Here is a brief summary of the regulations relating to the decarbonization of maritime transport that have recently come into force.
1. Since January 1, 2013, ships - with a gross yolk equal to or greater than 400 UMS ("Universal Measurement System", the English tonnage unit for ships) and engaged in international voyages - must keep on board a "Ship Energy Efficiency Management Plan" (SEEMP), which aims to improve the energy efficiency of ships by proposing ways to improve their energy efficiency during navigation. In order to verify the effectiveness of the implemented SEEMP, ship owners can use the Energy Efficiency Operational Indicator (EEOI), which continuously monitors the energy consumed during the operation of a vessel.
2. In addition to the SEEMP, which measures the operational energy efficiency of ships, the IMO has mandated the use of an Energy Efficiency Design Index (EEDI) for all ships built as of January 1, 2013. The EEDI imposes strict requirements on shipowners to encourage energy-optimized ship designs, the use of efficient, low-polluting and energy-saving equipment and engines, by requiring a minimum consumption per nautical mile traveled (ton per nautical mile and for a representative speed) for ships of different types and sizes. The index is expressed in gCO2/(t.nm), i.e. in grams of CO2 used to travel a distance of one nautical mile depending on its load.
3. Since January 1, 2019, operators of ships of 5,000 gross tons or more engaged in international shipping must collect and report their fuel consumption to the administration or an authorized body via the IMO's Data Collection System (DCS).
This system also makes it possible to create a database that is very useful for the adoption of future regulations.
4. As of January 1, 2023, ships of all types and ages must be able to present their EEXI (Energy Efficiency Index for Ships in Service), which corresponds to an extension of the EEDI to the existing fleet of ships. The objective is to determine an objective performance framework for each type of vessel. This requires, as for EEDI, calculating the level of CO2 emissions based on the installed engine and auxiliary power, the type of fuel used and its CO2 conversion factor, and then dividing it by the vessel's carrying capacity, which corresponds to the vessel's tonnage and speed.
5. From January 1, 2023 and in parallel with the EEXI, shipowners - of vessels with a gross yolk equal to or greater than 5,000 MSU and engaged in international voyages - should see the arrival of the CII, the "Carbon Intensity Index", which will be integrated into the SEEMP. They will have to determine their required annual operational Carbon Intensity Index (CII). The CII determines the annual reduction factor to ensure continuous improvement of the vessel's operational carbon intensity within a specific rating level. The achieved annual operational CII will need to be documented and verified against the required annual operational CII. This will determine the operational carbon intensity score. This grade will be assigned on a scale of A, B, C, D and E, and the performance level will be recorded in the "Ship Energy Efficiency Management Plan" (SEEMP). Note that a vessel with a grade of D for three consecutive years or a grade of E will be required to develop a corrective action plan to achieve the required annual operational ICC.
6. Beyond these IMO regulations, a major measure is expected at the European Union level.
In parallel to the DCS measurement system (see 3.), the European Union's MRV (Monitoring, Reporting, Verification) regulation came into force on July 1, 2015 and requires ship owners and operators to monitor, report, and verify annually the CO2 emissions of ships over 5,000 gross tons (GT) calling at a port in the EU and EFTA (Norway and Iceland). The data collection takes place per voyage and started on January 1, 2018, while the reporting is done on an annual basis. These data are published and accessible on the Thetis MRV platform of EMSA (European Maritime Safety Agency): https://mrv.emsa.europa.eu/#public/emission-report
In July 2021, the European Commission published a "Fit for 55" legislative package. The cap-and-trade system for the EU's major emitting sectors, the EU ETS, has thus increased its ambitions. It currently includes the electricity and heat sectors, as well as energy-intensive industries (steel, paper, glass, cement, ceramics) and commercial aviation. The GHG emissions reduction target to be achieved by 2030 from 2005 levels would increase from -43% to -61%. In addition, the maritime sector would be included from 2023.
This legislative package includes a gradual extension of the Emissions Trading Scheme (ETS) to the maritime sector from 2023, over a period of 3 years:
- Allowances must be surrendered for 100% of emissions for intra-EU travel and 50% for extra-EU travel.
- The entity responsible under the directive will be the "shipping company" and the cost of emissions could be passed on to the charterer.
- Allowances will be paid for 20% of verified emissions for 2023, 45% for 2024, 70% for 2025 and 100% for 2026.
- Vessels over 5000GT are eligible under the directive
Here are the latest advances in the "Fit for 55" package:
- May 17, 2022: Members of the European Parliament voted in favor of the proposal.
- During the plenary session of June 6-9, 2022, a negative vote surprised the entire shipping industry.
- June 27, 2022: The EU Council of Energy and Climate Legislative Proposals adopted its general orientation on the proposed new rules of the "Fit for 55" package. The next step will be negotiations with the European Parliament.
7. Finally, there has been talk for several years of applying a carbon tax to maritime transport.
Since 2019, many shipowners and the International Chamber of Maritime (ICS) have been submitting proposals to the IMO to implement a carbon tax in the shipping sector.
For example, at the 78th MEPC meeting (June 6-10, 2022), the government of Japan proposed a tax of $56/T CO2, starting in 2025 ($135/T CO2 in 2030, $324/T CO2 in 2035 and $635/T CO2 in 2040) with the aim of subsidizing zero-emission ships.
Today, only Norway has a CO2 tax of $47/tonne, which includes domestic transport but excludes international transport.
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