MEPC 78 in focus

16 June 2022

Tore Longva – Senior Principal Consultant

Kristian Johnsen – Principal Engineer
The webinar presenters – all from DNV Maritime

Kristian Johnsen Tore Longva Tom Barrett

Principal Engineer Senior Principal Consultant Global Head of Corporate
Communications, Maritime
DNV DNV
DNV
Host

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AGENDA

 GHG emission reduction

 CII, SEEMP and EEXI guidelines
 Revision of IMO GHG Strategy
 Future market-based measures and
technical requirements
 Highlights from other topics
 Questions and answers

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CII, SEEMP and EEXI
guidelines

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 The regulatory framework to reduce GHG emissions
Market-based measure
CO2 price Sets a price on CO2 TBD
emissions Operational requirement
Fleet emissions FuelEU
2025? Well-to-wake fuel GHG
Operational requirement intensity
Maritime
GHG Fuel
Well-to-wake fuel GHG TBD
Standard intensity Emission cap-and-trade
2024? Sets a price on CO2 EU ETS
Operational requirement emissions
CII 2023
Actual carbon intensity

Design requirement for

EEXI existing ships 2023
Ideal carbon intensity

Management requirement
SEEMP III Continuous carbon intensity 2023
improvement

DCS Reporting of actual fuel

consumption and CO2 2019 Reporting of actual fuel
SEEMP II emissions Fuel
2018 consumption and CO2 EU MRV
Management requirement emissions
SEEMP I Continuous energy 2013
efficiency improvement

Design requirements for

EEDI new ships 2013
Ideal carbon intensity EU regulations
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EEXI - Energy Efficiency Existing Ship Index

Scope:
• Cargo and ro-pax ships with
conventional propulsion
• Cruise ships with non-conventional
propulsion
• LNG ship with any propulsion
• DWT/GT size thresholds per ship type

EEXI:
• Calculated once in a lifetime – a design index, not
operational
• Is based on standard reference conditions, no onboard
measurements needed
• Ships to comply with the EEXI by first IAPP survey after
1 January 2023
• EEXI Technical File must be submitted to class for
approval. The new IEE certificate will subsequently be
issued.

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EEXI guidelines – main decisions
Main decisions at MEPC 78:
• 75% of MCRlim for ships fitted with shaft generators was kept
unchanged
• Determination of vref: In-service speed measurement included
Guidelines:
• MEPC.350(78): EEXI calculation guidelines
• MEPC.351(78): EEXI survey and certification guidelines
• MEPC.335(76): Engine Power Limitation guidelines
IACS Recommendations (forthcoming):
• 2022 IACS guidelines on the implementation of EEXI
• 2022 IACS guidelines for the use of computational fluid dynamics
fort he purposes of deriving the Vref in the framework of the EEXI
regulation

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CII - Carbon Intensity Indicator rating
Scope:
• Cargo, ro-pax and cruise ships above 5000
GT Annual fuel consumption CO2 factor
Requirements: Correction
• Every year from 2023: Annually calculate and
CII factors
report Carbon Intensity Indicator and rating A Annual distance travelled Capacity
(DWT or GT)
to E.
• Each ship needs to achieve rating C or better
Enforcement:
• If rating D for 3 consecutive years or rating E:
develop and implement an approved
corrective action plan as part of SEEMP to
achieve rating C or better
• Annual Statement of Compliance issued
Other elements:
• Review to be conducted by 1 January 2026,
e.g.:
• Reduction factors for 2027-2030
• Strengthened corrective actions
• Need for enhancement of the enforcement
mechanism

