Carbon Intensity Indicator (CII) And Actionable Solutions for Shipping Industry

The shipping industry, the backbone of global trade, is also a major contributor to Greenhouse Gas Emissions. Developed under the structure of the Initial IMO Strategy on Reduction of GHG Emissions from Ships, technical (EEXI) and operational (CII) amendments require ships to improve their energy efficiency in the short term and thereby reduce their greenhouse gas emissions.

While the basics of CII are widely understood, it is vital that we understand how to comply with these regulations effectively. This article focuses on simplifying CII, and its Regulatory Framework and also on implementing actionable solutions such as energy-efficient technologies, vessel modifications, and operational strategies to meet CII requirements while also mitigating the impact on the environment.

Overview of Carbon Intensity Indicator (CII)

CII is an operational efficiency measure of a vessel that applies to ships of 5,000 gross tonnage and above. CII is a function of grams of CO2 emitted per cargo-carrying capacity and nautical miles. The annual operational CII verification will be carried out, and based on the vessel’s performance, they will be rated on a scale from A to E, with A being the most efficient and E the least.

Ships that fall into the D rating for three consecutive years or E rating for one year must submit a corrective action plan to improve their rating. The performance of the ship is recorded in a “Statement of Compliance”, and the same is further elaborated in the respective vessel’s Ship Energy Efficiency Management Plan (SEEMP). The below process shows the overview of the CII process.

How CII is Calculated?

• Attained CII is the actual carbon intensity indicator value, which is calculated from annual data reported by ship owners per each individual vessel.

Where Total transport work by a vessel is obtained by using data from the IMO Data Collection System (IMO DCS).

Correction factors and voyage adjustments for CII calculations shall be applied to the calculation of the attained annual operational CII.

• Required CII is the carbon intensity indicator value set by the IMO regulations for each vessel type annually. 

Challenges in Carbon Intensity Indicator (CII) Compliance

Achieving CII compliance has several operational and regulatory challenges:

1. Inconsistent Operational Profiles

CII rating gets affected significantly depending on operational conditions such as voyage length, routes, port waiting times, or specific cargo requirements, thus making it challenging to maintain consistent ratings, especially for ships operating in trades with unpredictable schedules or shorter voyages where fuel consumption is higher per distance travelled.

2. Lack of Flexibility in Fleet Management

CII compliance requires ongoing monitoring, which reduces operational flexibility. A vessel with a lower CII rating may need to reduce speed or modify its route, which can disrupt commercial schedules and impact charter commitments. Shipowners may find themselves facing difficult choices between maintaining operational efficiency and adhering to CII regulations.

Additionally, for fleets with a diverse mix of vessel types and ages, applying uniform decarbonization strategies becomes impractical. Older vessels are less efficient, making them more vulnerable to poor CII ratings, but retrofitting or replacing these vessels can be capital-intensive.

3. Unclear Long-Term Regulatory Path

While CII is already in force, the IMO’s roadmap for decarbonization is far beyond the current regulation, which creates uncertainty for shipowners planning fleet upgrades. The prospect of future, more stringent regulations leaves operators hesitant about investing in technologies or operational changes that may soon be outdated or insufficient.

This uncertainty makes it harder to calculate the return on investment (ROI) for energy-saving retrofits or new-building strategies, causing delays in decision-making and compliance actions.

4. Commercial and Financial Impact

Vessels that fail to meet the required CII rating risk not only penalties but also commercial consequences. Poor CII ratings could affect a ship’s marketability, as charterers increasingly prefer vessels with better environmental performance. Additionally, ships with lower ratings could face higher fuel consumption costs, slower voyage times, etc. These challenges highlight the pressing need for shipowners to implement flexible, long-term strategies that address the technical, commercial, and operational aspects of CII compliance.

Decarbonisation Solutions for Compliance

To meet CII regulatory requirements and avoid penalties, shipowners must focus on reducing the carbon intensity of their vessels. While the distance travelled by the vessel is commercially controlled, here are some of the most effective long-term strategies that deal directly with CO2 Emissions :

1. Operational Adjustments

Operational measures can also play a crucial role in reducing a vessel’s carbon intensity.

• Speed Optimization
• Voyage Planning
• Trim and Draft Optimization
• Engine Load Management
• Baller Management
• Cold Ironing (AMP)
• Variable Frequency Drives (VFD’s)

2. Energy-Efficient Technologies (EETs)

Energy-efficient technologies (EETs) are vital in improving the efficiency of ships; these devices can reduce fuel consumption and CO2 emissions, making them an essential tool for compliance. Vessel EQ by Azolla (https://eq.azolla.sg/) provides insights as to which EETs are a viable solution.

