In the vast ocean of the maritime industry, navigation relies heavily on compliance with regulatory markers. These regulatory buoys are critical to ensuring safe and responsible shipping practices. And, just like changing currents, these regulations evolve over time. Three particular regulations on the horizon are the Corporate Sustainability Reporting Directive (CSRD), the Energy Efficiency Existing Ship Index (EEXI), and the Carbon Intensity Indicator (CII). This primer will examine their impact on the maritime industry and offer strategies for sailing smoothly through these shifting regulatory waves.
Understanding the Regulatory Wave
Navigating in the maritime sector is more than just understanding currents. It’s about understanding the international regulatory tides that govern the industry. The shifting tide of today’s regulatory environment is driven by a larger global wave: climate change. Our oceans are both defenders against and victims of this global crisis. Rising emissions and temperatures put the maritime industry under scrutiny, demanding improved efficiency and transparency. The recent initiatives of CSRD, EEXI, and CII represent conditions set by regulators to address these issues.
Dearth in the Sea of Regulation: CSRD, EEXI, CII
The CSRD is an initiative by the European Union that demands increased transparency and accountability from large businesses. Its impact on the maritime sector is profound, compelling shipping companies to make annual disclosures about their environmental, social, and governance (ESG) performance. In essence, CSRD holds corporations accountable for their contributions to climate change.
The EEXI, meanwhile, assesses the energy efficiency of existing vessels. Rather than only focusing on newly constructed ships, EEXI scrutinises the performance of the existing fleet. It will compel vessel owners to meet strict carbon emission constraints, which will directly affect the shipping industry’s operations and costs.
Then we have the CII, introduced by the International Maritime Organization (IMO) to address shipping industry-specific carbon emissions. Unlike other measures, CII evaluates carbon emissions concerning ship operation, urging vessel owners to revise operations for better environmental performance.
What is a Carbon Intensity Indicator rating?
A Carbon Intensity Indicator (CII) rating evaluates a ship’s carbon emissions relative to its transport work. The rating is part of the International Maritime Organization (IMO)’s greenhouse gas (GHG) emissions strategy aimed at promoting a more energy-efficient and environmentally friendly maritime sector.
How will the new ratings work?
Ships will receive a CII rating from A to E, with A being the most energy-efficient and E being the least. Shipowners are required to submit an annual fuel consumption report with supporting data that indicates the ship’s efficiency. These ratings will be publicly available through a database, encouraging competition and transparency in the maritime sector.
Head to Head with Competitors: Comparing Regulatory Approaches
Different businesses and nations have taken a variety of approaches to adapt to these regulatory waves. For instance, some are going above and beyond, investing in new technologies and real-time reporting systems that go beyond the minimum requirements. But there are also companies facing significant challenges, such as how to accurately quantify and reduce Scope 3 emissions. Such discrepancies sharply illustrate how these new regulations will test resilience and adaptability on a worldwide scale.
Role of Technology in Meeting Regulatory Compliance
In all of this, technology stands as a beacon of light guiding the journey towards regulatory compliance. Accurate emission monitoring and reporting can help shippers meet CSRD requirements, while advanced route optimization and data-driven insights can assist vessel owners in achieving EEXI and CII thresholds.
Milestones and Timeline for Compliance
Laying out a clear path towards compliance, especially in the maritime industry, is crucial. Each of CSRD, EEXI and CII come with critical dates that shipping companies must mark on their regulatory calendars. Understanding these milestones is the first step towards compliance.
Support for Developing States and Countries
Developing states, especially Small Island Developing States (SIDs) and Least Developed Countries (LDCs), face unique challenges in the face of these new regulations. That’s why support mechanisms have been put in order to aid these nations in meeting these global standards.
How do the measures fit into IMO’s decarbonization strategy?
The CII is an integral part of the IMO’s Initial Strategy on the reduction of GHG emissions from ships. The goal is to reduce carbon intensity by at least 40% by 2030 and at least 70% by 2050, compared to the 2008 baseline. The CII ratings aim to push the shipping industry towards improving their vessel efficiency and overall emission footprint.
How will the impact of the new regulations be assessed?
The IMO will track progress on its decarbonization goals through regular assessments using the data collected from the annual fuel consumption reports. The IMO may adjust future regulations accordingly based on the progress made by the shipping industry and the effectiveness of the CII and other measures in reducing emissions.
Looking to the horizon, the maritime sector has a challenging but promising journey ahead. The IMO’s Decarbonization strategy will continue to mold the industry’s future, with more emphasis than ever on finding new, alternative fuels for ships and more robust measures for GreenHouse Gas reduction.
How can Greensee help with CII tracking
In conclusion, the maritime industry is on the precipice of a regulatory sea change. It is a call for every one of us in the maritime industry to steer the helm towards sustainability and set sail into this new era of corporate accountability, efficiency, and transparency.
The current IMO regulation provides that for ships equipped with reefer electrical consumption monitoring, the actual reefer container electrical energy can be deducted from CII.
When vessels are not equipped with reefer electrical monitoring, the reefer electrical energy is calculated with the following formula :
So, which is best ? will investing in reefer electrical monitoring improve CII ? for which vessel ?
Greensee can help you estimate reefer energy on board vessels, and let you decide if setting up vessels with electrical monitoring is cost effective or not.
Based on reefers numbers and set temperature Greensee estimates the reefer energy, with 95% accuracy, by vessel, by trip, so you decide which vessels are worth setting up with electrical monitoring.