What is a Ship’s Carbon Intensity Indicator and has it anything to do with fuel efficiency?

 

IMO is defining a rule set for short-term measures to reduce the CO2 emissions from Shipping. The reduction towards 2030 is targeted for 40% (towards the 2008 values) and one of the measures is, that in the near future ships will be rated by a Carbon Intensity Indicator (CII) defined from IMO.

From 2023 it is expected that ships will be rated on their operations in a rating scheme defined by their reported Annual Efficiency Ratio (AER). The AER (or the CII) will be defined by the reported values in the IMO DCS scheme and is defined as

The rating scheme is then defined by the ship type e.g. a tanker, bulk carrier or other and the CII values are calculated for each vessel. The individual ship is then compared to target values and rated in the scheme from A to E, where A is the best and E is the worst.

 

 

 

It can be serious to operate in the D and E region, where there in the rules are limitations of the time allowed to be in these regions. Since the ships operating there are the ones emitting the most CO2 according to the CII definition. Further it will be difficult to get a contract for a D or E rated vessel in the market. So, owners and operators should stay out of these two areas.

Every year it is expected that the ships is to improve the rating by a percentage to get to the final 40% by 2030 which makes it even more important to have control over the ratings.

Since owners/operators that have their ships in the market under a charter contract do not very often have control with the operations, it will be a good idea to have the dialogue with the charterer about the CII rating. The owner/operator might end up with a badly rated vessel after a contract has been terminated and with a bad rating, it might not be possible to get a new contract.

Looking at the definition of the CII, the fuel efficiency is of course of high importance. The more fuel efficient the vessel, the less CO2 emissions and in principle also the better rating. But unfortunately, in the CII, a few operational parameters are included that can have an impact on also a fuel-efficient vessel. So, the (in principle) efficient vessel can be operated badly and still end up with a bad rating, which probably is not the intention with the rules set.

To avoid this, the owner/operator need a good set of tools. First of all, to control the fuel performance of the ship and second to control the operations.

In VesOPS, we have developed the good performance tool where an accurate description of the fuel efficiency for the vessel is available.

In the VesOPS software it is further possible to keep track of the development of the CII over a year. It is possible to simulate different operational scenarios and from a target setting on percentage reduction in CII rating, to predict the “good” operations of a ship. Once a contract for the vessel is defined the effect on the CII can be estimated and even shared with the charterer for transparency towards regulatory compliance.The software can further be used with the EEOI as CII or any other that you might meet in the market.

We can build your CII scenarios and thereby help you with your regulatory compliance reporting. Please contact us at +45 2939 2960 to learn more about our services.

Do you also know about the EEXI and the services that we can offer you in VesOPS regarding this? You can read more about this if you click here.