The study, commissioned by the Environmental Defense Fund Europe, investigates whether the Carbon Intensity Indicator (CII) is a meaningful tool which additional measures could use to ensure the timely decarbonisation of the EU maritime shipping sector.
The CII requires ships of 5,000 GT and above of certain ships types to determine their operational carbon intensity on an annual basis. In addition, depending on the CII levels attained, labels ranging from A to E are assigned to the ships. To incentivise an improvement of the operational carbon intensity, the CII is designed in such a way that ships, which do not improve their operational carbon intensity, run the risk of receiving worse CII labels over time. And the IMO requires ships that achieve a D rating for three consecutive years or an E rating in a single year, to develop a corrective action plan to achieve the required annual operational CII and thus a C rating.
The study analyses the attained CII levels and the CII labels of the ships which have reported under the EU MRV Regulation. In particular, the 2030 emission reduction that could be incentivised by means of the CII label scheme and the CO2 emission reduction potential of specific reduction options are analysed for the 2019 EU MRV fleet. The effect of the FuelEU Maritime Regulation is thereby accounted for. In addition, potential additional measures, building on the CII, that different actors in Europe could take to contribute to a timely decarbonisation of the EU maritime shipping sector are discussed.
We conclude that the CII is, in principle, a very useful tool to improve the operational carbon intensity of the sector. For the effectiveness of the CII, however, it is important to ensure that the metric of the CII is amended to reward the use of renewable fuels. Also the CII reduction factors, which have not been determined for the period after 2026 yet, should be ambitious enough to also stimulate the further and timely development of technical measures to improve the energy and carbon intensity of ships as well as of alternative fuels. If the enforcement of the CII at the IMO level cannot be strengthened, additional measures that reward ships with a relatively good label and/or penalise ships with a relatively poor label are all the more important. Publication of the individual ship’s CII label can contribute to an even higher transparency in the market.