be improved each operational year by a certain factor.
For existing ships, there is a new concept of EEXI (Energy Efficiency Existing Ship Index) to be complied with. This is going to be applicable to all existing ships, above 400GRT, without exemptions.
EEXI (Energy Efficiency Existing Ship Index):
The requirement for all existing ships to be EEXI compliant will be mandatory by 1 January 2023. To be compliant by that date, it means ship’s owners must start working without delay to meet these requirements so that compliance can be obtained.
Since 2019, all ships are having to report certain parameters as for the fuel type, consumption, sludge generation, sulfur content, and other mandatory information. This forms the basis of reduction required under EEXI since this information is available to all interested parties.
The requirements are clear and concise:
Step 1: Determine EEXI for each individual vessel.
Ships must at first collect all the documentation needed:
- NOx Technical Files of A/E and M/E
- Lightweight Certificate or Inclining Test Report
- Trim & Stability Booklet
- Model Test Report
- Speed test from Sea Trial Report
- EEDI Technical File (if available)
Step 2: Analyze potential measures.
In order to decide how to achieve the EEXI. The potential measures suggested by the industry yet are:
- Propulsion optimizations
- Engine optimizations
- Energy efficiency technologies
- Engine Power Limitation (EPL)
- Operational efficiency measures
- Just in time arrivals and departures from ports
- Hull and appendage modifications to improve on losses
- Use of hybrid/renewable energy technologies
Step 3: Installing the potential measures.
To do that, owners/operators must develop a well laid out plan as to service providers, cost/benefit analysis, out of service periods, analyzing the claimed efficiency improvement versus the actually attained benefits.
Step 4: After each intervention, EEXI Technical File has to be created/updated, which will contain:
- EEXI calculation according to calculation guideline
- EEXI Technical file according to EEXI calculation guideline
- All documentation from improvement measure
- Updating of all changes/interventions.
After the Final EEXI Technical File is submitted and approved, an onboard survey will take place and a new IEEC will be issued.
CII (Carbon Intensity Indicator):
Along with the EEXI, the Carbon Intensity Indicator (CII) will enter into force from 2023. CII is defined as CO2 emissions per transport task (CO2/dwt x nautical mile). It is calculated based on a vessel’s mandatory annual fuel report to the IMO.
Based on this, vessels will be rated from A (best) to E (worst). This rating can have a direct effect on the vessel’s commercial value, in terms of fuel efficiency, charter value, insurance, port fees, and depreciation. Ships rated D for three consecutive years or rated E will have to plan to improve their rating or scrap the vessel.
The CII applies to all ships above 5,000 GT of the following ships types: bulk carriers, gas carriers, tankers, container ships, general cargo ships, refrigerated cargo carriers, combination carriers, LNG carriers, vehicle carriers, Ro-Ro cargo vessels, Ro-Ro passenger vessels, and cruise ships.
For different ship segments, the CII is based on different ways of measuring the carbon footprint of the transport work. The Annual Efficiency Ratio (AER) and capacity gross ton distance (cgDist) are two such CIIs using different units. AER (emission per dwt-mile) is used for segments where the cargo is weight critical, and cgDist (emissions per gross ton-miles) for volume-critical cargo.
The EEXI is a one-time certification equivalent to the EEDI (Energy Efficiency Design Index) phase 2 or 3 concerning design parameters of the vessels. The CII is an operational indicator and will be assessed annually from 2023 with yearly stricter emission limits. The EEXI and CII are applicable to the same ship types.
The difference is that CII ratings will apply to ships 5,000 GT and above regardless of propulsion type.
A strengthening of the SEEMP (enhanced SEEMP) to include mandatory content is a part of the CII regulation. The intention is to ensure continuous improvement of energy efficiency and lower carbon intensity. The enhanced SEEMP shall include an implementation plan on how to achieve the CII targets, and it will also be subject to approval and company audits.
The CII is based directly on fuel consumption, which is influenced by how a specific ship is operated in combination with its technical efficiency and fuel. Its value will be affected by the type of fuel used, the efficiency of the vessel, and operational parameters such as vessel speed, cargo transported, weather conditions, and the general condition of the vessel (e.g. biofouling).
An owner can control the CII by optimizing operations and ensuring vessels are in a good condition.
The targets of CII reduction are as follows:
The year 2019 Fuel consumption
The year 2023
5% reduction from Datum in fuel consumption
Then 2% reduction till 2026 i.e., 11% reduction from 2019 datum. 2027-2030 goals are yet to be decided.
It is indicated by IMO that in 2026, the results of short-term measures for GHG reduction (2023-2026) will be reviewed, and there will be a new set of targets issued for the medium term. These targets will also depend upon the results of the efforts to develop carbon-neutral fuels, new and emerging technologies using fuel cells, evolution of alternative and renewable energy solutions etc.
It should be clear from above, that the operating environment is heading for a big change. Owners/operators must act now proactively, or risk getting behind regulatory compliance.
The above is a real life vessel (1986 built) running on our full MEPC Package. The results and fuel savings are very much in line with IMO CII reduction targets, thus this vessel and it’s sister vessel will not have any problems in maintaining “A” status in 2023 till 2026 period.
To know more about this service, contact us.