IMO Carbon Intensity Indicator (CII)
Every cargo, cruise, and passenger ship above 5,000 gross tonnes trading internationally is now scored on a single letter from A to E each year — a rating that follows the vessel through charter negotiations, financing terms, port incentives, and resale value long after the reporting year has closed.
The Carbon Intensity Indicator turned the operational carbon efficiency of a ship into a public, tightening, year-on-year grade — and the boundary between a passing C and a failing D moves further out of reach every year to 2030.
The IMO Carbon Intensity Indicator (CII) is a mandatory annual rating (A–E) of a ship’s operational CO₂ efficiency — grams of CO₂ per capacity-mile — under MARPOL Annex VI. It applies to ships of 5,000 GT and above, and the required intensity tightens each year to a 21.5% reduction by 2030 versus 2019.
Executive Summary
The Carbon Intensity Indicator (CII) is the operational leg of the IMO’s short-term greenhouse-gas measure for international shipping. Where the Energy Efficiency Existing Ship Index (EEXI) rates a ship’s design efficiency once, the CII rates how efficiently a ship is actually operated, every calendar year, and expresses the result as a letter grade from A (best) to E (worst). The measure entered into force through amendments to MARPOL Annex VI on 1 November 2022; ships began calculating and reporting from 1 January 2023, and the first ratings were assigned in 2024 on 2023 data.
A ship’s attained CII is its annual CO₂ emissions divided by its transport-work proxy — capacity multiplied by distance sailed — derived from fuel-consumption data already reported to the IMO Data Collection System (DCS). That attained value is compared against a required CII: a statistical reference line for the ship’s type and size, reduced by a fixed annual percentage (the “Z factor”) that steepens each year. In April 2025 the IMO adopted the reduction factors for 2027 through 2030, reaching a 21.5% reduction versus the 2019 reference line by 2030 — a level chosen to keep the scheme aligned with the 2023 IMO GHG Strategy’s ambition of cutting carbon intensity per transport work by at least 40% by 2030 relative to 2008.
CII compliance rests on five IMO guidelines, referred to as G1 through G5: G1 defines how the indicator is calculated; G2 sets the reference lines by ship type and size; G3 sets the annual reduction factors that convert a reference line into a required CII; G4 converts the gap between attained and required CII into an A–E rating; and G5 defines the correction factors and voyage adjustments that account for operations outside a ship’s control. Every number on this page traces to one of these guideline resolutions.
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What Is the CII?
The Carbon Intensity Indicator is a mandatory operational efficiency metric and rating scheme established under Regulation 28 of MARPOL Annex VI, the air-pollution annex of the International Convention for the Prevention of Pollution from Ships. It applies to ships of 5,000 gross tonnes and above engaged in international voyages — the same size threshold already used by the IMO Data Collection System — covering the great majority of shipping’s CO₂ emissions in a comparatively small number of vessels.
The CII does three things that no earlier IMO measure did together. First, it converts a ship’s reported fuel consumption into a single, comparable carbon-intensity figure expressed in grams of CO₂ per capacity-mile. Second, it benchmarks that figure against a statistically derived expectation for the ship’s type and size, so a small feeder and a large capesize bulker are judged against their own peer groups rather than against each other. Third, it publishes the result as an A-to-E rating that tightens annually, turning a one-off measurement into a moving compliance target that a ship must actively manage.
Crucially, the CII is an intensity measure, not an absolute-emissions cap. A ship that sails further, faster, or with more idle time can burn more fuel in absolute terms yet still improve its rating if its emissions per capacity-mile fall — and, conversely, a ship that reduces total voyages can worsen its rating. This distinction is the source of most of the misunderstanding, and most of the criticism, examined later on this page.
The CII is the operational component of the IMO’s short-term GHG measure package, alongside the design-based EEXI and the management-plan SEEMP. That package is distinct from the mid-term measures — the fuel-standard and pricing mechanism of the emerging IMO Net-Zero Framework — which are still being finalised. When commentary refers to “the IMO 2028 measures,” it means the mid-term Net-Zero Framework, not the CII.
Why the CII Exists
International shipping carries the overwhelming majority of world trade and, left unaddressed, its emissions were projected to grow substantially against a 2008 baseline. The 2018 Initial IMO GHG Strategy set a target of at least a 50% cut in total shipping GHG emissions by 2050. Analysis showed that ambition was not consistent with the temperature goals of the Paris Agreement, and in July 2023 the IMO adopted a revised strategy that raised the endpoint to net-zero emissions “by or around 2050.”
