21-22 January 2025 sees the Royal Institution of Naval Architects (RINA) host its second annual Managing Carbon Intensity Indicator (CII) And Associated Challenges conference, taking place at IMO HQ in London, UK.
The CII is a new mandatory rating measure for ships, developed by IMO during the 2020-21 COVID pandemic, which formally came into effect on 1 January 2023. The CII aims to measure the carbon efficiency of ships and to assess their relative carbon emissions performance. Based on this data, each ship receives a grade between A and E; ships with better grades, such as A and B, are recognised as being more fuel-efficient and producing fewer emissions, while ships with ‘bad’ grades, such as D and E, will need to prepare a plan of corrective actions.
While the CII was born of good intentions, the initiative, as it stands, is somewhat flawed – and was developed far too hastily, argues Edwin Pang, chair of RINA’s IMO Committee and founder of Arcsilea, who will participate in a panel discussion on the regulatory pros and cons of the CII on the opening day of the conference. Moderated by Dimitris Monioudis, chairman of the Intercargo Technical Committee, the panel will also include Andy Wibroe (Lloyd’s Register) and Nimia Willems (Liberian Registry) and will discuss implementation plans, data reporting, audits and potential improvements related to the CII.
CII: too rushed?
Pang tells The Naval Architect: “You will often hear criticism that IMO moves very slowly, but CII was developed from scratch, under extreme time pressure, during the pandemic, and that’s partly why it’s unsatisfactory. Developing a data-based regulation from scratch is no small matter, never mind a regulatory framework that will govern in detail the operational choices of a critical mode of international transport that’s the primary vector for world trade. Additionally, to give it the force of law, you need to give countries time to write the legislation – and that whole transcribing process takes time. Shipowners also need time to prepare, perhaps schedule drydocks or install equipment.
“CII was developed based on data that was submitted for the first time to the IMO data collection system [DCS], though, arguably, the data collected by the DCS was not originally intended to be used in this way. One of the quirks of the system is that only parties to MARPOL Annex VI have access to an anonymised form of the data – so, during the development of CII, the industry could not access their own data for analysis, while countries that had access to the data did not have the resources to analyse the data.”
“We have this enormous repository of data,” he continues. “This is nice in theory but poses a bit of a problem: the people affected by the data can’t check it or analyse it. Now, you have this weird situation where the shipowner organisations must collect their own data from their members and do the analysis themselves, even though this data is already collected elsewhere. The process is very time-consuming and expensive; the amount of analytical resources you have to pour into this is substantial. We talk a lot these days about data and digitalisation, but it’s not clear that the regulatory system has fully caught up.”
What’s in a rating?
There is also the fact that the CII’s ship grading system itself can be imprecise and misleading. “The A-E vessel rating isn’t always representative of the ship’s efficiency,” Pang says. “The CII works a little like the miles per gallon [MPG] readout on your car. If you go on a long journey on a flat road and maintain a reasonable speed, you’ll get a very good MPG reading. If you drive in traffic in a built-up city, and are constantly stopping and starting, braking and accelerating/decelerating, your MPG reading will be bad. You can’t fairly compare the MPG of two cars, even if they’re the same model, if they’re driven in completely different conditions.
“It’s similar for vessels. If two ships of the same type are operating in the same region, and doing the same things, making a CII data comparison is valid. But there are lots of scenarios where the Indicator doesn’t provide the full story. Giving a vessel an E rating doesn’t necessarily mean the vessel is inefficient – for example, it could have been on a trade where it had to wait a significant time for a berth, or it may have been stuck somewhere due to geopolitical tensions.”
Pang also points out that the CII denominator is based around ‘distance’. Effectively, then, while main engine fuel consumption (providing the vessel’s propulsive power) is somewhat proportional to distance, generator fuel consumption does not contribute to distance at all. A vessel could therefore perform well when transiting from one port to another but may be penalised through its hotel load consumption: this would result in a poor-letter grade, even if it was operated efficiently during the sea passage.
Even if the CII-generated vessel gradings are accurate, and the ship has attained a statement of compliance, it is difficult to assess and check shipowners’ plans of action for improved energy efficiency. “If an owner says, ‘OK, I’m going to boost my rating by slowing down for half of my voyages”, what is ‘slowing down’, exactly? And relative to what?” Pang underlines. “An owner can demonstrate that they’ve adopted weather-routing tech, but you’d have to do a huge amount of detective work to check that the owner diverted on the routing app’s advice – and they may have excuses for why they didn’t follow the app’s advice at certain times. It’s very difficult to prove anything.
“If a ship is rated E, the owner is supposed to submit a plan of corrective actions showing how they’ll get back to at least C within 15 months – they have to submit this plan by the end of the April the year after they’ve got the data. The problem is two-fold: nobody actually checks that the owners are doing what they said they would do in the plan of corrective actions. Theoretically, there is an audit requirement, but this isn’t linked to any certificates – for now. This is something we need to address. Secondly, ships rated A-C can ‘back-slide’ to lower ratings without penalty or consequence – as they may well do, because the nature of ship operation is that you encounter weather or different operational conditions.
“Overall, the enforcement regime is very weak. If your ship is rated D for three years, you have to do the same as E-rated vessels, in drawing up a plan of corrections – but an owner can keep the vessel in D for two years, then change routes or make operational changes in the third and final year to get it out of D.”
Two days of debate
These and many other concerns surrounding CII will be tackled at the January conference, which has been divided into various topics.
The first day will see an emphasis on coatings and data. It is well-known that the application and maintenance of coatings and anti-foulings can have a significant impact on reducing hull drag. The coatings session will include presentations from Yigit Kemal Demirel of Hempel and Ralitsa Mihaylova of Safinah Group. The data sessions will include presentations from Peyman Ghaforian Masodzadeh of World Maritime University and Ivana Melillo, GNV; the latter focusing on how monitoring and analysis enhanced the efficiency and quality of data collection aboard a Ro-Pax.
Day Two begins with a session on wind assistance, with presentations from Konstantinos Fakiolas (FINOCEAN) and Simone Saettone (bound4blue), analysing how WASP-fitted ships can boost their CII ratings, and looking at the benefits of incorporating weather-routing technology into vessel ops. The final session is dedicated to metrics and will include input from IMO representative Camille Bourgeon (technical officer, subdivision for protective measures, Marine Environment Division), Chris Waddington from the ICS and John Hatley from Maritex.
The latter presentation would appear to back up Edwin Pang’s aforementioned concerns, with Hatley aiming to “illustrate existing flaws within the CII, as charterer operational decisions dominate environmental outcomes where technical features are relegated to secondary roles”. Hatley adds: “The inherent CII problem for vessel owners is they are not in control of vessel movements when duty bound to obey charterer commands. This then punishes ships by saddling them with poor CII grades – not due to technical shortcomings of the ship, but rather due to the operational trading patterns [short versus long voyages, extensive waiting time, et al.] required to meet charterer orders.”
IMO’s next step is to conduct a review of the CII before 1 January 2026. Changes to the current status of the CII are to be expected, though these will largely depend on industry feedback and participation – making the January conference an important platform to debate the best means of overcoming the challenges that this new, data-heavy regulation presents.
Register here for the 2025 Technical Conference on Managing CII and Associated Challenges now to be part of this critical industry discussion