Maritime decarbonization: new rules for shipowners are on the way

By ASLA - Associazione degli Studi Legali Associati

di Marco Cottone*

Milan - On November 1, 2022, the new measures adopted internationally will come into force, which aim to reduce the emissions of carbon dioxide and harmful gases from existing ships with a gross tonnage exceeding 400 tons.

For each ship in circulation it will therefore be mandatory to check and comply with the so-called "Energy Efficiency Existing Ship Index" ("EEXI"), introduced in IMO with the adoption of resolution MEPC.328 (76), containing amendments to Annex VI of the International Convention for the Prevention of Pollution caused by Ships (MARPOL ) ("the resolution").

The aim of the Resolution is to reduce the gap, in terms of energy efficiency, between newly built ships and those currently in circulation. In fact, starting from January 1, 2023, the owners of existing vessels will have to quantify the CO2 emissions produced during navigation to verify that the EEXI index reached is lower than or equal to the reference one indicated by the same international standard (so-called "attained EEXI").

If the ship does not comply with this reference index, it will be the shipowner's responsibility to adapt the ship to the provisions indicated in the Resolution, adopting the necessary technical measures, including through the application of a specific energy efficiency management plan. The technical interventions must then be certified by the competent flag authority.

The measures envisaged by the Resolution have been analyzed by the Baltic International Maritime Council (BIMCO) which has identified the consequences on the contractual level in terms of the shipowner's liability in the context of time charter-parties, especially in the case of boarding. of the ship to adapt it to compliance with the EEXI indices.

For current rental contracts, the "EEXI TRANSITION CLAUSE FOR TIME CHARTER PARTIES 2021" clause was adopted which defines the cooperation obligations of the parties (Charterers and Owners) in the adoption of new international measures to which the shipowner will be required to comply starting from January 1, 2023. The clause proposed by BIMCO refers only to interventions concerning the limitation of engine power (Engine Power Limitation) and the limitation of axle power (SHAPOLI), with the purpose of adapting the ship to the provisions of the Resolution. The clause can also be used for the adoption of other technical energy saving measures that can be implemented to achieve ship compliance, subject to the agreement between the parties.

The duty of cooperation between the parties consists in the charterer's duty to provide updates to the shipowner about the ship's movements in order to allow the latter to ensure the minimum inconvenience to the shipment for EEXI modifications. On this last aspect, letter c) (iii) of the clause in question states that "the Owners shall give the Charterers not less than three (3) weeks’ written notice of the anticipated timeframe and location of such modification works".

The costs for the works and for the tests associated with the modifications are borne by the owner, as well as "any actual loss of time to the Vessel (including bunkers consumed during such time) due to the installation and trials of such modifications (including deviation, if any) shall be for the Owners' account"  (so letter c) (iv) of the clause itself).

Finally, of particular interest is the provision referred to in lett. c (vi) of the clause in question, which prohibits the charterer from giving orders to the ship to continue the voyage at speeds higher than those certified, so as to nullify the objectives of the measures adopted pursuant to the Resolution.

Another measure introduced in June 2021, which joins the EEXI index, is the so-called Carbon Intensity Indicator (CII) aimed at ships of tonnage equal to or greater than 5000 tons: this measure concerns the energy efficiency of the ship during the transport of goods and people, which is measured through a mechanism for assessing the level of performance of the ship through a rating from A (the best) to E (the worst).

Also in this case, starting from January 2023, the ships will have to comply with these criteria: if for three consecutive years the vessel is classified D or E, the shipowner will be required to present an action plan to reduce CO2 emissions with the aiming to go back at least to the letter B.

Again in the context of the strategies adopted by the IMO to reduce carbon intensity in maritime transport, it should be noted the introduction, already in 2013, of the Energy Efficiency Design Index (EEDI), aimed at shipyards with the aim of developing the logic of construction aimed at improving the energy performance of ships by reducing emission capacity.

The measures described above are part of a broader plan implemented by the international community, which has the dual objective of reducing CO2 emissions by 30% by 2030 and by 70% by 2050, referring to data recorded in 2008.

However, these tools will be subject to continuous monitoring in order to verify their effectiveness and impacts on the shipping industry and the environment. In the aforementioned Resolution, for example, the possibility is provided for, by the IMO bodies, to verify the implementation status of the EEXI parameters with the aim of adopting further amendments to improve the environmental protection system.

*Lawyer, Managing Associate - Department of Navigation and Transport Law - Legance - Associated Lawyers