Zero-emission shipping

What is sustainable shipping?

Maritime shipping is widely considered as one of the more environmentally friendly means of transporting cargo. Having said that, it still accounts for nearly 3% of all global carbon emissions. Furthermore, it significantly contributes to the sound, water, and plastic pollution of the ocean. Some experts warn that without prompt and decisive action, we could see shipping’s contribution to global carbon emissions increase by as much as 10-13% in just a few decades. It is clear, therefore, why there is currently so much talk around making shipping more sustainable.

We must remember that the concept of sustainable shipping extends far beyond just environmental impacts. The green transformation of ocean shipping encompasses the environmental, economic, and social aspects of the industry. And here at Sea, we believe that informed decision-making is key to enabling the changes needed to make shipping more sustainable and unlock a better future for all.

The journey to carbon neutral shipping by 2050

In line with the 2015 Paris Agreement and Europe’s goal of climate neutrality by 2050, the European Union (EU) has taken a number of proactive measures to encourage reductions in emissions from maritime transport. In July 2023 the International Maritime Organization (IMO) set targets to reduce greenhouse gas (GHG) emissions from shipping and committed to implementing new measures by 2025 – and global efforts to improve the industry’s environmental performance have been gaining momentum ever since.

As international concern about climate change escalates, adherence to these regulations is not only a legal obligation but also a necessary step toward fostering a more sustainable and environmentally conscious shipping industry.

Paris Agreement: a global framework to avoid dangerous climate change by limiting global warming to well below 2°C and pursuing efforts to limit it to 1.5°C.

What are the carbon regulations in the shipping industry?

Given that CO2 accounts for around 76% of shipping’s total GHG emissions, the gas is firmly in the spotlight. The table below sets out a timeline of current and upcoming mandatory carbon regulation for the shipping industry.

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Deadline

Regulations

January 2023

IMO EEXI and CII shipping regulations

The regulations require all ships to:

  • Assess their energy-efficiency by calculating their Energy Efficiency Existing Ship Index (EEXI)

EEXI helps us understand how efficient a vessel is in terms of fuel consumption and carbon emissions. It measures how well a ship uses energy, based on its operational and design characteristics.
  • Begin collecting data for reporting their yearly operational carbon intensity indicator (CII) and CII rating.

The CII calculation measures how much CO2 emissions a ship produces per unit of transportation work, often measured in grams of CO2 emitted per tonne-mile. The CII helps to evaluate and compare the environmental impact of different ships, promoting transparency and encouraging the maritime industry to improve its carbon efficiency.

If we look at CII vs EEOI, the CII calculation is more focused on regulatory compliance and assessing a vessel’s overall carbon intensity, whereas the EEOI calculation is a practical operational tool for shipowners and operators to monitor and improve the energy efficiency of their vessels during daily operations. Both metrics play important roles in promoting sustainability and reducing the environmental impact of the maritime industry.

January 2024

EU-ETS: Maritime transport will be included in the Emissions Trading System

In shipping, the European Union Emissions Trading System (EU-ETS) is a regulatory framework, established by the EU to control and reduce GHG from maritime activities. It operates on a cap-and-trade system, where ship operators are allocated a certain number of emissions allowances. If a ship emits more than its allocated allowances, it must buy additional permits. This system incentivises emissions reduction and aligns with the EU’s broader efforts to achieve climate neutrality.

The EU-ETS covers:

  • CO2 (carbon dioxide) – from 2024 onwards
  • CH4 (methane) – from 2026 onwards
  • N2O (nitrous oxide) – from 2026 onwards

There is an initial phase-in period to ensure a smooth transition. During this time, shipping companies only have to surrender allowances for a portion of their emissions, as follows:

  • 2025 – for 40% of their emissions reported in 2024
  • 2026 – for 70% of their emissions reported in 2025
  • 2027 onwards – for 100% of their reported emissions

2030

Indicative checkpoints

By 2030, the IMO has set targets to:

  • Reduce GHG emissions from ships by at least 20% (striving for 30% compared to 2008 levels)
  • Increase the uptake of zero or near-zero GHG emission technologies, fuels and/or energy sources by at least 5% (striving for 10%)

