INTERCARGO: CII cannot be used to achieve desired decarbonisation goals

The International Association of Dry Cargo Shipowners (INTERCARGO) has joined the critics of the Carbon Intensity Indicator (CII) framework voicing opposition to its use as a benchmark for medium-term measures as part of the IMO’s revised GHG Strategy.

INTERCARGO said that its members expressed their belief that CII cannot be used to achieve the desired decarbonisation goals under real-life operating conditions as it would not deliver equitable, transparent, and non-distorting emissions reductions.

Under the CII rating scheme, set to enter into force in 2023, ships will be designated with different ratings based on their efficiency ratio, which measures distance traveled, speed as well as the intensity of the use of the vessel.

This will highly depend on how a ship is traded, which is largely dictated by a ship’s charterer.

As a result, the rating scheme has been under massive fire as factors that are out of shipowners’ and vessels’ control will have a significant adverse impact on a vessel’s CII rating.

They can include adverse weather, voyage distance, port waiting times, port infrastructure, and charterers’ orders.

“Paradoxically when considering voyage distances and port waiting times, vessels with longer travel distances can produce more emissions but have a better CII rating when compared to vessels travelling shorter distances and producing less emissions,” the association said.

“INTERCARGO does not, therefore, believe that CII, in the current format, would achieve the desired decarbonisation goals or targets. While generally supportive of the operational short-term measure, there are significant flaws that need to be addressed in order to make CII fit for purpose.”

Commenting on the IMO’s decarbonization ambitions, the association said that it supports the ambition to achieve net zero-emission shipping by 2050. However, for this goal to be achieved the industry needs alternative zero-carbon fuels.

“The responsibility for decarbonisation cannot be placed solely on the shoulders of the ship operator at the end of the line – it is a challenge that must be dealt with holistically by the entire shipping industry,” INTERCARGO pointed out.

“It is essential that appropriate policies are included in the Revision of the International Maritime Organization (IMO) GHG Strategy to ensure that green fuels are secured as well as the necessary infrastructure to ensure availability and bunkering in ports around the world. Unfortunately, these aspects are not sufficiently discussed and addressed despite their critical role.”

INTERCARGO believes that a flat rate contribution per tonne of CO2 emitted on a Tank-to-Wake (TtW) basis – and subject to the outcome of the ongoing discussions at IMO on fuel emissions’ Life-Cycle Assessment (LCA) – should be combined with an International Maritime Sustainability Funding and Reward (IMSF&R) mechanism where ships of 5,000 GT and above will make an annual contribution per tonne of CO2.

Under such a scheme only ships that use ‘eligible alternative fuels’ would receive a reward for CO2
emissions prevented.

A combination of technical and economic measures should be accompanied by appropriate policies and commitments from the Member States, in order for fuel suppliers to secure the required alternative fuels in ports around the world in sufficient quantities.

The International Maritime Organization (IMO) has been under growing pressure to increase its GHG emission reduction targets as well amid concerns that the current objectives are too weak to accelerate the sector’s transition to a greener future and cut overall emissions.

All eyes are being set on the upcoming revision of the IMO’s GHG Strategy set to be adopted in spring 2023. Some groundwork is expected to be laid at the ongoing intersessional GHG working group (ISWG-GHG 13) taking place from 5-9 December and the 79th session of the Marine Environment Protection Committee (MEPC)  from 12-16 December 2022.

ISWG-GHG 13 will see member states and international organisations debating the level of ambition for the revised IMO GHG strategy, along with discussions on the implementation of a combined technical and market-based measure (MBM) as part mid-term measures.

At MEPC 79, the Committee is expected to come to a decision on the global GHG target as part of the revised strategy. Whilst many are supportive of absolute zero emissions by 2050, other delegations still view this as premature, therefore it remains to be seen what conclusion will be drawn from the discussions.