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Important regulations in the maritime industry

The shipping industry has a mission to become more sustainable. Measures and regulations have been implemented, and new regulations are about to enter into force with the aim of decarbonizing and reducing greenhouse gas (GHG) emissions. At Kongsberg Digital we are certain that digitalization is a key enabler for the industry on the journey to more sustainable operations. We have compiled an overview of regulations and measures that the industry needs to comply with and prepare for.

IMO 2023

The International Maritime Organization (IMO)’s ambition is to cut annual GHG emissions from international shipping by at least 50 % by 2050 compared to 2008. The strategy also aims to reduce CO2 emissions per transport work by at least 40 % by 2030, working towards 70 % by 2050. IMO has implemented several regulations to meet these targets, further and more comprehensive regulations are expected to be adopted by IMO in 2023 when the initial IMO GHG strategy will be revised.

Existing regulations:

  • The Energy Efficiency Design Index (EEDI) is a design standard made mandatory for all newbuilding vessels. It seeks to reduce CO2 emissions of up to 30 % through design efficiency, depending on ship type, size and year built.
  • The Ship Energy Efficiency Management Plan (SEEMP) provides a mechanism to operate and improve a ship’s energy efficiency. It is mandatory for all ships above 400 gross tonnage in operation to be equipped with SEEMP.
  • The Fuel Oil Consumption Data Collection System (DCS) requires ships of 5,000 gross tonnage or above to collect and report consumption data for each type of fuel oil they use.

Upcoming regulations:

At the 75th session of the IMO’s Marine Environment Protection Committee (MEPC 75), three further measures were approved. They will enter into force the 1st of January 2023.

  • The Carbon Intensity Indicator (CII). All ships above 5,000 gross tonnage will be rated from A (good) to E (negative). This will determine the annual reduction factor needed to ensure continuous improvement of the vessels operational carbon intensity. In addition to this, port states will be encouraged to demand that vessels entering their dock are rated with either A or B. Vessels rated D or E three years in a row, must develop an action plan for how to improve their ratings.
  • The Energy Efficiency Design for Existing Ships (EEXI) is the retroactive standard for all existing vessels above a certain size. This is a one-off certification that will work as an equivalent to EEDI Phase 2 or 3, regardless of when the vessel is built.
  • The Ship Energy Efficiency Management Plan (SEEMP) will be strengthened to include mandatory content, such as an implementation plan on how to achieve the best Carbon Intensity Indicator rating (A-B). This implementation will also be subject to audits. 

Read more about the IMO regulations here

Poseidon Principles

To further promote decarbonization in international shipping, several banks have now signed the Poseidon Principles initiative, which is a framework for integrating climate considerations into lending decisions. This means that shipping companies must commit themselves to follow these principles to obtain a financial loan from the banks. 

Here are the principles:

  • Assessment of climate alignment:
    • Signatories will, on an annual basis, measure the carbon intensity and assess climate alignment – carbon intensity relative to established decarbonization trajectories – of their shipping portfolios.
  • Accountability:
    • For each step in the assessment of climate alignment, Signatories will rely exclusively on the data types, data sources, and service providers identified in the Technical Guidance.
  • Enforcement:
    • Signatories will agree to work with clients and partners to covenant the provision of necessary information to calculate carbon intensity and climate alignment.
  • Transparency:
    • Signatories will publicly acknowledge that they are a Signatory of the Poseidon Principles and publish the results of the portfolio climate alignment score of their Business Activities on an annual basis in line with the Technical Guidance. 

Read more about the Poseidon Principles.