An intro to CII Compliance

Starting in 2023, shipowners will be required to International Maritime Organization (IMO) standards for carbon emissions. A very good intro to the Carbon Intensity Index (CII) process

I am guessing that vessel owners have some idea where most, if not all, their vessels lie on the CII. The market will likely start to create a 2 or 3 tiered market
i. E category
ii. D category
iii. A, B & C category


How are these standards enforced? What is the penalty for failure to comply?

We do see news reports that some companies are experimenting with methanol or ammonia or maybe hydrogen as low carbon fuels. Availability at ports around the globe must be a challenge. And all three can be made from natural gas, not exactly green. Green alternatives are tiny compared to the required quantities.

The basic idea is the standards are not immediately punitive. So, if the vessel fails in the first year, the owner has the opportunity to address the issue. On the flip side, an owner will typically spend the least amount to get the vessel compliant. And probably the easiest and cheapest way to get compliant is operating at a slower speed (the vessel is not burning as much fuel). But, speed may/may not be a factor for the charterer.

BTW, if the owner opts for slower speed, they can’t just say they will operate the vessel at x knots. They actually have to install locks to ensure the vessel cannot exceed the operating speeds at all times, not just at specific measured times. And remember, it isn’t just pass once. The same vessel needs to get to a grade of C or better, and stay on an improving trajectory. There are other options to meeting CII (painting the vessel, propeller mods, etc). But, some of those options might cost more and might not benefit the company long enough to recover the cost.