The 2023 IMO GHG Strategy also introduced indicative checkpoints: at least a 20% reduction in total annual GHG emissions by 2030 (striving for 30%) and at least a 70% reduction by 2040 (striving for 80%), both against 2008. Alongside these absolute checkpoints it retained a short-term operational-efficiency ambition: to reduce CO₂ emissions per transport work across the international fleet by at least 40% by 2030 compared with 2008. The CII is the instrument that translates that intensity ambition into an obligation on individual ships.
The measure exists because before it, no comparable, enforceable operational benchmark existed. Ships reported fuel consumption to the DCS, but that data was not converted into a peer-benchmarked efficiency grade with escalating stringency and a corrective-action trigger. The CII closes that gap, turning a passive reporting obligation into an active efficiency-management obligation.
Because the CII rating is calculated from DCS data and recorded in a ship’s documentation, it is visible to charterers, financiers, insurers, and port authorities. A weak rating is no longer a private engineering matter — it is a disclosed attribute of the asset that affects its earning capacity, and the intensity bar rises roughly two to three percentage points every year to 2030.
Governance and the G1–G5 Guideline Family
The CII is administered by the IMO through its Marine Environment Protection Committee (MEPC). The binding obligation lives in MARPOL Annex VI itself; the operational detail — how to calculate the indicator, which reference line applies, how ratings are assigned — lives in a family of MEPC resolutions known informally as the G1 through G5 guidelines. Reading the CII correctly means knowing which guideline governs which step.
| Guideline | Resolution | What it governs |
|---|---|---|
| G1 | MEPC.352(78) | Operational carbon intensity indicators and the methods for calculating them — defines the attained CII and the AER / cgDist forms. |
| G2 | MEPC.353(78) | The reference lines used with the CII — the statistical baselines by ship type and size against which a ship is benchmarked. |
| G3 | MEPC.338(76), amended by MEPC.400(83) | The annual reduction factors (Z%) applied to the reference line to derive the required CII. The 2025 amendment set the 2027–2030 factors. |
| G4 | MEPC.354(78) | The rating methodology — how the four rating boundaries are derived and the A–E grade assigned. |
| G5 | MEPC.355(78) | Interim correction factors and voyage adjustments — how to account for fuel used in operations outside a ship’s normal transport work. |
Two further resolutions define the underlying quantities the guidelines depend on. MEPC.336(76) established the attained-CII requirement in Annex VI, MEPC.337(76) established the required-CII framework and the ship-type definitions, and MEPC.339(76) covers the associated verification and documentation. The carbon-conversion factors (Cf) that turn a mass of each fuel into a mass of CO₂ are drawn from the fuel table in MEPC.364(79). Because these are historical instruments, every value cited from them on this page is hardcoded to the resolution that published it.
Substantive changes to the scheme are made only through the MEPC, following the IMO’s amendment procedures for MARPOL Annex VI. That governance route is why the 2027–2030 reduction factors — although widely anticipated from 2021 — could not take effect until they were formally adopted as MEPC.400(83) in April 2025.
How the CII Is Calculated: AER and cgDist
The attained CII is, at heart, a single ratio: the ship’s annual mass of CO₂ divided by its transport-work proxy over the same calendar year. Both quantities come from data the ship already reports to the IMO DCS, so the CII adds no new primary data-collection burden — it re-uses the fuel-consumption and distance figures already gathered.
The numerator — annual CO₂
The CO₂ mass is the sum, across every fuel the ship burned in the year, of the mass of that fuel multiplied by its carbon-conversion factor (Cf) from MEPC.364(79). Heavy fuel oil, marine gas oil, LNG, LPG, methanol, and other fuels each carry their own Cf; LNG carriers, for example, account for boil-off gas combustion through the LNG entries in that table. The CII is therefore a tank-to-wake CO₂ measure — it counts the carbon in the fuel actually combusted on board, not the upstream lifecycle emissions of producing that fuel.
The denominator — transport work
The transport-work proxy is capacity multiplied by distance sailed. Because the DCS does not collect actual cargo carried, the CII cannot use a true cargo-tonne-mile figure; it substitutes the ship’s capacity. Two capacity forms are in use, and which one applies depends on ship type:
| Form | Capacity basis | Unit | Applies to |
|---|---|---|---|
| AER (Annual Efficiency Ratio) | Deadweight tonnage (DWT) | g CO₂ / (dwt · nm) | Weight-critical cargo ships — bulk carriers, tankers, gas carriers, LNG carriers, container ships, general cargo, refrigerated cargo, combination carriers |
| cgDist (capacity gross-tonnage distance) | Gross tonnage (GT) | g CO₂ / (GT · nm) | Volume-critical and passenger ships — cruise ships, ro-ro cargo, ro-pax, vehicle carriers |
A third, cargo-based form — the Energy Efficiency Operational Indicator (EEOI), measured per tonne-mile — is theoretically more accurate because it reflects actual cargo, but it cannot currently be used for CII because the DCS does not collect the cargo data it requires. This is a recognised limitation and a central theme of the ongoing review.
