November 16, 2022
The carbon intensity indicator (CII) enters into force 1st of January 2023. The new indicator is likely to impact charter party terms and freight rates, but with no CII ratings published until 2024, the charterer is left blindfolded. The Siglar Carbon Voyage CII helps the charterer decode the CII mystery.
From January 2023 the "meter" for calculating the first CII rating will start to run. In 2023 we expect owners to be more reluctant to compete for cargoes that is expected to have a negative contribution to the CII calculation. Hence, the freight rates for such cargoes might go up.
From the charterers’ point of view, 2023 might be a black box when it comes to CII, as no CII rating will be available, yet charterers’ cargoes will be judged by owners on the expected contribution to the annual CII. Thus, unless charterers have access to CII calculation tools, they would be blindfolded.
This is why we have developed the Voyage CII to indicate the carbon intensity of a full round voyage. That way charterers know how the cargo in question would contribute to each ship’s annual CII. This information could come in handy in charter party negotiations. It is also useful to charterers who have internal requirements only to fix ships with a certain CII rating.
The voyage CII is calculated using the annual CII methodology, except that the voyage CII rating indicates the carbon intensity in the period of a full round voyage not in a year. Carbon emissions from a full round voyage is defined as carbon emitted between departure from previous discharge port to departure from the port where the cargo in question is discharged.
The Voyage CII is presented in the Siglar Carbon Ship Finder, a tool that evaluates all potential ships for a cargo and ranks them according to expected absolute emissions in tonnes of CO2, so that it is easy for the charterer to make the most carbon efficient choice. Read more about the Ship Finder.
What is the International Maritime Organisation’s Carbon Intensity Indicator(CII)
The CarbonIntensity Indicator (CII) is a measure of how efficiently a ship transports goods. It measures operational intensity and is given in grams of CO2 emitted per deadweight distance (distance x ship deadweight). Thereafter the relevant correction factors are applied, such as deduction for emissions related to cargo handling and ice class.
The ship is then categorised into A, B, C, D or E rating. Ships that receive a D rating for three consecutive years or an E rating for one year are required to submit a corrective action plan to demonstrate ways in which they can improve their performance.
The CII enters into force 1st of January 2023.