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CII guidelines – main decisions and guidelines
Main decisions at MEPC 78:
• Capacity parameter for ro-ro cargo ships was changed to gross tons.
• Reference lines for combination carriers, ro-ro cargo ships and ro-ro cargo (vehicle) ships were updated
• The reference line for ro-ro passenger ships was split in two, with a separate line for high-speed craft (HSC) and an
updated line for ro-ro passenger ships excluding HSC.
• Updates to the rating thresholds for the ship types with updated reference lines (ro-ro, vehicle, ro-pax, HSC)
• Interim guideline which includes correction factors and voyage adjustments for various ship types and circumstances.
• Corrections for adverse weather, extensive port and waiting time, boil-off gas consumption, and others were not
included at this stage and will need to be considered at the review in 2025.
• Provisions for verification of the CII as part of the fuel data collection system (DCS) reporting
• How to deal with change of DWT/GT or change of company/flag during a reporting period
Guidelines:
• MEPC.352(78) Calculation guidelines (G1) • MEPC.354(78) Rating guidelines (G4)
• MEPC.353(78) Reference line guidelines (G2) • MEPC.355(78): Correction Factor guidelines (G5)
• MEPC.338(76) Reduction factor guidelines (G3) • MEPC.348(78): DCS verification guidelines

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CII Guidelines, G5 – Correction factors and voyage
adjustments
Correction Summary Ships affected Data needed
Scenarios specified in MARPOL Annex VI, Reg 3.1
- any emission necessary for the purpose of securing the
Fuel consumption, distance sailed when
FCvoyage, Dx safety of a ship or saving life at sea; or All
conducting relevant operations
- any emission resulting from damage to a ship or its
equipment
Fuel consumption, distance sailed when sailing
FCvoyage, Dx Sailing in ice conditions Ice classed ships
in a sea area within the ice edge
Reefer kWh, and SFOC of source. Does not
apply when using FCvoyage.
FCelectrical Consumption for refrigerated containers Ships carrying reefer containers
Alternatively Reefer-days at sea/in port (avg of
arr/dep) and SFOC at sea/in port.
Cooling kWh and SFOC of source.
FCelectrical Consumption for cargo cooling and/or reliquification Gas carrier, LNG carrier
Does not apply when using FCvoyage.
Discharge kWh and SFOC of source.
FCelectrical Consumption for electric discharge pumps on tankers Tankers except shuttle
Does not apply when using FCvoyage.
Fuel used for cargo heating and steam driven
FCBoiler, FCothers Consumption for cargo heating and discharge pumps Tankers except shuttle and standalone pumps.
Does not apply when using FCvoyage.
Correction for voyages with STS (ship to ship) transfer Tankers with STS voyages, DWT, fuel consumption when in STS ops FCel,
TFj
operations except shuttle tankers FCother and FCboiler=0 when in STS ops
Shuttle Tankers with DP and
TFj Correction for shuttle tankers Capacity (GT or DWT)
bow/stern loading capabilities
EEDI fiVSE Capacity correction for voluntary structural enhancements Self-unloading bulk carriers From EEDI technical file
EEDI
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fi, fm
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Capacity correction factors for ice-classed ships Ice classed ships From EEDI technical file
EEDI fc Capacity correction factors for chemical tankers Chemical tankers From EEDI technical file
SEEMP Part III – ship operational carbon intensity plan

Scope:
• Cargo, ro-pax and cruise ships above 5000 GT
Main decisions at MEPC 78:
Requirements: • Updated SEEMP guidelines: Requirements
• CII calculation method for three-year implementation plan, self-
• Implementation plan for achieving required CII evaluation and improvements and corrective
• Self-evaluation and improvement
• Corrective action plan (when required due to action plans
inferior rating) • New SEEMP verification guidelines:
• Verified SEEMP onboard by 1 January 2023
• Company audits Documentation requirements, elements of
verification, company audits
Guidelines:
• MEPC.346(78) – Development of SEEMP
• MEPC.347(78) – Verification and company audits
of SEEMP Part III

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Recommendation on way forward
31 December
End of DCS reporting
To do in 2022: period

• Get an overview of your ships and

decide on EEXI and CII compliance 31 March
30 November
options Deadline for reporting
Deadline for Company
DCS data and attained
audits, if conducted.
• Develop EEXI Technical File and submit CII to verifier.
for approval
• Develop SEEMP III, submit for To do every year
verification from 2024
30 June DCS Verifier
To do in 2023: Deadline for verifier to
transfer verified DCS Verify DCS data and CII.
• Follow up on SEEMP III data to IMO. Note handling of data when Determine the rating.
changing company for a ship
• Monitor according to DCS and CII during a calendar year
requirements (including data for
correction factors) 31 May Inferior rating
Deadline for issuance of 3xD or 1xE
SOC. Corrective action plan
Confirming verified DCS Submit revised SEEMP
data and rating. 1 month after reporting
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Revision of the IMO GHG
Strategy

