CII Could Hamper Ship Operator Options in Dynamic Markets

by Ship & Bunker News Team
Tuesday March 14, 2023

Running ships at slower speeds to consume less fuel is a useful way of keeping a lid on operational costs. It is also a way of keeping a ship in line with its carbon output as determined by its Carbon Intensity Indicator (CII) rating.

But, according to the research director at shipbroker Clarksons, having to stick to a speed for one reason may mean losing out to another.

With many ships falling outside the most efficient grades on the CII index, slow speeding is seen by operators as a useful way to keep carbon costs down. If the market dictates demand a faster ship speed, that could work against the ship in terms of its carbon rating.

"The removal of the flexibility to speed up in tighter markets, introduc[es] a 'straitjacket' around the supply/demand markets of shipping," Stephen Gordon told maritime news provider Tradewinds.

And he pointed to further uncertainties to do with CII, ranging from enforcement and charterer attitudes to the ratings to the contractual challenges of CII clauses.

Under the CII grading system, a ship is graded according to its carbon efficiency as measured annually. Whichever way a ship is graded carries a cost and a change to CII grading has implications for its competitiveness in the market place.