EEXI and CII – an approaching storm?

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Shipping lawyers like me in the shipping industry often speak of the “next big thing”, but we seldom pluralise it to suggest that not one, but maybe two or even three transformational changes can be felt across the industry.

A typical example: Much has been said (including by me) about the rapid digitalization in shipping. And especially the emergence of electronic commercial documents, which have the potential to revolutionize the marketing of goods and maritime transportation as long as major commercial legal systems keep pace with technology. In the UK, the laudable initiative of the Law Commission to amend English law to bring equivalence between paper and digital commercial documents is exactly what is needed and, once in place, should be English law at the forefront Keep trading world.

However, if it seems inevitable that the sector will turn away from paper-based transactions, the timing is unknown. In my opinion, once a tipping point is reached and the industry realizes that the legal and technological challenges have been overcome, change could happen quite quickly, paving the way for widespread adoption. But it could take a lot longer.

The difference to the second “next big thing” is that the new EEXI and CII regulations of the IMO will come into force in less than 14 months on January 1st, 2023, whether you like it or not. At Reed Smith, we are seeing a growing number of inquiries about what the regulations mean for our customers’ businesses, their charter agreements, and most importantly, whether ships need to reduce speeds and / or load acceptance in order to comply. Many details and technologies have yet to be ironed out – in fact, it is reported that the International Association of Classification Societies (IACS) will only come into effect a few months before the regulations.

In short, the EEXI is a framework for determining the energy efficiency of operating ships over 400 GT that fall under MARPOL Annex VI. The CII is an operational measure of how efficiently a ship transports goods or passengers and is given in grams of CO2 emitted per cargo capacity and nautical mile. Both are central to the declared goal of the IMO to reduce ship emissions by 50% by 2050.

As always with new regulations (think IMO 2020 and low sulfur), the devil is in the details. The problem is that the details are largely unknown. The next 12 months will therefore be a critical period for the industry and could soon be like a rush to understand, invest in, and execute the right strategies by January 2023. remains to be seen.

“Much of the fleet could slow down in 2023, which a lot of people have to do because they just haven’t invested enough in energy-efficient equipment,” he said.

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