Marine Green Wave Series: Part 2 - Key Regulations Accelerating Decarbonization

 

 

In our preceding article, "The Uncharted Waters: Understanding the Urgency of Maritime Decarbonization," we established the compelling 'why' behind the maritime industry's shift towards sustainability. It is now imperative to delve into the 'how' – the regulations that are the primary mechanism translating ambition into tangible action.

 

Deep Dive: IMO's EEXI and CII
 

The International Maritime Organization (IMO) is instrumental in setting the global regulatory framework for shipping emissions reduction. Two key measures implemented by the IMO are the Energy Efficiency Existing Ship Index (EEXI) and the Carbon Intensity Indicator (CII).

 

Explain EEXI
 

The Energy Efficiency Existing Ship Index (EEXI) is a one-time certification measure focused on enhancing the technical design efficiency of existing ships. It sets minimum energy efficiency requirements for ships, depending on their type and size. Shipowners must ensure their vessels meet the EEXI requirements. Common compliance methods include Engine Power Limitation (EPL), where the main engine power is reduced to decrease fuel consumption and emissions.

 

Explain CII
 

The Carbon Intensity Indicator (CII) is an operational measure designed to continuously improve the carbon intensity of ships. It assigns ships a rating from A to E based on their annual carbon intensity, with A being the best and E being the worst. This rating system creates a framework for assessing and comparing the operational efficiency of vessels. Poor CII ratings have significant implications for shipowners, potentially leading to corrective action plans mandated by authorities and commercial disadvantages, as charterers and customers increasingly prioritize greener vessels. The CII places continuous pressure on the industry to implement efficiency improvements in vessel operation.

 

Regional Impact: The EU ETS
 

Beyond global IMO regulations, regional initiatives like the European Union Emissions Trading System (EU ETS) are also playing a crucial role in accelerating maritime decarbonization.

 

Explain how shipping is included in the EU ETS
 

The EU ETS, starting its phase-in from 2024, now includes shipping. This means that shipping companies are required to account for their GHG emissions when operating within, to, and from EU ports.

 

Describe the obligation
 

Shipping companies are now obligated to surrender allowances corresponding to their verified emissions generated on voyages within or between EU ports. This creates a direct financial incentive to reduce emissions.

 

Discuss the financial implications
 

The EU ETS introduces carbon costs as a direct operational expense for shipping companies. This financial burden incentivizes emission reduction strategies and investments in cleaner technologies and fuels.

 

Other Regulatory Signposts
 

In addition to EEXI, CII, and the EU ETS, other potential future IMO measures are being discussed, such as a global carbon levy on shipping emissions and low-GHG fuel standards. Furthermore, initiatives like "Green Corridors," which are specific trade routes where zero-emission solutions are prioritized and supported, are also gaining momentum.

 

The Compliance Challenge for Shipowners
 

Shipowners face a significant challenge in navigating this complex and evolving regulatory landscape. Meeting these layered requirements necessitates strategic planning, substantial investment in new technologies, and significant operational changes.

 

Connecting Regulations to Technology
 

Meeting stringent CII targets and minimizing EU ETS costs often requires more than just operational tweaks. Advanced technologies that directly reduce fuel consumption and enable lower-emission operations are becoming essential. This is where solutions like high-efficiency marine batteries come into play, offering viable pathways to compliance. Marine batteries can be integrated into ship propulsion systems, auxiliary power systems, and energy management systems to optimize energy use, reduce fuel consumption, and lower emissions.

 

Regulations are actively reshaping the operational landscape of the maritime industry. The push for decarbonization is accelerating, driven by the IMO's mandates and regional initiatives like the EU ETS. In our next article, we will explore the technological solutions, particularly batteries, that help vessels navigate this new reality and achieve compliance.