Carbon Intensity Indicator (CII): A Guide for Operators

Of the three regimes now bearing down on operational emissions, the Carbon Intensity Indicator is the one that behaves least like a regulation and most like a credit rating. It does not fine you. It does not, on its own, cost you an allowance. It attaches a letter from A to E to each ship, every year, and lets the commercial market decide what that letter is worth. For a technical or fleet manager that is a stranger kind of pressure than a straight penalty, because the bill, when it comes, arrives through the charter market rather than from a regulator.

This guide sets out what CII is, how the number is built, what the bands mean, and what actually happens to a ship that rates poorly. It is written for the people who have to act on the rating, not the people who verify it.

What the Carbon Intensity Indicator is, and what it isn't

CII came into force under MARPOL Annex VI on 1 January 2023, applying to ships of 5,000 gross tonnage and above, the same ships already reporting fuel use under the IMO Data Collection System. It measures operational carbon intensity: how much CO2 a ship emits to move cargo a given distance over a calendar year.

It is worth being precise about what that makes it. It is not a one-off design figure, that is the EEXI, fixed at the drawing board. CII is a rolling annual measure of how the ship is actually run, voyage after voyage. And it is not an environmental scorecard you can file and forget. The rating is calculated from verified data and it increasingly travels into charter negotiations. It is closer to a constraint on where and how your tonnage can trade than to a sustainability KPI.

How CII differs from EEXI, and where it sits

CII is easily confused with the EEXI, the Energy Efficiency Existing Ship Index, because the two arrived together. The distinction matters. EEXI is a design figure, calculated once, that asks whether a ship is technically capable of a given efficiency; a ship either meets it or is modified until it does. CII asks a different question every year: not what the ship could do, but what it actually did. A vessel can clear its EEXI comfortably and still rate D on CII purely because of how it was operated.

CII is also only one of three regimes now pricing the same fuel. FuelEU Maritime targets the greenhouse-gas intensity of the energy a ship uses, and the EU Emissions Trading System puts a direct cost on the carbon it emits. The three share neither a methodology nor a calendar, and they all rest on the same underlying operational data. Reading CII in isolation misses how it sits alongside the other two.

How CII is calculated: attained AER, in plain terms

For tankers, bulk carriers and most cargo ships, the attained CII is the Annual Efficiency Ratio. It is the total CO2 emitted in the calendar year, divided by the ship's deadweight tonnage multiplied by the total distance sailed. The unit is grams of CO2 per deadweight-tonne-mile.

In plain terms: emissions on top, capacity times distance underneath. Burn less fuel for the same transport work and the number falls. Sail fewer miles for the same fuel and it rises. The CO2 figure is not measured directly, it is derived from the fuel you report you burned, which is the first reason the quality of your reported data is not a side issue. That denominator, distance sailed against deadweight rather than cargo actually carried, is also where most of the controversy lives, and we return to it below.

One caveat on the metric. The AER, built on deadweight, is the measure for tankers, bulk carriers and most cargo ships. A few ship types, cruise ships and ro-pax among them, are rated on a variant built on gross tonnage instead, because deadweight is a poor proxy for what those ships carry. For the dry and tanker fleets this guide is written for, AER is the figure that matters.

Required CII and the annual reduction factor: the moving target

Having an attained number is only half of it. It is judged against a required CII for that ship's type and size. The required figure starts from a reference line, set from how the 2019 fleet performed, and is then tightened each year by a reduction factor.

The schedule runs down: 5 percent below the 2019 line in 2023, 7 percent in 2024, 9 percent in 2025, and 11 percent in 2026. The factors beyond 2026 sit inside the review the IMO committed to, so the one thing you can plan around is that the line keeps falling. A ship that holds its operations exactly steady will still see its rating drift worse over time, simply because the bar rises underneath it.

The A to E rating bands, and where the boundaries sit

Comparing the attained CII with the required value gives a ratio, which falls into one of five bands. The boundaries are set per ship type:

• •A: major superior performance, comfortably ahead of the required line
• •B: minor superior performance
• •C: moderate, the band that meets the required CII, the pass mark
• •D: minor inferior performance, below the line
• •E: inferior performance, the worst band

C is the mark to clear. A and B sit ahead of it; D and E fall behind, and they are where the consequences attach. Because the bands are measured against the required line, and the line tightens each year, yesterday's C can become tomorrow's D with no change at all in how the ship is operated.

What a D or E rating actually triggers

The measure has teeth on the worst performers. A ship rated D for three consecutive years, or E for a single year, has to develop a plan of corrective actions, set out in Part III of its Ship Energy Efficiency Management Plan, showing how it will reach C. That plan is reviewed, and the ship's progress against it is checked.

There is no direct fine written into the measure itself. The pressure is procedural, you owe a plan and have to act on it, and, more sharply, commercial. Charterers have not waited for a penalty to exist. Time charter parties increasingly carry CII clauses, BIMCO published a standard one in 2022, that govern who is responsible for the rating and what happens when a ship slips. A poor rating narrows the pool of charterers willing to take the ship, and shapes the terms when they do. That is the bill, arriving through the market rather than from a regulator.

Where the methodology is contested

It would be dishonest to present CII as a settled, uncontested measure, because it is neither, and a technical audience knows it. The central complaint is the denominator. Because the metric rewards distance sailed, a ship that spends time waiting, at anchor off a congested port, idling on charterer's orders, drifting between cargoes, burns fuel without adding the miles that would offset it, and its rating suffers for time it did not control. The measure can reward sending a ship the long way round and penalize the operationally sensible call.

It also leans on deadweight rather than cargo actually carried, so a part-laden ship and a full one can look very different for reasons that have nothing to do with efficiency. The IMO recognized these problems and built in a review of the short-term measure, with scope to refine the metric, the correction factors and the enforcement. Operators should expect the detail to move. What is unlikely to move is the direction: an annual, rated, tightening measure of operational intensity is now part of how ships are run.

Why your rating is only as good as your data

Every number above starts in the same place: the fuel you report you burned and the distance you report you sailed. The attained CII is built from your operational data, the same noon reports and bunker figures that feed your Data Collection System submission.

If that data is inconsistent, an implausible consumption figure here, a distance that does not reconcile there, the rating built on it is one you cannot defend when a verifier queries it, and one you cannot steer deliberately, because you cannot trust the baseline you are steering from. This is the quiet reason data quality sits underneath the whole emissions stack. A defensible CII is a validated CII, and validation is something that has to happen before the number is set, not after a verifier has questioned it.

Managing CII deliberately

Two things follow once the mechanics are clear. First, the rating is decided over a full year, which means it is managed across the year rather than reconstructed at the end of it; by the time an accurate year-end number arrives, the voyages that would have changed it are already sailed. Second, the lever that actually moves it is operational: speed, hull and propeller condition, and the avoidable fuel waste that a performance model catches within days rather than at the next dry dock.

CII is not going away, and it is going to tighten. The operators who treat it as a number to be managed, on data they can stand behind, are the ones who keep their tonnage trading freely while the line keeps falling.