Global Maritime Club Virtual Forum: Spotlight on EEXI Regulatory Compliance

This session will bring together a shipowner, class society along with a naval architect to give a real-time case study of how the industry is facing the challenges and what the next steps might look like. Shipowners are under intense pressure to assess and validate the efficiency and carbon performance of existing vessels before the introduction of new indices proposed by the IMO for introduction in January 2023. Although the EEXI and CII indices have not been formally adopted as of May 2021, this is expected at the next MEPC 76 meeting in June. These short-term measures are part of the IMO’s 2030 target of reducing carbon emissions from the world fleet by 40%. This is seen as a waypoint to the IMO’s mid-century ambition of reducing global shipping emissions by at least 50%, after accounting for fleet growth over the next three decades. The EEXI is based on the Energy Efficiency Design Index and will apply to all ships above 400gt which will require assessment, possible modifications and validation within a short timeframe. There will be pressure on all fronts: undertaking the assessments, weighing up the operational and financial impact of possible modifications, choice of OEMs and, if necessary, identifying a suitable source of finding and a ship repair yard with spare capacity. Ships will then require validation. Many older ships are not expected to meet the new benchmarks without reducing speed and/or undergoing efficiency improvements. They may, in any case, become the second choice for charterers with robust ESG strategies. Access to finance may well prove a challenge as the Poseidon Principles initiative broadens its membership. The 18-month exercise is perhaps the shipping industry’s largest-ever existing ship assessment programme, requiring a vast resource commitment from ship operators themselves, marine engine companies, other OEMs, ship design and modification experts, classification societies, and ship repair yards. The exercise is also likely to involve a large capital commitment. One further issue is that the IMO’s indices will continue to tighten. So, a ship that complies in January 2023 may require further modifications in the future, and risk assessments may be required.