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GARD: The challenges of CII compliance – Cooperation is key

‘CII regulation is likely to alter the traditional division of responsibilities between owners and time charterers, and may significantly change the way vessels are operated,’ states spokesman.

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Maritime protection and indemnity (P&I) club Gard on Friday (25 November) published an article looking at certain key features of IMO’s Carbon Intensity Indicator (CII) regulation which will be coming into force next year.

“The CII regulation is likely to alter the traditional division of responsibilities between owners and time charterers, and may significantly change the way vessels are operated,” stated Siddharth Mahajan, Senior Loss Prevention Executive, at the Singapore office of Gard.

The CII regulation

The Carbon Intensity Indicator or CII is a rating system developed by IMO for all cargo, Ro-pax and cruise vessels above 5,000 GT whereby vessels will be rated for their operational Carbon Intensity for each calendar year, starting in 2023. Operational carbon intensity performance of different types of ships from 2019 will be used as a reference. 

Below are some key points of the CII regulations.

  • CII Rating: Based on a vessels carbon intensity, vessels will be given a rating between A and E, with ‘E’ being for vessels that are worst emitters under the CII regime. Calculations will be based on data reported by the vessel under the IMO Data Collection System (DCS), which has been in force since 2018.
  • Actions after receiving rating ‘D’ or ‘E’: A vessel that is rated ‘D’ for three consecutive years or ‘E’ for a single year, will have to update their Ship energy Efficiency Management Plan (SEEMP) Part III with a corrective action plan showing how the vessel will achieve a rating of ‘C’, and this will then have to be verified by the Flag State or the Classification Societies in their role as Recognised Organizations (RO). This plan will then have to be implemented onboard.
  • Correction factors and voyage adjustments: IMO has agreed to various correction factors and voyage adjustments which may be applied to the calculation of the attained CII, for example any emission necessary for the purpose of securing the safety of a ship or saving life at sea, fuel consumed in relation to STS voyages, fuel consumed for production of electrical power used for refrigerated containers or cargo cooling/re-liquefaction systems on gas carriers, fuel used in cargo heating etc. The need for further adjustments is still under discussion.
  • Progressive reduction of carbon intensity: IMO’s objective is to continuously improve a vessel’s operational carbon intensity. Therefore, a phased approach has been adopted whereby the carbon intensity limits will progressively reduce by 2% each year. This requires owners and managers to continuously work on improving a vessel’s carbon intensity, or else her rating could degrade over time.As an example, if a 62,000 t DWT bulk carrier has a carbon intensity of 5.50 g CO2/t-nm for 2023, then she will be rated as ‘D’ for that year. Assuming no improvements or changes are made to how the ship is managed or operated in the subsequent year, then for the same carbon intensity of 5.50 g CO2/t-nm she will be rated as ‘E’ at the end of calendar year 2024. This is because the ‘required CII’ for this vessel has reduced in this two-year period.
  • Ship Energy Efficiency Management Plan (SEEMP) Part III: Vessels subject to CII regulations must develop a ship specific SEEMP Part III to include things such as, ‘CII calculation methodology’, ‘Required CII values until 2026’, ‘implementation plan for achieving the required CII’, and ‘procedures for self-evaluation & improvement’. Vessels will already have onboard SEEMP Part I, that relates to improving energy efficiency, and Part II which focusses on procedures for monitoring and collecting fuel oil consumption data. The requirements for SEEMP Part I and Part II came into force in 2018.
  • Incentives for better performing vessels: IMO encourages Administrations and port authorities to provide incentives to ships rated as A or B. However, there is no guidance provided by the IMO on what form these incentives should take. We are not yet aware of any authorities introducing such incentive schemes based on CII ratings, but we do expect to see some in the future.

Note: The complete article “The challenges of CII compliance – Cooperation is key” including segments on ‘Factors affecting CII’, ‘Important considerations’, can be viewed here.

