Understanding new IMO decarbonization measures: EEXI and CII

The International Maritime Organization (IMO) has established new targets to reduce CO₂ emissions (per transport work): a 40% decrease by 2030 and 70% by 2050, compared to 2008 levels. They also set targets for annual greenhouse gas (GHG) emissions from international shipping, stipulating a 50% reduction by 2050. Two associated IMO indexes—EEXI and CII—have been established to provide shipowners with a reference point to reduce their levels and get on course to meet targets.

EEXI - Efficiency Existing Ship Index

A result of the 2020 Marine Environmental Protection Committee (MEPC) 75 meeting, this new index is scheduled to come into force on January 1, 2023. The EEXI is like its predecessor, the Energy Efficient Design Index (EEDI)—in effect since 2013—but applied to existing ships outside EEDI regulations. It specifically targets vessels above 400 GT that fall under MARPOL Annex VI.

To set CO₂ emissions standards, the EEXI uses the same methodology as the EEDI. Carbon emissions are described per cargo ton and mile; they determine standard CO₂ emissions related to installed engine power, transport capacity and ship speed. The standard emissions are a function of fuel oil consumption, the main engine’s and auxiliaries’ installed power, and a conversion factor between fuel and the corresponding CO₂ mass.

CII - Carbon Intensity Indicator

MEPC 75 also gave rise to the Carbon Intensity Indicator, applicable to in-service ships over 5000 GT. These vessels will be required to quantify and report on carbon emissions from operations. The CII provides ship operators with the factor by which they must reduce CO₂ emissions annually to ensure continuous improvement and comply with regulations. The Carbon Intensity Indicator must be implemented within each operator’s Ship Energy Efficiency Management Plan (SEEMP). The SEEMP is a mandatory, ship-specific document that lays out the plan to improve a vessel’s energy efficiency in a cost-effective manner.

The CII will most likely be based on the Annual Efficiency Ratio (AER), which is also used in the Poseidon Principles. There is also the possibility that the CII will be instead based on the Energy Efficiency Operational Index (EEOI), which factors actual deadweight loaded into the vessel (compared to the AER’s focus on design deadweight).This will be decided upon at MEPC 76.

Decarbonization: key to meeting targets

The purpose of these new IMO ratings is to steer ships closer to Paris Agreement targets. Once it comes into effect in 2023, the CII will be used to rate ships on a 5-grade scale: A, B, C, D and E—from best- to least-performing. Ship design upgrades or significant operational improvements will be required of any vessels receiving a “D” rating three years in a row or for vessels receiving a grade of “E” during any annual review. As a result, shipowners and managers must determine their vessels’ carbon intensity profiles and optimize their SEEMP by the end of 2022.

The impact of EEXI will depend on the vessel type. Approximately 70% of post-EEDI ships are expected to be compliant “as is.” Outlined below is expected EEXI compliance by vessel type:

• Bulk: 60%
• Tankers: 70%
• Container ships: 30%
• Gas Carriers: 55%
• LNG carriers (without steam turbines): 100%
• Cargo ships: 80%

Pathways to compliance: techniques and technologies

Shipowners who must reduce their vessel emissions and improve fuel consumption have several options for both technical and operational improvements. These include:

• Optimizing operations
• Reducing speed
• Retrofitting vessels with energy-efficient technology
• Innovative propulsion techniques (e.g., wind assistance)
• Switching to green, low-carbon fuels

Air lubrification systems and wind-assisted propulsion are already in use on new­ and existing ships. There are also advances being made for use of carbon-free fuels such as ammonia and hydrogen. While their application is not yet feasible on a large scale, these fuel technologies are progressing and on the horizon.

To achieve EEXI compliance, ships can undergo a preliminary assessment, then earn a statement of compliance upon approval of preliminary technical files. Verification of the ship’s EEXI takes place at the first annual, intermediate or renewal survey for its International Air Pollution Prevention (IAPP) certificate.

For CII, owners and managers must determine ships’ carbon intensity profiles and develop an optimized SEEMP by the end of 2022.

Together, the EEXI and CII help cultivate a mindset of continuous improvement among stakeholders. With such a mindset, shipowners can implement major and minor modifications over time to ultimately drive down onboard carbon emissions.

BV Solutions M&O provides comprehensive services to support compliance with the EEXI and CII. We employ proven methods to perform preassessments for EEXI and CII calculations. Our technical experts also help shipowners fully comprehend their scores.

After the initial assessment, we work with clients to identify the most appropriate technical and operational improvements for their ships. This involves simulations to predict vessel performance associated with different design modifications and operational changes (such as slower speeds or optimized weather routing). Once a plan is established, we help ship owners implement that plan, integrating innovative technologies onboard as required to achieve compliance.