The new International Maritime Organization (IMO) regulations on ship carbon emissions are effective as of today. Documenting and reporting on the actions and energy efficiency of ships at sea is a requirement for all ships above 5,000 GT. A Carbon Intensity Indicator (CII) and CII rating is now in use by the IMO to assess how efficiently all ships are operating and guide compliance toward reducing carbon emissions in maritime shipping. To comply with CII, shipping companies need the right data and the right insights to achieve and improve the CII rating for every vessel in their fleet.
What is CII?
The Carbon Intensity Indicator (CII) is a rating framework that evaluates how a vessel operates from a carbon emissions standpoint. Each ship will get a rating from A to E, with A being the best possible rank. It’s one of the three new regulatory frameworks the IMO has implemented, alongside the:
- Energy Efficiency Existing Ship Index (EEXI) – rates how well ships are designed and equipped.
- Ship Energy Efficiency Management Plan (SEEMP 3) – evaluates vessel management.
A ship’s CII rating can range from A to E.
While having the newest, most CO2-efficient vessel with the best technology onboard will help with a good EEXI rating; it doesn’t guarantee a high CII score. To achieve a good CII rating, vessels must show they are run as efficiently as possible, including:
- Optimizing routes and controlling speed for fuel efficiency
- Maintaining the condition of the hull
- Procedures for rapid repair and parts replacement
New CII regulations
The CII regulations effective today establish a standard for vessel scoring using a standardized carbon intensity formula to determine how efficiently a ship is operating. In its most simple form, the CII is an Annual Efficiency Ratio (AER), calculated for each ship and adjusted for certain corrections and exclusions.
Based on the formula and an A-to-E rating scale, if a vessel only achieves a D or E CII rating, the SEEMP management system and report must show how improvements will be made to improve energy efficiency. And every year the IMO intends to tighten the grading bands. If a ship achieves a C rating in 2023, it does not mean the same SEEMP will deliver the same rating in 2024; with higher standards, it could slip to a D rating. Consistent D and E ratings will in turn require that the SEEMP include corrective actions to get the vessel to a minimum C rating.
The IMO’s objective with these new CII regulations is to reduce the amount of CO2 emissions caused by the shipping industry. In 2018, it unveiled a new greenhouse gas reduction strategy, intending to reduce carbon emissions by 40% by 2030 and 70% by 2050 (compared to 2008 levels).
According to ScopeGroup, nearly 30% of vessels at sea may not reach an initial CII rating of C or above now that the regulations are in effect. While data is critical to calculate and report on CII, it is also crucial to help improve shipping operations to align with the IMOs overall goals to reduce carbon emissions and raise vessel CII ratings.
Route optimization is all about bringing together the widest range of data points possible and using them correctly. Data points can include:
- Port information
- Weather data
- Vessel data
- Routing data
- Performance data
- Bunker rate
- Market and cargo intelligence
Choosing the right routes is essential for efficiency and achieving a desirable CII rating. In 2015, the IMO estimated that performing weather routing can reduce fuel consumption by up to 3%. Weather-optimized vessel routing also can help minimize distance sailed, both critical inputs to CII calculations. With up-to-the-minute weather information, combined with accurate long-term forecasting, ship operators can better manage carbon emissions by plotting faster or more efficient paths through or around extreme weather.
Route planning is even more critical for these inaugural years of CII ratings since the June 2022 MPEC resolution did NOT include corrections for adverse weather or extensive port and waiting time, which can cause adverse effects on the fuel consumption and distance sailed inputs for CII.
Vessels running at peak performance support optimal CII ratings. Technology and data are the keys to monitoring the status of fleet operations and post-voyage vessel insights to help reduce the carbon intensity of future routes.
Sensors can be placed throughout each ship to help monitor real-time performance and change. For example, sensors can monitor engine efficiency, cargo, and hull status. Previously, this data was only available once a day via the noon report, but technology allows for up-to-the-minute readings and opportunities to evaluate and make in-voyage decisions that can improve CII compliance.
Technology and data models that use AI and digital twins can further help improve scenario planning and voyage efficiency. With a digital twin model, specific vessel types can be put through various scenarios using historical and current data to better predict voyage and maintenance outcomes. For example, historical performance data combined with weather and ocean temperature put through a digital twin model can help predict fuel burn or the need for hull cleaning. Each of these metrics can affect CII compliance and ratings.
Reporting for compliance
The increase in data required to meet the IMO’s CII regulations should not be underestimated. Ship captains and operators need new ways to gather and streamline the necessary inputs, model the data and surface the needed insights, and quickly pull and calculate necessary reporting information.
As the shipping industry begins to embrace digitalization and digitize, the demand for more efficient operations and compliance reporting is generating higher interest in the adoption of new shore-and-ship-based solutions that allow for data to flow to and from multiple sources. APIs are becoming an important way for ship operators to include, manage, and benefit from the flow of decision-specific data into commercial and custom shipping platforms and software. With the information readily available, reporting for CII compliance (as well as other regulations) becomes much more straightforward.
Benefits of better data and CII
While the primary benefit of achieving a good CII rating is to avoid having to take challenging steps to remedy a bad one, the data required to report on CII and other regulations can create other benefits:
- Operating each vessel in a more fuel-efficient way can dramatically reduce costs and improve the profitability of every voyage.
- Plotting efficient routes to avoid extreme weather keeps crews, cargo, and equipment safe.
- The IMO is encouraging the industry to develop incentives for companies that use vessels with high CII ratings.
- It’s better for the planet.
Having better vessel and route-specific data is critical for compliance with the new CII regulations. But access to better, timely data and intelligence to support more efficient fleet, voyage, and vessel management makes sense on every level. Find out more about DTN Marine Content Services here.