 

Photo credit: CHUTTERSNAP from Unsplash
Published: 28 November, 2022

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Alternative Fuels

Yang Ming orders six LNG dual-fuel, ammonia-ready containerships from Hanwha Ocean

Each of the six new vessels will have a capacity of up to 13,650 TEU and feature LNG dual-fuel propulsion and Ammonia Fuel Ready specifications.

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Yang Ming orders six LNG dual-fuel, ammonia-ready containerships from Hanwha Ocean

Taiwanese shipping firm Yang Ming Marine Transport Corporation (Yang Ming) and South Korean shipbuilder Hanwha Ocean on Wednesday (2 September) signed a shipbuilding contract for six 13,000 TEU class LNG dual-fuel container vessels. 

The contract was signed by Dr. Chuck Tsai, Chairman of Yang Ming, and Mr. Charles Kim, CEO of Hanwha Ocean. The vessels are scheduled for delivery between 2028 and 2029. 

They will complement Yang Ming’s existing fleet of 10,000+ TEU vessels and serve as key vessels on East-West services, with deployment flexibility across trade lanes connecting Asia with the East and West Coasts of North America, South America, and the Mediterranean. 

Each of the six new vessels will have a capacity of up to 13,650 TEU and feature LNG dual-fuel propulsion and Ammonia Fuel Ready specifications.

“As Yang Ming transitions toward net-zero emissions, LNG provides a relatively mature and economically viable alternative fuel solution, capable of reducing greenhouse gas emissions by approximately 20%,” the company said. 

“At the same time, ammonia can serve as a carbon-free fuel by utilising converted LNG storage facilities, while offering relatively lower conversion costs and comparatively well-developed supply chains and infrastructure. The Ammonia Fuel Ready design will therefore provide Yang Ming with greater flexibility in responding to increasingly stringent international regulations on greenhouse gas emissions.”

In addition, the vessels will be equipped with Type B LNG fuel tanks with a design pressure of 1.0 bar to enhance the safety and efficiency of LNG operations, together with a range of energy-saving technologies, including Wind Shields, Rudder Bulbs, Pre-Swirl Stators, and Shore Power Systems. Smart ship technologies and cybersecurity protection features will also be incorporated to enhance operational efficiency, safety, and reliability while effectively reducing fuel consumption and greenhouse gas emissions.

Deliveries under Yang Ming’s next-generation fleet optimization plan commenced earlier this year. By 2030, a total of 24 new vessels are expected to enter service. 

This includes 18 LNG dual-fuel vessels—comprising five 15,500 TEU, seven 16,000 TEU, and the six 13,000 TEU vessels under this contract—alongside six 8,000 TEU methanol dual-fuel-ready ships. 

 

Photo credit: Yang Ming Marine Transport
Published: 4 September, 2026

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Alternative Fuels

LR, China’s MARIC unveil tanker concept ready for three future bunker fuels

Both secured AiP for a new 114,000 DWT product and crude oil tanker designed to accommodate future conversion to LNG, methanol or ammonia.

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LR, China’s MARIC unveil tanker concept ready for three future bunker fuels

Lloyd’s Register (LR) and the Marine Design and Research Institute of China (MARIC) on Thursday (3 September) have secured Approval in Principle (AiP) for a new 114,000 DWT product and crude oil tanker designed to accommodate future conversion to LNG, methanol or ammonia.

Announced at SMM 2026, the concept addresses one of the biggest investment challenges facing shipping today: the need to develop vessels and capabilities that can support a range of alternative fuel options and pathways as technologies, infrastructure and regulations evolve.

While LNG is already a mature fuel pathway, methanol and ammonia remain at an earlier stage of development, with questions around global fuel availability, infrastructure development, economics and long-term adoption.