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IMO strategy on GHG reductions

MEPC 78 outcome:
Revision in 2023:
100% decarbonisation by
• Extensive exchange of
2050? views on the scheduled
revision
• Decision point MEPC 80
(July 2023)

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Future market-based
measures and technical
requirements

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New GHG measures on the table, decision point 2023
Market-based measures:
• A levy system based on absolute well-to-wake GHG emissions. The GHG price determined by
the IMO
• A levy system based on CII performance, where ships with CII performance below a
benchmark pay a contribution per tonne CO2, and ships with performance above the
benchmark receive a reward
• A levy system based on absolute tank-to-wake CO2 emissions where the revenues are partly
used to provide direct rebate to zero-emission vessels
• An emissions cap-and-trade system, similar to the EU ETS, where the well-to-wake GHG
emission level is set by the IMO and allowances are auctioned out
Technical measures:
• A GHG intensity fuel standard, setting requirements well-to-wake GHG emissions per energy
unit, conceptually similar to FuelEU Maritime

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Other GHG matters

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Other GHG matters

Lifecycle GHG and Carbon Intensity Guidelines for marine fuels

• Calculation method for well-to-wake and tank-to-wake GHG emissions
• Sustainability criteria
• First version finalized at MEPC 80 in July 2023

Onboard CO2 capture

• No substantial discussed and deferred to next MEPC

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AGENDA

 GHG emission reduction

 CII, SEEMP and CII guidelines
 Revision of IMO GHG Strategy
 Future market-based measures and
technical requirements
 Highlights from other topics
 Questions and answers

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Adoption of amendments to mandatory instruments

MARPOL Annex I / IBC Code – entry into force 1 January 2024 / 1 July 2024
• Harmonizes the consideration of watertight doors in damage stability
calculations with those in SOLAS watertight doors were adopted.
• The amendments apply to all oil and chemical tankers and will not have any
impact on existing ships.

MARPOL Annex II – entry into force 1 November 2023

• Revised GESAMP Hazard Evaluation Procedure used for classification of
new products carried on chemical tankers

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The Mediterranean Sea -
new Sulphur Emission Control Area (SECA)

• Subject to adoption, expected

to take effect from 1 July 2025
• Max 0.10% sulphur fuel
• Exhaust gas cleaning systems
(EGCS)

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Ballast water

• Experience building phase (EBF)

• Ports with challenging water quality
• Guidance on modification to BWMS
using active substances.
• International Ballast Water
Management Certificate (UI).
• Temporary storage of treated sewage
and grey water in ballast tanks.

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Other issues
• Marine plastic litter; marking of fishing gear, garbage record book
• Exhaust Gas Cleaning Systems (EGCS); two circulars approved
• Bunker Delivery Note (BDN) – Flash point;
Amendments to MARPOL Annex VI approved.
• Bio-fuels (Unified Interpretation)
• NOx Technical code NTC (Unified Interpretation)
• Anti-fouling systems; three guidelines adopted
• Bilge water – forced evaporation

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AGENDA

 GHG emission reduction

 CII, SEEMP and CII guidelines
 Revision of IMO GHG Strategy
 Future market-based measures and
technical requirements
 Highlights from other topics
 Questions and answers

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 DNV resources on decarbonization (selection)
SEEMP III Plan Emissions Insights Compliance EEXI Calculator Advisory services
Generator incl. preliminary CII rating Planner (Customer portal)
(customer portal) • Decarbonization
(Customer portal)
challenge
• EEXI – design
compliance
• CII – operational
compliance
www.dnv.com/seemp3 www.dnv.com/dcs www.dnv.com/c-planner www.dnv.com/eexi www.dnv.com/CII-advisory

Technical & Decarbonization On-demand Theme pages Publications

Regulatory News hub Webinars EEXI, CII, SEEMP III, etc. Alternative fuels, Ammonia
as fuel, etc.

