Six major shipping organisations (BIMCO, CLIA, INTERCARGO, INTERMANAGER, ICS, and INTERTANKO) have issued a joint statement expressing their concern over some flaws of the Carbon Intensity Indicator (CII) regulation.
With the IMO’s initial Carbon Intensity Indicator (CII) ratings delivered from Flag States to shipowners, organisations have noted the CII scheme’s inadequacies. Thus, they will continue to work to ensure a CII methodology that is accurate, reliable, and implemented in a manner that fully reflects the intent of the IMO Strategy for the world’s fleet of commercial ships.
To achieve the IMO’s intent, the CII scheme must reflect the true efficiency rating for each ship. A one-size-fits-all instrument, as the CII is currently designed, has inherent flaws that work against its intended purpose of supporting our collective objective of reducing GHG emissions across the maritime industry, the organisations explain.
In simple terms, the Carbon Intensity Indicator (CII) is a measure of how efficiently a ship transports its cargo. Based on this, the ship is then given an annual rating ranging from A to E:
A – major superior performance level
B – minor superior performance level
C – moderate performance level
D – minor inferior performance level
E – inferior performance level
The rating thresholds will become increasingly stringent towards 2030, with the carbon reduction factor starting from 5% in 2023. After this, 2% will be added yearly. A ship rated D or E for three consecutive years will need to submit a corrective action plan explaining how the performance level can be increased.
The IMO’s Marine Environment Protection Committee (MEPC) at its 81st session in March 2024, publicly acknowledged significant concerns raised by IMO Member States and industry, recognizing “shortcomings and unintended consequences of the CII mechanism and the general agreement that these concerns should be fully considered and addressed during the CII review process.”
The IMO MEPC further noted that possibly inaccurate or misleading CII ratings could result in unintended adverse consequences for some ships, particularly with respect to business-critical decisions made by the finance, insurance, chartering, brokering, and port sectors.
The organisations are calling on the IMO to amend the current CII system to avoid unintended consequences that are contradictory to reducing overall GHG emissions. Indeed, the IMO has already received 78 proposals submitted by every sector of shipping, also calling for amendment to the CII.
“In addition, we are calling for those who are considering the CII rating as a potential for decision making in the future to work closely with shipowners and flag administrators to determine whether the CII rating accurately reflects a ship’s environmental performance before making decisions,” said the joint statement.
The shipping industry will be part of the solution to these issues, and the signatories look forward to the commencement of the CII review process at the MEPC in September 2024, continuing through December 2025. The signatories will also propose revisions to the current CII methodology and formula that will provide a better indicator of a ship’s actual efficiency.
“We are also calling for public administrations, flag states, ports, and destinations to acknowledge that the current CII system has inherent shortcomings recognized by the IMO and may not accurately reflect the true environmental performance of ships,” the organizations conclude.
Download the policy document: CII Policy Statement
