INTERCARGO Calls for Urgent Review of Carbon Intensity Indicator, Citing Unintended Consequences

The International Association of Dry Cargo Shipowners (INTERCARGO) has submitted proposals to the International Maritime Organization (IMO) urging a review of the Carbon Intensity Indicator (CII) system. The call comes ahead of the 82nd session of the Marine Environment Protection Committee (MEPC 82), scheduled for September 30 to October 4 at the IMO Headquarters in London.

The Carbon Intensity Indicator (CII) is an IMO instrument to measure and improve ships’ operational carbon efficiency. It rates ships from A (best) to E (worst) based on annual reduction factors. Poor-rated ships may need corrective actions like hull cleaning or speed optimization. Ships can also use low-carbon fuels to improve ratings. Incentives are encouraged for high-performing ships.

INTERCARGO’s proposal is based on extensive studies analyzing data from over 5,600 bulk carriers. The studies revealed several key issues with the current CII system, including the negative impact of idle time on ratings, particularly for smaller vessels, and potential perverse incentives that could lead to increased emissions.

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Dimitris Monioudis, Vice-Chair of INTERCARGO’s Technical Committee, emphasized the thoroughness of their analysis: “Our proposals are grounded in a comprehensive examination of verified IMO Data Collection System data from 2022. This wasn’t just a cursory review – it involved meticulous analysis of over 5,600 bulk carriers, conducted in collaboration with three major classification societies: ABS, Bureau Veritas, and DNV”.

INTERCARGO Chairman Dimitris Fafalios highlighted the potential unintended consequences of the current system: “The current CII framework, while well-intentioned, may be leading us down a path which contradicts our ultimate goal of reducing overall emissions. We’re seeing situations where ships might actually increase their total emissions to improve their CII rating”.

To address these issues, INTERCARGO has proposed that the IMO review and adjust the CII to better reflect a vessel’s true energy efficiency and implement a system that further incentivizes overall greenhouse gas emission reduction.

As the shipping industry grapples with the challenge of reducing its carbon footprint, this call for review highlights the complexity of implementing effective environmental regulations. The outcome of the MEPC 82 session could have significant implications for the future of maritime emissions control strategies.