Hi.
In your opinion, what impact do we expect to see in vessels’ chartering in view of the new environmental regulations coming into force in the next year?
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Hi @Alexia.papd,
Contractual solutions to enable parties to comply with MARPOL’s EEXI and CII regulations which come into force on 1 January 2023 are a top priority.
For time charter parties, compliance with Carbon Intensity regulations and the ongoing obligation to improve a ship’s efficiency and reduce emissions annually is very challenging.
BIMCO is preparing a CII Clause to balance the operational restrictions imposed on owners against allowing charterers to optimize the ship’s commercial activity during the charter period.
While, already BIMCO published a clause for the EEXI.
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The introduction of the CII (carbon intensity indicator) will eventually have an impact on chartering strategies. With the CII, for the first time ever, ships are ranked. The ranking is based on grams of CO2 emitted per cargo carrying capacity and nautical mile. Charterers can have an impact on the CII rating of a vessel because the CII rating is partly dependent on the operational profile of the ship (ordered speed, laden/ballast miles). In other words, a vessel might have an “B” rating in one year and the next year the same vessel might have a “C" because of its commercial activity. On the other hand, shipowners will be obliged by the IMO to maintain high CII ratings on their ships!
You may also refer to the below interesting projection by DNV.
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Well spoken Parascho. I would also like to add that a vessel can change many category in a single year depending mainly on the ordered speed but also on the weather and the length of each voyage leg. A long ballast leg will drop the CII whereas a long laden leg will increase it.
Furthermore, since the CII readings begin from January 1st each year, if the vessel is long idle at the first days of the year, it will definitely start the year at Category “E” and it will take a couple of months (depending on the idle stay duration), until she reaches her true category.
That makes you wonder if the suggested KPI “Percentage spent at “A”, “B” etc category” is just or not.
Below attached is self explanatory. Vessel was idle until January 10th and took 12 days after sailing to grow past Category “E” and another 28 to past Category “D”:
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