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Not since the introduction of the global sulphur cap at the start of the decade has an International Maritime Organization (IMO) regulation attracted such criticism as the Carbon Intensity Indicator (CII).
Six of shipping’s top organisations have issued a joint industry policy statement this week on how the CII can be tweaked, the latest in a slew of recommendations for the controversial legislation.
The CII, which came into effect on January 1, 2023, is a measure used in the maritime industry to assess and track the carbon emissions of ships, measuring a ship’s emissions per ton-mile or per passenger-mile. Ships are rated from A to E in a way similar to how energy efficiency in household appliances are measured.
BIMCO, the International Chamber of Shipping, INTERCARGO, INTERTANKO, and the global association for cruise lines have issued their joint take on CII’s inadequacies this week as the regulation comes up for review soon.
With the CII ratings now delivered from flag states to shipowners, the six organisations questioned the CII’s accuracy and reliability.
The shipping bodies argue that 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 works against its intended purpose of supporting our collective objective of reducing GHG emissions across the maritime industry,” the joint release stated.
The IMO’s Marine Environment Protection Committee (MEPC) at its 81st session in March 2024 publicly acknowledged 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 shipping bodies 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 amendments to the CII.
The organisations have also called for public administrations, flag states, ports, and destinations to acknowledge that the current CII system has inherent shortcomings recognised by the IMO and may not accurately reflect the true environmental performance of ships.
The CII review process will take start at the MEPC in September, continuing through to December 2025.
CII has proven to be one of the IMO’s more controversial regulations, coming in for fierce criticism over the past couple of years.
Writing for Splash, Mikael Laurin, head of vessel optimisation at Yara Marine Technologies, noted: “There can be no doubt that the CII is a flawed index for its original purpose, which is rating the operational efficiency of vessels. The loopholes and countless unintended consequences of its framing are the talk of the shipping industry. Many acknowledge that the most obvious flaw is the failure to consider a vessel’s actual cargo load, resulting in a better rating for vessels that cover distances and create emissions without directly contributing to world trade. This flaw can be traced back to the fact that data on actual cargo load was omitted from IMO’s Data Collection System.”
Germany’s largest dry bulk operator Oldendorff Carriers released a detailed study into CII’s flaws, weeks ahead of the regulation coming into force.
“The CII formulas in the regulation are not holistic, can be gamed and there are many real-world instances where strict adherence and focus on the CII rating letter grades will do more damage than good,” Oldendorff stated.
“CII will distort trading patterns and could lead some vessels to emit more CO2 than they would have prior to the regulations in order to chase a rating,” shipbroker Gibson warned in a report looking at the potential unintended consequences of this green legislation.
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