The maritime industry is facing a seismic shift as the International Maritime Organization (IMO) accelerates its decarbonization agenda. These new environmental regulations are not merely guidelines but mandatory measures designed to drastically reduce greenhouse gas emissions. While necessary for the planet, they will come at a significant financial and operational cost to the industry.
Understanding the Regulations: CII and EEXI
Two primary measures came into force recently: the Energy Efficiency Existing Ship Index (EEXI) and the Carbon Intensity Indicator (CII).
- EEXI: A one-time certification targeting the technical design of ships. Many older vessels have had to install Engine Power Limiters (EPL) to comply, effectively reducing their maximum speed.
- CII: An operational rating system (A to E) that measures how efficiently a ship transports goods. Vessels rated D or E for three consecutive years must implement a corrective action plan. This is forcing carriers to optimize routes and slow down ships to improve ratings.
The Financial Impact: Who Pays?
Shipping lines are facing billions in compliance costs. They must transition to cleaner, more expensive fuels like Low-Sulphur Fuel Oil (VLSFO), LNG, or eventually Green Methanol and Ammonia. Additionally, the EU Emissions Trading System (ETS) now requires ships to purchase carbon allowances for their emissions.
Inevitably, these costs are being passed down to cargo owners. "Green surcharges" are becoming a standard line item on freight invoices. Shippers should expect an increase in fuel-related costs of 15-20% over the next few years.
The Rise of Green Corridors
To facilitate the transition, "Green Corridors" - specific trade routes between major port hubs where zero-emission solutions are supported - are being established. For example, the corridor between Los Angeles and Shanghai is a testbed for low-carbon shipping technologies.
Strategic Advice for Sustainability
Shippers can no longer ignore the carbon footprint of their logistics. Measuring Scope 3 emissions is becoming a requirement for many corporations. Partnering with forwarders and carriers that offer carbon insetting or offsetting programs is a proactive step towards a greener supply chain.