The 114,000 DWT tanker concept has been designed as a product and crude oil carrier that can accommodate future conversion to LNG, methanol or ammonia as technologies, regulations and fuel supply chains mature. By incorporating conversion readiness at the design stage, the concept aims to reduce future retrofit complexity and provide owners with greater confidence when planning long-term fleet investments.

The design concept was reviewed against LR’s July 2026 class rules and regulations, including requirements relating to ships using gases and other low-flashpoint fuels, alongside relevant IACS Common Structural Rules for oil tankers. Final classification and statutory approval remain subject to full compliance with all applicable rules and regulations.

Theo Kourmpelis, Global Business Director for Tankers, Lloyd’s Register, said: “Shipowners are being asked to make major investment decisions today despite continued uncertainty around which fuels will dominate in the decades ahead. Alternative fuel solutions each offer potential pathways to compliance, but fuel infrastructure, regulation and economics continue to evolve at different speeds around the world.

“Designs that preserve flexibility will be critical in helping owners manage risk while preparing for multiple future scenarios.”

Si Nan, Marine & Offshore Marketing Department Vice Director, MARIC, said: “As the industry explores different decarbonisation pathways, shipowners need vessel designs that can adapt alongside technological and regulatory developments. This concept was developed specifically to provide greater fuel flexibility and long-term resilience, allowing owners to respond to changing market requirements without being locked into a single fuel strategy.

“Receiving Approval in Principle from Lloyd’s Register is an important milestone that validates the design concept and supports its future development.”

 

Photo credit: Lloyd’s Register
Published: 4 September, 2026

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Alternative Fuels

DNV: Alternative-fuelled vessel orders hit highest monthly level since October 2024

LNG-fuelled vessels accounted for the vast majority of August activity while the strong summer performance marked a significant acceleration in ordering activity after a relatively slow start to the year.

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DNV: Alternative-fuelled vessel orders hit highest monthly level since October 2024

Latest data from classification society DNV’s Alternative Fuels Insight (AFI) platform alternative-fuelled vessel ordering was strong in August, with 52 new vessels added to the platform.

This is the highest monthly total since October 2024 and follows another active month in July, when 47 vessels were added to the database.

LNG-fuelled vessels accounted for the vast majority of August activity, with 46 orders recorded. The container segment led the way with 30 orders, while the car carrier segment contributed a further 12 LNG-fuelled vessels. In addition, four ethanol-fuelled bulk carriers and two hydrogen-powered bulk carriers were added during the month, as well as one LNG bunker vessel.

The strong summer performance marked a significant acceleration in ordering activity after a relatively slow start to the year. In total, 242 alternative-fuelled vessel orders have been placed in the first eight months of 2026, representing a 27% increase compared with the same period in 2025.

LNG remains the dominant fuel choice, accounting for 63% of all alternative-fuelled vessel orders registered so far this year. Container vessels represent the largest share of these LNG orders (59%), followed by car carriers (30%).

Jason Stefanatos, Global Decarbonization Director at DNV Maritime, said: “The past two months have been particularly strong for alternative-fuelled vessel ordering, with August recording the highest monthly total we’ve seen since October 2024. This has helped lift year-to-date orders to a level well above the same period last year.

“LNG remains the leading fuel choice, driven largely by activity in the container and car carrier segments. These sectors have been among the earliest adopters of alternative fuels, supported by predictable liner operations and increasing demand from cargo owners to reduce emissions across supply chains. 

“For many owners, LNG offers a combination of emissions reductions, fuel availability and future flexibility while the longer-term fuel landscape continues to evolve. 

“At the same time, the latest figures include orders for ethanol- and hydrogen-fuelled vessels, highlighting that owners continue to explore a range of decarbonization pathways. Different segments are making different fuel choices, but the overall level of activity demonstrates continued investment in lower-emission shipping.”

Screenshot 2026 09 04 at 12.29.26 PM Screenshot 2026 09 04 at 12.29.36 PM

 

Photo credit: DNV
Published: 4 September, 2026

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