E

MARINE ENVIRONMENT PROTECTION

MEPC 79/INF.19
COMMITTEE
7 October 2022
79th session
ENGLISH ONLY
Agenda item 7
Pre-session public release: ☒

REDUCTION OF GHG EMISSIONS FROM SHIPS

Information on the effects of charterers’ orders, distance travelled

and waiting time on Carbon Intensity Indicators

Submitted by INTERCARGO

SUMMARY

Executive summary: This document provides information on the effects of charterers

orders, distance travelled and waiting times on Carbon Intensity
Indicators

Strategic direction, if 3
applicable:

Output: 3.2

Action to be taken: Paragraph 16

Related documents: MEPC 78/17

1 This document comments on the CII G5 guidelines adopted at MEPC 78.

2 Taking into account the report and recommendations of the Correspondence Group
on Carbon Intensity Reduction that was established by MEPC 76, the Committee, at its 78th
session, adopted the 2022 Interim Guidelines on correction factors and voyage adjustments
for CII calculations (CII Guidelines, G5). The CII Guidelines G5, as adopted, include a number
of correction factors however several other correction factors that had been proposed were not
accepted by the Correspondence Group and/or the Committee and thus are not currently
included in the Guidelines.

3 On conclusion of the discussions on the Guidelines, the Committee invited interested

Member States and international organizations to collect relevant data and report relevant
information to the Committee ahead of the review of the CII regulations and guidelines by 1
January 2026.

4 In this document, INTERCARGO highlights some of the challenges faced by bulk

carrier shipowners/ship managers (and other segments) and the need for further correction
factors and/or voyage adjustments.

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Voyage length and waiting times

5 Document ISWG-GHG 12/2/6 (Liberia) informed of the negative impact of short voyages on a
ship’s AER. In this document, INTERCARGO, including data from the Blue Sky Maritime Coalition’s
paper A perspective on IMO Efficiency Measures: Opportunities for improvement1, provides further
information on the effects of waiting times and voyage distance on a ship’s CII and rating.

6 Table 1 provides information on voyages profiles for a 58,000 deadweight 2011 built
Supramax bulk carrier. The table shows, inter alia, the relationship between voyage distances,
waiting times, CII and the amount of absolute carbon produced. It is important to note that the
voyage distance and waiting times are often out of the owners/managers control, as these are
generally governed by charterers and port/terminal efficiencies.

Table 1 : Supramax voyage profiles over short regional and long international
voyage patterns (Source: Blue Sky Maritime Coalition)

7 Figure 1 provides a graphical display of the same bulker with a typical annual voyage
profile, its predicted CII Rating for 2026 and the absolute carbon produced. The effects of
distance, without some voyage correction or adjustment factor are clear as is the paradox that
those ships producing less emissions over a year are unfairly penalised. It should be pointed
out that for this size vessel, according to the Fourth Greenhouse Gas Study 20202 the average
yearly distance travelled in 2018 was 50,781 (nm) and that would clearly place the ship within
in the D Band. Although figure 2 is the predicted rating for 2026 it does give an indication of
where a typical Supramax could be placed in the rating system.

1
The full Blue Sky Maritime Coalition’s paper: A perspective on IMO Efficiency Measures: Opportunities for
improvement can be found on their website by using this link https://www.bluesky-maritime.org/copy-of-projects-1
2
Fourth IMO Greenhouse Study 2020, Table 35 - Detailed results for 2018 describing the fleet (international,
domestic and fishing) analysed using the bottom-up method -Bulk Carrier, size category 35,000 to 59,999 dwt

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Figure 1: 58k DWT Supramax CII, CII Rating

and absolute carbon emission for 2026
(Source: Blue Sky Maritime Coalition)
Effects of charterers’ orders

8 The impact of charterer’s orders cannot be underestimated, Figure 2 shows the

impact of a one knot speed reduction on a ship’s CII rating for the same 58,000 Supramax.
The reduction of speed leads to a not insignificant improvement in the ship’s rating and based
on the 2018 data from the Fourth IMO Greenhouse Gas Study the ship’s rating would be in the
lower segment of a C Rating.

9 The one knot speed reduction will be subject to the charterer’s orders and thus
predominately out of the control of the owner/manager. Lower speeds would naturally result in
lower overall tonnage supply which assuming a constant demand and fuel price would possibly
entail higher freight rates meaning it is doubtful that a charterer would voluntarily choose this.

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Figure 2: 58,000 DWT Supramax on reduced Charter Speeds

with resulting IMO CII rating A, B, C, D, E: year 2026.
(Source: Blue Sky Maritime Coalition)

10 Figure 3 shows a comparison between the 2011 Supramax and a more modern
bulker, with a reference voyage of 53,000 nm predicted to achieve an A rating. This figure also
shows the negative effects of a reduction of distance travelled, always outside of the ship
owner’s’ control, to the more modern ship.

11 A charterer’s orders comprising of multi-port visits increases the proportion of the time
in port compared to the total distance travelled. The orange triangle in Figure 3 highlights the
extremely negative impact of a distance reduction of 19,000 nm (approximately 35% of the
annual distance travelled), with the modern bulker’s rating falling from A to C/D. In addition to
charterer’s orders, any port delays leading to an increase in waiting time and subsequently
less overall distance travelled also have a negative impact on the rating and are outside the
shipowner’s control.

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Figure 3: Charter Distance Impacts Supramax 2011 vs. Modern bulker with resulting
IMO CII rating A, B, C, D, E: year 2026. The orange triangle illustrates a distance
reduction from the reference yellow diamond voyage.

12 Figure 4 further highlights the effect of waiting time and of speed underway on a ship’s
rating. As mentioned in paragraph 1, port delays have a detrimental effect on a vessel’s rating.
In addition to being out of the owner’s control, port congestion may also be beyond the control
of even the charterer (for example during pandemic restrictions). Additional waiting time due
to port delays can have complex effects on the charterer’s orders including; increase of ship
speed, change of port calls, waiting times and distance travelled.

Figure 4: "Modern Bulker CII Sensitivity Speed and Waiting Days" illustrates the
sensitivity impacts of these two voyage parameters on the CII rating grade scores.
IMO CII ratings A, B, C, D, E: year 2026.

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13 The yellow diamond in Figure 4 represents an annual voyage profile at 11.8 knots and
a total of 76 days immobile resulting in a CII rating of A. An increase of speed, due to charterer’s
orders, of 1.1 knots results in the vessels rating being reduced to C. Similarly, a change in
waiting time of 56 days to 132 days also results in reducing the rating to C.

14 In addition to the very real challenges faced by owners/managers, the CII and rating
system as currently envisaged without the necessary measures to correct the issues described
in this paper would most likely have negative impacts on some ports and regions. It is likely
that some owners and charterers will avoid calling at ports with long waiting times, in order to
maintain ratings. Bulk carriers often trade in those areas with poor infrastructure and the lack
of will by owners/charterers to service those ports or regions could have potential damaging
effects on regional development.

15 INTERCARGO is supportive of the short-term measures adopted by the Committee

but is of the opinion that to make the measure fit for purpose and to achieve the ambitions of
the Organization careful consideration of CII calculation including correction factors and/or
voyage adjustments will be needed.

Action requested of the Committee

16 The Committee is invited to note the information contained within this document
during the review of the short-term measure.

___________

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