"IMO 2023” AND THE MARITIME SECTOR'S PREPAREDNESS TO COMPLY

The International Maritime Organization will bring into force "IMO 2023” regulation to further cut down carbon emissions from maritime transportation. This will take effect on January 1, 2023, and follows the 2020 ratification that imposed a stringent sulphur fuel emission directive. IMO 2023 is the latest set of regulations imposed by the IMO on global shipping that aims to implement measures to improve the safety and security of international shipping and reduce marine pollution from ships.

While IMO 2020 targeted the reduction of sulfur in maritime fuel, IMO 2023 is an attempt to further reduce carbon emissions by ocean shipping, by adopting the Energy Efficiency Existing Ship Index (EEXI) and the Carbon Intensity Indicator (CII) rating regulations.

The original IMO Greenhouse Gas (GHG) strategy intends to reduce the carbon intensity of international shipping by 40% in 2030 and by 70% towards 2050 compared to the baseline level of 2008. This new regulation is a part of that strategy.

The Energy Efficiency Existing Ship Index (EEXI) and the Carbon Intensity Indicator (CII) assessment system are two additional measures adopted by IMO 2023. These are in effect a technological and operational approach towards addressing maritime pollution.

Based on a vessel’s technical characteristics, the EEXI is a mandatory energy efficiency score. Ships must adhere to efficiency guidelines for carbon production based on their size and capacity, similar to guidelines applicable to cars. The ship's specifications, and not its operating performance, constitute the basis of the EEXI. Ships that are not compliant must modify their systems or engines to become compliant. After January 1, 2023, EEXI will be evaluated during the International Air Pollution Prevention Certification survey.

The CII is a graded score of carbon emissions in relation to the cargo transported and distance travelled. Beginning 2023, ships will be given an annual grade based on their carbon dioxide emissions, ranging from A, which represents a rating of “good” to E which denotes “poor”. Ships that receive three D grades or one E grade must implement a corrective action plan. Slowing the ship's cruising speed is currently the best tool ship operators can implement to achieve a better grade.

Potential impact:

EEXI and CII both have the potential to have a negative impact on shipping capacity, with EEXI requiring vessels to idle while undergoing improvements and CII motivating carriers to slow steam. Only 30% of the container fleet will be EEXI compliant by 2023, according to consulting firm BV.

“D” or” E” CII rating levels are currently being maintained by 70% of 10K–14K TEU vessels, 35% of 14K–18K TEU vessels, and 29% of 18K+ TEU vessels. These are the primary ships that travel the shipping routes between Asia and the US and Asia and Europe. There is also no statement about the enforcement of either of these two measures, other from the CII corrective action plan. The new rules are likely to impact feeder services that employ older vessels.

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Note:
This blog’s facts & figures are sourced from: https://info.expeditors.com/horizon/international-maritime-organization-2023