How Carbon Intensity Indicator and the EU Emission Trading System impact routing
At Syroco, we understand the impact of carbon-related regulations on the daily operations of ships - and we also understand how complex it can be to predict the effects of operations on vessel ratings and carbon taxes.
Beyond the primary goal of the platform - optimise energy efficiency and reduce carbon emissions - Syroco EfficientShip implements a set of carbon-related capabilities, some of which are listed below. All these features are designed to ensure that carbon regulations are accounted for in the routing methodology.
CII and EU ETS in a nutshell
The CII (Carbon Intensity Indicator) is a measure for a ship’s energy efficiency and is given in grams of carbon emitted per cargo-carrying capacity of the ship and nautical mile sailed. Each ship, based on her performance, will receive an environmental rating ranging from A (major superior) to E (inferior performance level). The CII must be calculated and reported every year, based on prior year operations (starting in 2024 for 2023 operations). While a “poor” CII rating will not (yet) prevent a ship from operating, it will require actions to analyse and correct performance.
The EU’s Emission Trading System (EU ETS) is an emission cap-and-trade system where a limited amount of emission allowances (the cap) is put on the market and can be traded. Under the EU ETS, every company operating ships (above 5,000 GT) in the EU/EEA is required to surrender emission allowances corresponding to a certain amount of its emissions emitted over a calendar year. In plain English, this means that ships entering EU ports, regardless of the flag they fly, will need to submit their emissions data and to buy “EU Allowance” certificates to compensate for these emissions (after applying certain “discounts”). This requirement is starting in 2025 for 2024 operations.
Including the cost of EU Allowances in route selection objectives
When computing routes, EfficientShip uses accurate metocean data to evaluate fuel consumption and carbon emissions based on the digital twin of the vessel. To include EU Allowances in the equation, EfficientShip augments the algorithm with fuel and voyage data, including:
- Departure, destination, stoppage and arrival ports (including any transhipment port)
- Status of the ship and/or type of operation with regards to exemptions to the EU ETS regulation (for example: ships performing public service obligations)
- If applicable, type of fuels used during each segment, especially lower-carbon fuels (LNG, e-fuels and bio-fuels, etc.)
- Fuel consumed while at berth in applicable ports
Using this data, EfficientShip returns an accurate estimate of the supplemental cost induced by the EU Allowances that will be required to compensate for emissions. This supplemental cost is incorporated into the routing algorithm and can be used as part of the multi-objective route selection.
Use CII target in routing objectives
Similarly to the EU ETS Allowances calculation, EfficientShip computes the impact of each trip on the Carbon Intensity Indicator rating of the vessel. To perform this calculation, the algorithm is augmented with vessel, fuel and voyage data, including:
- Cargo capacity of the vessel
- Exact distance travelled
- Departure, destination, stoppage and arrival ports
- Segments of the voyage that qualify for CII adjustment, including search and rescue operations, avoidance of navigational hazards such as icebergs, piracy or war risk, etc.
- If applicable, type of fuels used during each segment, especially lower-carbon fuels (LNG, e-fuels and bio-fuels, etc.)
- Fuel consumed while at berth
Using this data, and data from prior voyages during the year, EfficientShip returns an accurate estimate of the impact of the voyage on the vessel’s CII. This impact is incorporated into the routing algorithm and can be used as part of the multi-objective route selection.