Report of ISWG GHG 8 - 24 to 28 May 2021

A lot of progress was made on the technical details of the EEXI and CII guidelines during the ISWG GHG 8 meeting held this week, thanks to the excellent chairmanship of Mr. Sveinung Oftedal (Norway).

But the spirit of consensus maintained by the latter did not allow the thorniest subjects to be resolved (Guidelines CII G3 in particular).

Thus, the discussion on the reduction trajectory by 2030 gave rise to bitter debates and fairly deep divisions have emerged between Member States that do not share the same approaches to climate issues.

Anticipating the serious consequences that the absence of a proposal for the coming decisive MEPC 76, a compromise was nonetheless agreed, thanks to the willingness of some delegations, even unhappy with the proposed reduction rates.

Likewise, the issue of Correction factors and Travel exclusions turned out to be too delicate to be dealt within the space of a few days and was therefore referred to post-MEPC 76 work, within a new Correspondence Group.

Guidelines supporting the EEXI framework

ISWG GHG 8 finalized a new version of the draft Guidelines on the method of calculation of the attained energy efficiency existing ship index (EEXI), for adoption at MEPC 76 (item 1 and annex 1 of this report) :

• ISWG GHG8 agreed to set the power of main engines at 83% of the limited installed power (MCRlim) or 75% of the original installed power (MCR), whichever is lower.
• ISWG considered that the proposals for additional alternative method to determine Vref, by using empirical data from sea trial tests were not mature enough to be included in the guidelines for adoption at MEPC 76 ; it has encouraged interested Member States and international organizations to cooperate on this issue with a view to incorporating alternative method in a future review of the guidelines.
• ISWG GHG8 agreed to include the fcorrection factor for ro-ro cargo ships (vehicle carriers) in the draft guidelines on the method of calculation of the attained EEXI, for ro-ro cargo (vehicle carriers) ships with DWT/GT of less than 0.35.

ISWG GHG 8 finalized a new version of the draft 2021 guidelines on survey and certification of the energy efficiency existing ship index (EEXI), for adoption at MEPC 76 (item 2 and annex 2 to this report).

• ISWG agreed that numerical calculations may be accepted as a replacement of model tests. In this regard, numerical calculations could be used independently.

ISWG GHG 8 finalized a new version of the Draft Guidelines on the Shaft/Engine Power Limitation System to comply with the EEXI requirements and use of a power reserve, for adoption at MEPC 76  (item 3 and annex 3 to this report).

• ISWG agreed to incorporate the proposals in the draft guidelines to facilitate processes when a ship overrides the EPL or ShaPoLi limitations for safety reasons

Guidelines supporting the CII framework

ISWG GHG 8 finalized a new version of Draft Guidelines on operational carbon intensity indicators and the calculation methods (CII guidelines, G1) for adoption at MEPC 76 (item 4 and annex 4 to this report).

• ISWG GHG agreed to not change, as already accepted for Ro-ro cargo ship (vehicle carrier) and Ro-ro passenger, the metric from AER to cgDIST for ro-ro cargo ships.
• ISWG GHG agreed to not reflect onboard CO2 capture.
• ISWG GHG agreed to assess and discuss the proposals for correction factors and voyage exclusions using as guidance of assessment criteria proposed by France, which were based on similar criteria for EEDI correction factors. These criteria would primarily serve as guidance for decision making, and agreed to include in the resolution text of the draft CII calculation guidelines the need to further consider the proposals for correction factors with a view to enhancing the guidelines before entry into force of the short-term measure.
• ISWG also suggested that the correction factors should be included in a new set of guidelines, as appropriate, at MEPC 78 at the latest to allow for the industry to prepare the fleet before entry into force of the CII measure.
• ISWG suggested that the Correspondence Group, if established, could further consider possible approaches for voluntarily collecting, verifying and reporting CII data for trial purposes, including developing the associated reporting format and verification procedure to ensure reliability and transparency of these data.

ISWG GHG 8 finalized the Draft Guidelines on the reference lines for use with operational carbon intensity indicators (CII Reference line guidelines, G2), with a view of adoption at MEPC 76 (item 5 and annex 5 to this report).

• ISWG GHG agreed to keep the reference lines suggested by the CG. However, it recognized that these reference lines might be improved subsequently when more data would become available.
• ISWG noted that the manner to integrate High-Speed Crafts (HSC) in the CII framework would merit further consideration,
• ISWG GHG did not endorse proposal from Interferry to split the ro-ro cargo sector into two size bins, below and above 25,000 DWT,
• ISWG GHG did not retain proposal from World Shipping Council to split vehicle carrier fleet in three distinct reference lines.

Despite an obvious dissatisfaction from many representatives of Member States, ISWG GHG 8 finalized the draft guidelines on the reference lines (G3) with a view to adoption by MEPC 76 (item 6 and annex 6 to this report).

• ISWG GHG supported a flat reduction factor at the global fleet level as a starting point. But, prior to entry into effect of the regulation, this approach should be refined in the guidelines to reflect ship-type specific values using updated data and information
• ISWG GHG considered that the IMO could continue to monitor development in annual carbon intensity improvement using both the AER (demand approach) and EEOI (supply approach) in parallel to the annual analysis of the fuel consumption data reported to the IMO DCS.
• ISWG GHG agreed to the principle that a reduction effort (Z-factor) could follow a non-linear curve until 2030, and that the stricter reduction rates after 2026 could be considered for confirmation as part of the review
• This non-linear curve will consist of three consecutive phases, with the understanding that the Z-factor for:
• phase 1(2020-22) is similar to business as usual carbon intensity improvement until entry-into-force ;
• phase 2 (2023-26) is defined as 2%;
• phase 3 (2027-30) will be further strengthened and developed taking into account the review of the short-term measure.

ISWG GHG 8 has finalized the draft Guidelines on the operational carbon intensity rating of ships (CII Rating Guidelines-G4), with a view to adoption by MEPC 76 (item 7 and annex 7 to this report)

ISWG GHG has decided to keep the rating boundaries set by the CG, recalling that the reference lines were already size-dependent but recognized that some adjustments could still be done on this matter.

ISWG GHG agreed that all proposals addressing inequities between ship types (i.e. correction factors, refined reference lines, etc.) should be considered holistically within the CG to be established by MEPC 76.

Regarding the update of the 2016 Guidelines for the development of a Ship Energy Efficiency Management Plan (SEEMP) (resolution MEPC.282(70)),

ISWG GHG  has decided to keep the rating boundaries set by the CG, recalling that the reference lines were already size-dependent but recognized that some adjustments could still be done on this matter.

ISWG GHG agreed that all proposals addressing inequities between ship types (i.e. correction factors, refined reference lines, etc.) should be considered holistically within the CG to be established by MEPC 76.

ISWG GHG not agreed to a proposal for the SEEMP guidelines to include an option for compliance at company/fleet level.

Due to time constraints, the ISWG could not consider following items :

• Update of other existing guidelines, procedures and guidance (to be addressed by the CG) ;
• List of technical guidelines that could be consolidated into a mandatory carbon intensity code (to be addressed at next ISWG GHG.

Owing to the high amount of work still to be carried-out, a new Correspondence group on carbon intensity reduction should be established by MEPC 76 with some heavy tasks to carry out:

• develop draft guidelines on correction factors for certain ship types, operational profiles and/or voyages for the CII framework (new G5);
• further consider and finalize the draft updated Guidelines for the development of a Ship Energy Efficiency Management Plan (SEEMP);
• further consider and update existing guidelines.

A new ISWG GHG 9 should be held also 18-22 October 2021, before MEPC 77.