www.dnv.com/tecreg www.dnv.com/decarb www.dnv.com/insights www.dnv.com/insights www.dnv.com/insights

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Appendix – Advisory

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In case of bad ratings or specific needs, advisory
support by preparing GHG reduction plans

1 2 3 4
CII calculation and
CII improvement Preparing and reviewing Monitoring and
GHG target benchmark
screening roadmap corrective actions

Deliverable: Deliverable: Deliverable: Deliverable:

- Carbon intensity status - Output from screening of
versus targets for vessel measures in our Abatement
or selection of vessels. Insight database
The results are used in
- Cost-benefit assessment of
step 2 and 3
improvement measures
- Workshop with client to
prioritize CII improvement
measures
- Roadmap with recommended - Dashboard for monitoring and
prioritized abatement reporting and daily
measures and time of management of CII
implementation for vessel to performance
stay aligned with carbon
intensity targets
- The results can be input to
SEEMP generator

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Advisory EEXI and CII services
1. EEXI calculation

2. EEXI Improvement Assessment

Design compliance 3. EEXI Technical File

EEXI 4. EEXI reference speed

5. Energy efficiency technologies

1. CII Status and GHG Target Benchmark

2. CII Improvement Screening; Screen and select cost-efficient fuel, operational or
Operational compliance technical abatement options
3. Preparing and Reviewing Roadmap
CII
4. Monitoring and corrective actions

Above steps can also be applied to a newbuild (starting from a ship specification)

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 Decarbonization services from our advisory experts

Related links

• Decarbonizing shipping

• EEXI – Energy Efficiency Existing Ship Index

• CII - Carbon Intensity Indicator – DNV

• SEEMP Part III - DNV

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Appendix

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 CII reference lines, reduction factors and rating
thresholds
Required annual operational CIIreq: (1 – Z /100) x CIIref Rating thresholds for attained CII:
A-rating: CIIatt ≤ CIIreq x d1
Reference line value CIIref: a x Capacity-c B-rating: CIIatt ≤ CIIreq x d2
C-rating: CIIatt ≤ CIIreq x d3
D-rating: CIIatt ≤ CIIreq x d4
else E-rating

Reduction factor - Z

Source: MEPC.353(78) Source: MEPC.338(76) Source: MEPC.354(78)

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Overview of applicability of regulations in MARPOL Annex VI, Ch. 4
Reg. 27: Reg. 28:
Reg. 22: Reg. 23:
Reg. 24: Reg. 25: Reg. 26.1: DCS CII rating Reg.
Ship type/characteristics Attained Attained
Required EEDI Required EEXI Basic SEEMP Reg. 26.2: 26.3: Enh.
EEDI EEXI
SEEMP Part 2 SEEMP
Bulk carrier >= 400 GT >= 400 GT >= 10000 DWT >= 10000 DWT >= 400 GT >= 5000 GT >= 5000 GT
Gas carrier >= 400 GT >= 400 GT >= 2000 DWT >= 2000 DWT >= 400 GT >= 5000 GT >= 5000 GT
Tanker >= 400 GT >= 400 GT >= 4000 DWT >= 4000 DWT >= 400 GT >= 5000 GT >= 5000 GT
Container ship >= 400 GT >= 400 GT >= 10000 DWT >= 10000 DWT >= 400 GT >= 5000 GT >= 5000 GT
Conventional propulsion

