Vessel owners that restrict operations to maintain
a high IMO Carbon Intensity Indicator (CII) rating may create demand for less
efficient vessels on challenging routes, say shipping experts at SMM.
regulation kicks in as of January 2023 and retroactively calculates
the grams of CO2 emitted per cargo-carrying capacity and nautical mile over a
year’s operations, which is used to determine the CII vessel grade. It is
expected to create commercial demand for vessels that can demonstrate their
green carbon credentials.
Companies with high profile ESG reporting (such as
IKEA, Walmart and Amazon) are expected to insert clauses in charter contracts
that will require the use of vessels with better CII ratings. However, industry
figures told ICS that operating conditions, including sea state, weather
conditions and wait times at port or anchorage have a significant impact on CII
ratings, despite the vessel itself performing efficiently, which would mean
that certain routes are predisposed towards lowering the rating of a vessel,
explained a release.
Georgios Plevrakis, ABS Vice President of Global Sustainability, has already
noticed an increase in concerns amongst the shipowner community, particularly
with regard to vessel value. “Since CII is an operational measure, it is not
within the control of the owner at all, but more by the operator or charter,”
he told ICS. Charter clauses, he continued, are likely to require a vessel to
be returned to owners with the same CII rating as when the vessel was
contracted out. Owners planning to refinance or sell their vessels are also
likely to place caveats in their operations since lower ratings will limit financial
There are concerns that these restrictive factors
may limit vessel availability, particularly in the spot market, and boost
market demand for vessels with lower CII ratings to cater to more challenging
routes – particularly since there is no requirement for vessels to implement
their approved Ship Energy Efficiency Management Plan (SEEMP).
routing may also change in response to CII ratings, particularly if fuel prices
drop, as longer routes can improve the ship rating.