• Pre-Swirl Ducts
• Wake Equalising Ducts
• Rudder Bulbs
• Propeller Boss Cap Fins (PBCF)
• Flettner Rotor
• Turbo-Sails
• Wind-Assisted Propulsion Systems (WAPS)
• LED Lighting

3. Hull Modifications

Modifying the hull of a vessel can significantly impact its hydrodynamic efficiency, leading to reduced fuel consumption and lower CO2 emissions. 

• Hull Coatings
• Bulbous Bow Modifications
• Hull Cleaning & Painting
• Hull Air Lubrication Systems

4. Propulsion System Upgrades

Upgrading the propulsion system is another effective way to enhance a ship’s efficiency and reduce carbon intensity.

• Propeller Upgrades
• Hybrid and Electric Propulsion
• Shaft Generators
• Exhaust Gas Recirculation (EGR)
• Waste Heat Recovery Systems

5. Alternative Fuels

Switching to alternative, low-carbon fuels is a long-term solution for reducing carbon intensity.

• LNG (Liquefied Natural Gas)
• Biofuels
• Ammonia and Hydrogen

Implementation Examples

The charts provided illustrate the substantial improvements in fuel efficiency achieved after retrofitting Energy-Efficient Technologies (EETs) on a 106,000 DWT Bulk Carrier.

Chart 1: Laden Fuel Consumption Before and After Dry Docking

The first graph compares the vessel’s fuel consumption in laden conditions before and after undergoing dry docking (DD) for EET retrofitting. The scatter points represent fuel consumption data, with blue indicating pre-retrofit and green representing post-retrofit. The trend lines show a clear reduction in fuel consumption after the retrofitting process, highlighting the effectiveness of the EET enhancements.

Chart 2: Comparative Fuel Savings Between Sister Vessels

The second chart provides a comparative analysis between two sister vessels: one that underwent an EET-enhanced dry docking and another that had a regular dry docking without additional upgrades. The shaded area labelled “Gain due to EET enhancement” illustrates the fuel savings achieved by the retrofitted vessel. This significant difference in fuel consumption between the two vessels underscores the tangible benefits of adopting advanced energy-saving measures.

Simplifying CII Optimisation with – Vessel EQ

Attaining CII Compliance and better CII ratings can be challenging, but tools like Vessel EQ offer practical solutions. These free tools allow ship operators/owners/managers to evaluate the impact of Energy-Efficient Technologies, assess CO2 abatement, and explore how various measures can enhance a vessel’s CII rating.

For those seeking to optimise their fleet’s performance and meet CII regulations, tools like Vessel-EQ provide an accessible way to explore these options and make data-driven decisions.

Conclusion

The Carbon Intensity Indicator (CII) represents both a challenge and a significant opportunity for the shipping industry. Compliance is not just about ticking regulatory boxes; it’s about leading the transition towards sustainable shipping. By strategically investing in Energy Efficient Technologies, hull and propulsion upgrades, and optimising operational practices, shipowners can not only meet CII requirements but also position their fleets as front-runners in the shift toward greener, more efficient maritime operations.

As the industry continues to face stricter emissions targets, those who proactively embrace innovation and sustainability will be best equipped to navigate the evolving regulatory landscape, mitigate financial penalties, and secure long-term competitiveness in a decarbonised future.

You might also like to read-

• Green Fuels For Ships and Their Challenges
• Role of Seafarers in Maritime Decarbonization
• Why and How to Decarbonize the Marine Industry?
• Introduction To Methanol As A Sustainable Fuel For Ships
• Simplifying the Energy Efficiency Existing Ship Index (EEXI)
• Charting A Course for Shipping Decarbonisation: Key Outcomes and Analysis from MEPC 82
• Sustainability Certification for Marine Fuels
• Exploring Biofuels As A Potential Maritime Fuel of the Future

About Author

Azolla is a leading provider of sustainable solutions that drive decarbonization in the maritime industry. With a firm conviction that maritime professionals are key agents of change, Azolla endeavours to educate and empower individuals to embrace sustainable practices and lead the industry towards a carbon-neutral future. The writing team comprises of:

Kiran Shet, Head of Azolla
Aditya Srivatsava, Manager – Energy Efficiency & Decarbonization
Manav Chidambaran – Decarbonisation Specialist
Jothieswaran – Senior Naval Architect