Following last month’s Marine Environment Protection Committee (“MEPC”) 75 meeting at the International Maritime Organisation (“IMO”), draft regulatory amendments to cut the carbon intensity of existing ships were approved. The amendments build on regulations already in force and make mandatory certain energy efficiency requirements as part of the IMO’s aim to reduce greenhouse gas (“GHG”) emissions from shipping. This bulletin sets out some key highlights from MEPC 75 and the expected practical effect these will have on the shipping industry.
Highlight: IMO approves new measures to reduce GHG emissions
A dual approach has been taken with the new amendments, which seek to regulate both the technical and operational workings of the ship. First, the technical requirement to reduce carbon intensity will be based on a new “Energy Efficiency Existing Ship Index” (“EEXI”). Secondly, the operational carbon intensity reduction requirements will be based on a new “Carbon Intensity Indicator” (“CII”). The Ship Energy Efficiency Management Plan (“SEEMP”) remains mandatory, although enhanced requirements relating to content, approval and audits have been introduced.
The EEXI will apply to all vessels above 400 GT falling under MARPOL Annex VI in a similar way to the already-familiar Energy Efficiency Design Index (“EEDI”) - currently only applicable to newbuildings - and will be verified by a new Energy Efficiency Certificate. Although the formula is already a recognised concept for many shipowners, the new requirement will prove a challenge for some ships and may require engine power under normal conditions to be reduced in order to bring ships into compliance.
The CII applies to all cargo and cruise ships above 5,000 GT, and will result in the ship being given an annual rating between A-E. The rating thresholds will be increasingly stringent towards 2030, with any underperforming ships (i.e. a D rating for three consecutive years or an E rating in a single year) being required to develop a corrective action plan as part of its SEEMP. The overall ambition in IMO strategy is 40% improvement of CII compared with 2008 levels, across all ships.
By 1 January 2023, an approved onboard SEEMP will be required for all ships above 400GT and the implementation of the SEEMP will be subject to subsequent audits. Mandatory content will apply for ships above 5,000GT, including the method for calculating annual CII and the plan for correcting this to improve the ship’s rating year on year.
The amendments are expected to be adopted at MEPC 76 in June 2021 with entry into force on 1 January 2023. That is not a long way off - ship owners do not have a lot of time to collate the necessary data to ensure EEXI certification or to be in a position where they can commit to a plan of continuous improvement in the reduction of GHGs and emissions under the CII regime. In light of this, many industry bodies are urging their members to act as soon as possible.
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