Blue Sky Maritime Coalition attached a report which argues that the rating methodology for the Carbon Intensity Index (CII) being proposed by the IMO has flaws in it.
Based on the result of the CII equation, a ship is assigned a ranking in letter grade format (A, B, C, D, or E). An A ranking results from a CII value that is well below the maximum allowable value for that type of vessel, and an E ranking results from a CII value that is well above the maximum allowable value. A vessel that receives a D ranking for three consecutive years, or an E ranking for one year, will be required to develop a plan for corrective action or it will not be issued a Statement of Compliance related to fuel oil consumption reporting and operational carbon intensity rating.
However, the report says that the problem many Owners have with CII is that they are often not in control of whether the vessel makes short trips or long trips, or even how fast the vessel needs to transit between ports in order to be in position for when the third-party terminal is ready to transfer the cargo to or from the vessel. Those decisions rest primarily with the charterers of the vessel, the operators of the terminals, and are affected by market dynamics in general. But currently it is solely the vessel Owner who will bear the consequences (commercial or otherwise) if those operational decisions result in a poor CII grade.
Another shortcoming with CII is that it does not take into account the actual weight of cargo carried by the vessel during the course of the year. Instead, it assumes the ship is carrying its full rated DWT capacity all of the time. This makes it impossible to differentiate and reward ships that are operated more efficiently by their Owners /or Charterers on a ton-mile basis.
Days in transit
A sensitivity analysis can be performed to prove that waiting time alone has a profound impact on the CII score. If the goal is to reduce absolute carbon emissions, the analysis points directly to the inherent flaws of the formula as constructed.
The higher the number of transit days, the higher the absolute level of carbon emissions. Yet, the highest absolute level of carbon emissions perversely corresponds with the best CII rating. A rethinking of the CII is needed to address the differing operational conditions of the vessel so as to weigh the emissions impact of activities other than “underway, making way
Increasing charterers’ responsibilities
There is some movement in the industry towards making Charterers more responsible for the CII grade issued to a vessel that results from the voyage orders they issue to that vessel. BIMCO recently issued a draft charter party clause that would assign proper responsibility for achieving required CII scores. The draft clause puts the responsibility for meeting an agreed-to CII score on the Charterer and recognizes that the Charterer’s orders may need to be modified from time to time during the charter period in order to meet it. It would make the Charterer submit a written corrective action plan when the agreed-to CII score is not met.
The draft clause does not let Owners off the hook. It would require both parties to work together in good faith to ensure the agreed-to CII score is met. It would also require the Owner to exercise due diligence in the daily operation of the vessel to minimize fuel consumption, through measures such as efficient voyage planning, trim optimization, and main and auxiliary engine operation.
Correction factors
Several correction factors are under consideration at the IMO level which would adjust CII scores for certain vessels in certain circumstances where it is acknowledged that the vessel is unfairly penalized by the CII calculation without it. One in particular that has the full support of the authors, and would correct some of the situations described earlier in this paper, is that submitted by Liberia to the IMO’s Working Group on Reduction of GHG Emissions From Ships on 1 April 20227. The proposed correction factor would reduce CO2 emissions on any voyage where the total time under way is less than 72 hours.
This proposed correction factor would not, unfortunately, help a vessel with a voyage length of over 72 hours underway that is forced to sit at anchor for an extended period of time due to the charterer’s requirements or while waiting for its next job. Such a vessel would still suffer a low CII score despite the waiting time being out of the Owner’s control. The authors recommend another correction factor that applies a maximum to the number of days’ worth of CO2 emissions while waiting that apply to the CII calculation. For example, if a vessel sits at anchor waiting for the cargo terminal to be ready for ten days, perhaps only the first three days’ worth of CO2 emissions while at that anchorage should count towards the CII calculation for that voyage.
EXPLORE MORE AT BLUE SKY’S REPORT ON CII
