MEPC81: Carbon Intensity Indicator: Demands for UN Shipping Body To Strengthen Efficiency Rules

Ahead of this week’s meeting of the International Maritime Organization’s Marine Environment Protection Committee (MEPC 81, March 18-22), the Clean Shipping Coalition is calling on the IMO to urgently step up ship climate action by improving its Carbon Intensity Indicator (CII), which would quantify and raise ship efficiency while fostering greater transparency and driving deep and lasting reductions in pollution.

“The IMO must revise its Carbon Intensity Indicator and agree on tough new requirements to ensure that ships improve energy efficiency year on year”, said Clean Shipping Coalition President John Maggs. “This is crucial for ensuring the lowest cost, most efficient energy transition and to incentivise shipping behaviour, such as slower speeds, that will also provide important ocean health co-benefits, such as cutting whale strikes and underwater noise, and other environmental improvements, such as reducing air pollution.”

“The CII is key for running ships efficiently, which is needed to deliver the lion’s share of IMO’s 2030 emissions reduction target”, said Jacob Armstrong, Shipping Policy Manager Transport and Environment. “Currently, the CII is not realising its full potential, but its revision, due to start at MEPC82 and conclude by 2025, is a key opportunity to bring it up to date with the IMO’s revised GHG Strategy and to make sure that in the future it works in a coherent way with the basket of mid-term measures (BoM) being negotiated at the same time.”

“From rapidly rising temperatures to more severe storms, the world – and in particular, the ocean – is already beginning to feel the impacts of climate change; and despite international commitments, we are fast approaching the global warming tipping point of 1.5C,” said Delaine McCullough, Shipping Emissions Campaign Manager at Ocean Conservancy. “Setting binding near-term emissions targets across industries is key to avoiding the worst of climate change. The shipping sector must not only participate in setting these targets, but demonstrate leadership with its ambition and innovations in using the power of the ocean to protect it. Only through improved efficiency and wind power will the IMO be able to hit its GHG reduction goals, and the CII is the tool that can drive these improvements in the most cost-effective way.”

“The CII should be seen as the IMO’s long-term tool specifically calibrated purely for improving and maintaining on-board operational efficiency and to suppress fuel burn to the greatest extent possible”, said Anaïs Rios, Shipping Policy Officer at Seas At Risk. “A strong CII would reduce demand for fuel – leading to immediate cuts in GHG emissions from fossil fuels, help avoid the wasteful and costly burning of expensive energy-intensive new zero-GHG emission fuels in the future and would drive the shift towards the kind of shipping change, e.g., slower speeds and more wind propulsion, that will minimise the cost of decarbonisation.”

The world needs new zero-GHG emission fuels but their use in shipping must be kept to a minimum because:

• The renewable electricity needed to produce them will take time to deploy at the scale needed to meet both shipping and wider climate objectives;
• The process is very energy intensive and renewable energy used to create ships fuels cannot be used to decarbonise other parts of the economy;
• New fuels will also pose a risk to the environment and seafarers;
• The shipping industry has wind energy at its fingertips, and is uniquely placed to exploit this free energy source by fitting sails and other new wind technology.

The revised CII must include:

• Requirements, that in combination with the BoM cut emissions by at least 30% by 2030 and 80% by 2040 and ideally put shipping on an unambiguously 1.5C compliant pathway;
• A new metric (e.g., MJ/t-nm) that cannot be met with alternative fuels and that focuses exclusively on improving operational efficiency and reducing fuel burn (leaving the GFS to regulate fuels uptake);
• An effective enforcement mechanism ensuring emission reductions are reliable and real;
• A long-term requirement that ensures continued future improvements in operational efficiency and no backsliding on operational efficiency gains;
• A focus on incentivizing and prioritising the use of energy efficiency measures that deliver significant benefits for ocean health.