General cargo ship (except livestock carrier, barge carrier, heavy load
>= 400 GT >= 400 GT >= 3000 DWT >= 3000 DWT >= 400 GT >= 5000 GT >= 5000 GT
carrier, yacht carrier, nuclear fuel carrier)
Refrigerated cargo carrier >= 400 GT >= 400 GT >= 3000 DWT >= 3000 DWT >= 400 GT >= 5000 GT >= 5000 GT
Combination carrier >= 400 GT >= 400 GT >= 4000 DWT >= 4000 DWT >= 400 GT >= 5000 GT >= 5000 GT
Ro-ro vehicle carrier >= 400 GT >= 400 GT >= 10000 DWT >= 10000 DWT >= 400 GT >= 5000 GT >= 5000 GT
Ro-ro cargo ship >= 400 GT >= 400 GT >= 1000 DWT >= 1000 DWT >= 400 GT >= 5000 GT >= 5000 GT
>= 250+ DWT >= 250 DWT and
Ro-ro passenger ship >= 400 GT >= 400 GT >= 400 GT >= 5000 GT >= 5000 GT
and >=400 GT >=400 GT
Cruise ship N/A N/A N/A N/A >= 400 GT >= 5000 GT >= 5000 GT
Passenger ship (except ro-ro passenger and cruise) >= 400 GT N/A N/A N/A >= 400 GT >= 5000 GT N/A
Other ship with conventional propulsion, (e.g. heavy load carrier,
N/A N/A N/A N/A >= 400 GT >= 5000 GT N/A
livestock carrier, offshore)
LNG carrier with any propulsion system >= 400 GT >= 400 GT >= 10000 DWT >= 10000 DWT >= 400 GT >= 5000 GT >= 5000 GT
Cruise ship with non-conventional propulsion >= 400 GT >= 400 GT >= 25000 GT >= 25000 GT >= 400 GT >= 5000 GT >= 5000 GT
Bulk carrier, gas carrier, tanker, container ship, general cargo ship (except
livestock carrier, barge carrier, heavy load carrier, yacht carrier, nuclear fuel
N/A N/A N/A N/A >= 400 GT >= 5000 GT >= 5000 GT
carrier), refrigerated cargo carrier, combination carrier, ro-ro vehicle carrier,
ro-ro cargo ship and ro-ro passenger ship with non-conventional propulsion
Livestock carrier, barge carrier, heavy load carrier, yacht carrier, nuclear
fuel carrier, passenger ship and other ship (e.g. offshore) with non- N/A N/A N/A N/A >= 400 GT >= 5000 GT N/A
conventional propulsion, and Category A Polar Code ship
Platforms including FPSOs and FSUs and drilling rigs N/A N/A N/A N/A N/A N/A N/A

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CII Guidelines, G5 – Correction factors and voyage adjustments

Correction Summary Ships affected Data needed

Scenarios specified in MARPOL Annex VI, Reg 3.1
- any emission necessary for the purpose of securing the safety of a Fuel consumption, distance sailed when conducting
FCvoyage, Dx All
ship or saving life at sea; or relevant operations
- any emission resulting from damage to a ship or its equipment
Fuel consumption, distance sailed when sailing in a sea
FCvoyage, Dx Sailing in ice conditions Ice classed ships
area within the ice edge
Reefer kWh, and SFOC of source. Does not apply when
using FCvoyage.
FCelectrical Consumption for refrigerated containers Ships carrying reefer containers
Alternatively Reefer-days at sea/in port (avg of arr/dep)
and SFOC at sea/in port.
Cooling kWh and SFOC of source. Does not apply when
FCelectrical Consumption for cargo cooling and/or reliquification Gas carrier, LNG carrier
using FCvoyage.
Discharge kWh and SFOC of source. Does not apply
FCelectrical Consumption for electric discharge pumps on tankers Tankers except shuttle
when using FCvoyage.
Fuel used for cargo heating and steam driven and
FCBoiler, FCothers Consumption for cargo heating and discharge pumps Tankers except shuttle standalone pumps. Does not apply when using
FCvoyage.
Tankers with STS voyages, except shuttle DWT, fuel consumption when in STS ops FCel, FCother
TFj Correction for voyages with STS (ship to ship) transfer operations
tankers and FCboiler=0 when in STS ops
Shuttle Tankers with DP and bow/stern
TFj Correction for shuttle tankers Capacity (GT or DWT)
loading capabilities
EEDI fiVSE Capacity correction for voluntary structural enhancements Self-unloading bulk carriers From EEDI technical file
EEDI fi, fm Capacity correction factors for ice-classed ships Ice classed ships From EEDI technical file
EEDI fc Capacity correction factors for chemical tankers Chemical tankers From EEDI technical file

Source: MEPC.355(78)

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