A vessel that has been berthed for 192 days is emitting very limited amounts of CO₂, but the long inactivity is nonetheless punished hard by the International Maritime Organization’s (IMO) upcoming climate regulation, CII.

The result is the worst possible CII rating, according to a concrete example in a new report presented to the IMO’s climate committee, MEPC.

The report has been submitted by shipping organizations the International Chamber of Shipping (ICS), Bimco, Intertanko, World Shipping Council (WSC), and Interferry, as well as Bahamas and Liberia.

Overall, the report documents what many stakeholders consider a paradox in the CII rules: If a vessel stays at port or sails many short distances instead of long voyages, shipowners are punished in their CII accounts.

The submitted example is based on nine tanker vessels with similar designs, operated by the same company and built at the same shipyard between 2007 and 2011. The only difference is the trade routes.

Tanker 1, the one who spends 192 days at berth, operates in the spot market, and the idle days are those in between charters. Efficiency in relation to cargo transportations is not included in the calculation.

The ship is given an E-rating, the lowest possible, which requires action in the form of a plan detailing how to improve the rating.

Vessel number nine, which does long voyages and has a 15-year-old design, gets a B-rating in the example. Simply down to the fact that it does not spend much time in ports, as long voyages mean fewer trips per year and less time at berth where the vessels still emit some CO₂ but do not sail any miles, which is the denominator in the CII equation.

These factors, port time and voyage length, are factors that cannot always be controlled nor corrected by operating more efficiently. A port can be overloaded, markets can be quieter, and voyage lengths are not always up to the shipowner.

”Because this study has compared sister ships that are operated by the same company, it is apparent that the significant differences in ratings are not attributable to the ship design or their efficiency of operation. As such, the study highlights some significant factors that affect the CII rating, for which no correction or adjustment is afforded, and over which the shipowner/operator has no control,” reads the report.

A change is needed

Ahead of the CII regulation coming into force on Jan. 1, 2023, ShippingWatch has examined how the rules will impact the industry.

Here, several carriers have called for an alteration of CII.

German container carrier Hapag-Lloyd recently said that they expect the calculation method behind CII, the annual efficiency ratio (AER), to be amended so it is more efficient and thus creates ”sensible results”. The company has also pointed to the paradox that idle ships, emitting very little CO₂, will be given the worst rating.

Most recently, the world’s largest container line, MSC, has joined the choir and demanded an alteration of the regulation with reference to unfair punishment of inactive ships.

”As many across academia and industry have said, the calculation methodology (AER/DWT) should be revised to avoid unintended consequences that would distort the performance of a ship that spends a lot of time in port,” states MSC, as reported by ShippingWatch earlier today.

From ship to truck

According to the report, another side effect of the CII regulation could be that ships are replaced by trucks on shorter voyages, as vessels used for such voyages are likely get a bad CII rating due to their operational profile and many port visits.

”If ships are penalized for undertaking short sea passages, there is a risk of a modal switch to road transport. On a per tonne/mile basis shipping is a more fuel-efficient mode, and hence why switching would result in increased CO₂ emissions,” the report reads.

The organizations further state that it would lead to increased costs in coastal areas relying on this type of shipping, and that forcing a switch to trucks is not the objective of CII and that outcomes like these ”should be avoided.”

Rational, fair and robust

The players behind the report agree with global container carriers that changes ought to be made.

In fact, it has been suggested before.

In the report, the submitters write that corrections have been suggested for both the waiting time in port and the short voyages, but that the Correspondence Group on Carbon Intensity Reduction rejected both.

”The document referenced in the annex to this document further highlights the importance of adopting these key elements, if a rational, fair and robust CII system is to be achieved,” reads the report, while referring to the Blue Sky Maritime Coalition’s white paper.

Although the example in the paper is based on tankers, the report refers to a recent study on 700 container ships, whose CII ratings would be affected by waiting time at ports as well, similar to every other segment.

The example shows that 34 container vessels would be degraded from D to E as a result of the port waiting time alone.

MSC demands changes to CII: Rules punish at random and will reduce fleet capacity

Hapag-Lloyd calls for alteration as CII ”does not make sense”

Shipping professor about CII: “It’s an irrelevant piece of regulation”