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Editorial comment

Guest Comment


Dominic McKnight Hardy
Managing Director, MIS Marine

Joe Anderson
Lead data scientist, MIS Marine

Recently, the challenges of the energy and digital transitions have been dominating and competing for attention. The combination of ongoing attacks on vessels in the Red Sea, the rise of the ‘dark fleet’ due to the Ukrainian-Russian conflict, and the prolonged drought in the Panama Canal have added another layer of complexity to global shipping.

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One significant but often-overlooked consequence of the Red Sea attacks is the impact on a vessel’s Carbon Intensity Indicator (CII) grade when rerouting around the Cape of Good Hope. Providing vessels with an annual score, CII letter grades indicate the operational efficiency of a vessel over a 12-month period. Recent data from MIS Marine reveals that vessels tend to sail around the Cape approximately 10% faster compared to the Red Sea route, in what could be an attempt to mitigate the impacts to commercial schedules. For a 100 000 DWT gas tanker, this increase in speed translates to an additional fuel consumption of 291 t and a consequent increase of emissions of 920 t of carbon dioxide, compared to transiting the Suez Canal. Consequently, this would result in a 17% increase in carbon intensity under the CII framework, posing a considerable risk of a negative change in the vessel’s annually calculated letter rating.

A vessel’s CII letter rating is determined annually for a calendar year based on its operational performance. Therefore, any temporary changes in a vessel’s performance caused by external factors, especially if these alterations persist for several months, could lead to a revision in the vessel’s calculated CII grade during the annual assessment. With the potential for widespread impacts, ongoing deterioration of CII is a worry for the whole supply chain. The current Cape scenario emphasises the need for solutions that calculate carbon performance based on known values, providing a real-time assessment of carbon intensity within an actual voyage.

MIS is leading the way in applying relevant sources of vessel data, especially engine characteristics, along with operational information from geospatial data and weather/tide data, to calculate a carbon intensity value for a given voyage. This allows charterers to determine their expected carbon accountability and associated costs for the period of a voyage.

While still at a relatively early stage of CII’s rollout, it is vital that the industry recognises the importance of addressing these issues early on and implementing effective solutions to ensure the long-term success and sustainability of shipping’s carbon goals. In forgoing this functionality, CII is at risk of failing the industry, pricing players out of the market based on temporary situations that arise beyond their control. As the initial wave of CII ratings now begin to play a part in chartering decisions, it will be interesting to observe how the industry responds to this additional layer of decision-making complexity, and the changes it will warrant.