Greenhouse gas emissions

EU

The European Commission (EC) launched the Fit-for-55 package (FF55) in the summer of 2021, aiming to contribute to achieving the goals set out in the EU's Green Deal of at least 55% reductions in greenhouse gases by 2030 and climate neutrality by 2050. FF55 includes five maritime-related proposals: 1) FuelEU Maritime (FEUM), 2) the Emissions Trading Directive (ETS Maritime), 3) Regulation to promote Infrastructure for alternative Fuels (AFIR), 4) Renewable Energy Directive II (Red II), and 5) Energy Taxation Directive (ETD).

On July 25, 2023, the EU adopted the new fuel standard for shipping in the form of the "FuelEU Maritime" regulation. The purpose of FuelEU Maritime is to ensure demand for green alternative fuels by gradually reducing the greenhouse gas intensity of ship fuels by up to 80% by 2050. Furthermore, rules for infrastructure are established, including requirements for the use of shore power in selected major ports. The agreement enters into force on January 1, 2025, covering ships over 5,000 gross tons and accounting for around 90% of CO2 emissions from shipping in the EU.

The revision of the ETS Maritime was adopted on May 10, 2023. In January 2024, the EU's Emissions Trading Directive (EU ETS) will be expanded to include CO2 emissions from all ships of 5000 gross tons and above calling at EU ports, regardless of flag. The purpose of expanding the EU's emissions trading system (EU ETS) to include shipping is to encourage increased energy efficiency, low-emission solutions, and reduce the price difference between alternative fuels and traditional ship fuels.

IMO’s 2023 Climate Strategy

In the IMO, member states negotiate various maritime-related issues. The European Commission participates as an observer, while member states handle the negotiations themselves.

The IMO adopted the first global climate strategy for international shipping in 2018. It has now been succeeded by the IMO 2023 climate strategy. The objective of the 2023 climate strategy is for shipping to be climate-neutral by around 2050. Additionally, emissions from shipping should consider the overall climate footprint of fuels (lifecycle perspective). To ensure progress towards this goal, a series of checkpoints have been established:

• By 2030, 5-10% of the energy used in ships should come from sources that emit zero or near-zero greenhouse gases.
• By 2030, emissions from ships should be reduced by 20-30% compared to 2008 levels.
• By 2040, emissions from ships should be reduced by 70-80% compared to 2008 levels.

Negotiations are currently underway to achieve agreement on reduction measures to ensure compliance with the strategy's objectives. These negotiations are expected to be completed by 2025 and implemented by 2027. According to the strategy, the forthcoming regulation should be based on a package of technical and economic regulations. In parallel with these negotiations, the existing short-term regulation towards 2030 will also be revised in 2025.

Already back in 2011, the IMO adopted the first globally binding rules to reduce maritime CO2 emissions. This is done through the Energy Efficiency Design Index (EEDI), which sets standards for energy efficiency in new ships. Additionally, there is an operational plan for ship energy efficiency (SEEMP), which is a tool for both new and existing ships to improve their operational energy efficiency.

The regulations came into force in 2013. In connection with these regulations, a number of resolutions and circulars implementing the rules have also been adopted. By 2025, the EEDI rules for the energy efficiency of new ships will be fully phased in. Additionally, rules for improving the energy efficiency of existing ships, EEXI, were concurrently adopted, which came into force in 2023.

IMO

In the IMO its member states are negotiating a multitude of maritime related issues.

In the coming years, discussions on medium and long-term regulatory measures will be addressed, including work on introducing alternative sustainable fuels as well as market-based measures that can ensure further reductions to make climate-neutral shipping a reality.

Already back in 2011, IMO adopted the first globally binding rules to reduce maritime CO2 emissions. This is done by utilizing the Energy Efficiency Index (EEDI), which sets energy efficiency standards in new vessels. In addition, a Ship Energy Efficiency Plan (SEEMP) is used, which is a tool for both new and existing ships to improve the vessels' operational energy efficiency.

Later on the Data Collection System (DCS) was introduced to collect fuel consumption data for ships, as well as the Energy Efficiency Existing Ship Index (EEXI), which sets energy efficiency standards for existing ships, and the operational Carbon Intensity Indicator (CII), which is calculated on a yearly basis.

Energy Efficiency Design Index (EEDI)

EEDI was put into force in 2013 meaning new ship design needs to meet the reference level for their ship type. The reference level is tightened every five year to stimulate the technical development and to ensure new ships will be as energy-efficient as possible.

From January 1st 2013 verification of the EEDI is mandatory for all new ships - or ships in service which has undergone a conversion that is so extensive that the ship is regarded as a newly constructed ship - of 400 gross tonnage and above.

Ship Energy Efficiency Management Plan (SEEMP)

SEEMP provide a tool for optimization of a ship’s operational performance and consists of three ship specific parts: the management plan to improve energy efficiency, the plan for collection of fuel oil consumption data and the operational carbon intensity plan.

DCS – IMO's CO2 Data Collection System

In 2016, the IMO Environmental Committee (MEPC) adopted a mandatory global maritime data collection system, a so-called Data Collection System (DCS). The new DCS system came into force on March 1, 2018, ensuring a structured monitoring and reporting of ship fuel consumption. The system is intended to help determine the ships' fuel consumption and their CO2 emissions.

Energy Efficiency Existing ship Index (EEXI)

EEXI is a similar measure to EEDI. Ships has to attain EEXI approval once in a lifetime by the first periodical survey in 2023 at the latest. EEXI is based on a required reduction factor expressed as a percentage relative to the EEDI baseline for the given ship type.

Carbon Intensity Indicator (CII)

Where EEDI and EEXI is a once in a lifetime indicator the CII is a continued indicator that has to be measured/calculated each year starting from January 1st 2023 for ships of 5000 GT or above. The CII is calculated from data collected for a ship in the DCS. The CII is expressed in the same unit as EEDI and EEXI. The CII would require to be documented and verified against a required annual operational CII to enable a rating to be determined. The rating will be given in a scale from A to E where A is major superior and E is inferior performance level. The performance level will be recorded in the SEEMP.

The aim of a ship is to be rated A, B or C. A ship rated D for three consecutive years, or E, would have to submit a corrective action plan, to show how the required index (C or above) would be achieved.

The CII mechanism will be reviewed in 2026.