“Along with the Carbon Intensity Indicator, a greenhouse gas (GHG) levy on ship fuel, such as the $150 proposal from Pacific Island countries and Belize, is essential to funding a just energy transition and ensuring no-one is left behind”, said Maggs.“An IMO GHG fuel or energy standard is also needed to incentivise the uptake of wind propulsion and ensure that future new fuels are available when required”.

The Clean Shipping Coalition is also calling on the IMO to take action on implementing:

• Global Fuel/Energy Standards: Clear, enforceable fuel/energy standards will catalyse the transition to clean energy. By incentivizing investment in wind power and zero-GHG fuels, these standards will reduce emissions and spur the creation of green jobs and resilient economies worldwide.
• Equitable Implementation of a Pollution Fee: Holding polluters accountable via a greenhouse gas emission levy, would ensure a just and equitable transition to clean shipping. The resulting revenue can be used to support vulnerable nations and ensure all can play a part in the energy transition.

Developed as an integral component of a set of IMO policies intended to drive greater energy efficiency of ships, the Carbon Intensity Indicator (CII) entered into force on 1st November 2022 and applies from the 1st January 2023 to all ships covered by the IMO Data Collection System.

The IMO’s revised Carbon Intensity Indicator (CII) will be central to the IMO’s ability to drive emission reductions on a pathway that meets the targets contained in its revised greenhouse gas (GHG Strategy) which commits the shipping industry to decarbonise by 2050 and aims to cut emissions by 30% by 2030 and 80% by 2040.The new GHG Strategy also contains a commitment to ensure a 5-10% uptake of zero emission fuels/energy sources by 2030.

As warming has already reached approximately 1.2C, early emissions reductions are especially important to avoid breaching the 1.5C threshold and to avoid triggering climate tipping points. Even assuming that a maximum of 10% new near-zero and zero-emission fuels are available by 2030 there remains a very significant “emissions gap” that must be filled by improvements in ship energy efficiency driven by the Carbon Intensity Indicator – and there is no other measure on the table that can do this.

If the IMO and international shipping are to meet their climate obligations and at least achieve the emissions reductions called for in the revised GHG Strategy then a number of changes will need to be made to the CII. Perhaps most important, after raising the levels of ambition (the energy efficiency improvement requirements), is ensuring that the targeted emission reductions are reliable and real. The current “soft” enforcement will need to be replaced with a more traditional approach that has real consequences for failing to comply.

According to a paper submitted to MEPC 81 by the Clean Shipping Coalition, Pacific Environment and WWF, the “revision of the CII, which is due to start at MEPC82 (September 30 – October 4th) and conclude before the end of 2025, is a key opportunity to bring it up to date with the revised GHG Strategy and to make sure that it works in the future in a coherent way with the contents of the basket of mid-term measures being negotiated at the same time. With the absence of any firm enforcement mechanism and with annual energy efficiency improvement requirements that are little better than ‘business as usual’ it is perhaps understandable that some have referred to this first period of CII as an ‘experience building phase’. But this phase must come to an end, and from 2027 the CII must be in a position to play a major role, alongside the proposed goal-based fuel standard (GFS) and other mid-term measures, in driving the urgently needed ship climate emission reductions.”

The co-benefits of using wind-powered and slower ships include reduced underwater radiated noise and whale strikes which leads to healthier whale and other ocean wildlife populations that can contribute to the ocean’s ability to sequester carbon. As the paper states “as the recent Organization’s workshop on the relationship between energy efficiency and underwater radiated noise (URN) clearly illustrated, ships that operate more efficiently, with the objective of reducing GHG emissions, are also quieter and less likely to disturb whales and other ocean wildlife. When ships slow down, they are also less likely to collide with and kill/injure whales and other ocean wildlife and are, generally, less polluting. This is the other largely unacknowledged aspect of shipping’s climate impact: ship operations are routinely and relentlessly undermining global ocean health and hindering the ocean’s ability to help us mitigate global heating. Healthy ocean ecosystems are needed to win the fight against global heating, and for that, a general lowering of shipping’s environmental impact is needed, not just for it to reduce its GHG emissions, as important as that is.”
Source: Clean Shipping Coalition