2040

Indicative checkpoints

By 2040, the IMO has set targets to:

  • Reduce GHG emissions from ships by at least 70% (striving for 80% compared to 2008 levels)

2050

Zero-Emission Shipping

Indicative checkpoints

By 2050, the IMO has set targets to:

  • By 2050, the EU has set targets for zero emissions from shipping
  • By 2050, the IMO has set net zero emissions targets for shipping

January 2023

IMO EEXI and CII shipping regulations

The regulations require all ships to:

  • Assess their energy-efficiency by calculating their Energy Efficiency Existing Ship Index (EEXI)

EEXI helps us understand how efficient a vessel is in terms of fuel consumption and carbon emissions. It measures how well a ship uses energy, based on its operational and design characteristics.
  • Begin collecting data for reporting their yearly operational carbon intensity indicator (CII) and CII rating.

The CII calculation measures how much CO2 emissions a ship produces per unit of transportation work, often measured in grams of CO2 emitted per tonne-mile. The CII helps to evaluate and compare the environmental impact of different ships, promoting transparency and encouraging the maritime industry to improve its carbon efficiency.

If we look at CII vs EEOI, the CII calculation is more focused on regulatory compliance and assessing a vessel’s overall carbon intensity, whereas the EEOI calculation is a practical operational tool for shipowners and operators to monitor and improve the energy efficiency of their vessels during daily operations. Both metrics play important roles in promoting sustainability and reducing the environmental impact of the maritime industry.

January 2024

EU-ETS: Maritime transport will be included in the Emissions Trading System

In shipping, the European Union Emissions Trading System (EU-ETS) is a regulatory framework, established by the EU to control and reduce GHG from maritime activities. It operates on a cap-and-trade system, where ship operators are allocated a certain number of emissions allowances. If a ship emits more than its allocated allowances, it must buy additional permits. This system incentivises emissions reduction and aligns with the EU’s broader efforts to achieve climate neutrality.

The EU-ETS covers:

  • CO2 (carbon dioxide) – from 2024 onwards
  • CH4 (methane) – from 2026 onwards
  • N2O (nitrous oxide) – from 2026 onwards

There is an initial phase-in period to ensure a smooth transition. During this time, shipping companies only have to surrender allowances for a portion of their emissions, as follows:

  • 2025 – for 40% of their emissions reported in 2024
  • 2026 – for 70% of their emissions reported in 2025
  • 2027 onwards – for 100% of their reported emissions

2030

Indicative checkpoints

By 2030, the IMO has set targets to:

  • Reduce GHG emissions from ships by at least 20% (striving for 30% compared to 2008 levels)
  • Increase the uptake of zero or near-zero GHG emission technologies, fuels and/or energy sources by at least 5% (striving for 10%)

2040

Indicative checkpoints

By 2040, the IMO has set targets to:

  • Reduce GHG emissions from ships by at least 70% (striving for 80% compared to 2008 levels)

2050

Zero-Emission Shipping

Indicative checkpoints

By 2050, the IMO has set targets to:

  • By 2050, the EU has set targets for zero emissions from shipping
  • By 2050, the IMO has set net zero emissions targets for shipping

How will the regulations change the shipping industry? How do we help facilitate the change?

Learn more about our purpose of powering better decisions to enable sustainable shipping.

Powering better decisions to enable sustainable shipping

Are you ready for the new regulations? Manage your carbon exposure with Sea

Optimisation starts and ends with precise measurement. And that’s exactly what Sea’s Carbon Exposure and Carbon Tracking and Monitoring solutions provide. Specially developed for the maritime industry, our software plays a central role in reducing your carbon output. In fact, our Carbon Tracking tool has already recorded +14 million tonnes of carbon and +800 million tonnes of maritime cargo since it was launched.

Sea’s range of cutting-edge solutions not only help you stay compliant with evolving regulations, they also offer industry benchmarking. Whatsmore, our leading technology enables you to gather crucial information in order to facilitate optimal chartering decisions, such as selecting vessels with lower carbon emissions to minimise the maritime carbon footprint and more effectively address the impact of climate change.

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Carbon Exposure

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