Because the denominator uses maximum capacity rather than cargo actually carried, a ship earns no CII credit for loading more efficiently and no penalty for sailing in ballast. Triangulation, backhaul optimisation, and high load factors — all genuine efficiency gains — are invisible to the AER. The only levers that move the AER are burning less fuel or sailing more distance per tonne of fuel.
The Reference Line (G2)
An attained CII means nothing in isolation; it acquires meaning only against a reference line. The reference line, set in guideline G2 (MEPC.353(78)), is a statistical curve fitted to the 2019 fleet: for each ship type it describes the median carbon intensity expected of a ship as a function of its size. It takes the form of a power curve:
Reference CII = a × Capacity−c
where Capacity is deadweight (AER ship types) or gross tonnage (cgDist ship types), and a and c are positive parameters published per ship type and, for several types, per size band. Larger ships have a lower reference intensity, reflecting the economies of scale of moving more cargo per tonne of fuel — which is why the exponent is negative.
The 2019 anchor year matters. The whole scheme measures reduction relative to the 2019 fleet, not to any individual ship’s own history. A ship that was already highly efficient in 2019 is held to the same tightening reference as a ship that was inefficient, so early movers do not get a permanent head-start credit — they must keep improving in line with the annual reduction factors like everyone else.
Because the parameters a and c are ship-type specific and, in several categories, size-band specific, the reference line is not a single curve but a family of curves. The values published in MEPC.353(78) are the authoritative source; consultants and class societies reproduce them, but the resolution is definitive, and they are hardcoded values, not live figures.
Required CII and the Reduction Factors (G3)
The reference line describes the 2019 baseline. The required CII — the intensity a ship must actually achieve in a given year to sit on the C/D boundary — is the reference line reduced by that year’s reduction factor:
Required CIIyear = (1 − Zyear / 100) × Reference CII
Z is the annual reduction factor in per cent, set in guideline G3 (MEPC.338(76), as amended by MEPC.400(83)). As Z rises, the required CII falls, and a ship must run cleaner each year simply to hold its rating.
The reduction factors were originally fixed only through 2026; the values for 2027 to 2030 were deliberately left open, to be strengthened after the review of the short-term measure. Those later values were adopted in April 2025 as MEPC.400(83). The complete schedule relative to the 2019 reference line now reads:
| Year | Reduction factor Z (relative to 2019) | Source |
|---|---|---|
| 2023 | 5% | MEPC.338(76) |
| 2024 | 7% | MEPC.338(76) |
| 2025 | 9% | MEPC.338(76) |
| 2026 | 11% | MEPC.338(76) |
| 2027 | 13.625% | MEPC.400(83) |
| 2028 | 16.250% | MEPC.400(83) |
| 2029 | 18.875% | MEPC.400(83) |
| 2030 | 21.500% | MEPC.400(83) |
The step change at 2027 is deliberate. Through 2026 the factor rose in two-percentage-point increments; from 2027 the annual increment increases to 2.625 percentage points, so that by 2030 the required intensity is 21.5% below the 2019 line. That endpoint was chosen as the minimum consistent with the 2023 GHG Strategy’s ambition of at least a 40% cut in CO₂ per transport work by 2030 versus 2008 — the gap between the 2008 and 2019 baselines absorbs the remainder.
The trajectory below shows how the required intensity tightens across the decade. The steeper slope from 2027 is where a ship comfortably rated C on 2026 data can slip to D on identical operations.
| Point | % reduction |
|---|---|
| 2023 | 5.00 % reduction |
| 2024 | 7.00 % reduction |
| 2025 | 9.00 % reduction |
| 2026 | 11.0 % reduction |
| 2027 | 13.6 % reduction |
| 2028 | 16.3 % reduction |
| 2029 | 18.9 % reduction |
| 2030 | 21.5 % reduction |
The A–E Rating Mechanism (G4)
The required CII fixes the single point where a ship sits exactly on the boundary between a C and a D. The rating guideline G4 (MEPC.354(78)) turns that one point into five bands by placing four boundaries around it. Below the required CII a ship is superior; above it, inferior.
The dd-vectors
The four boundaries are set using a set of multipliers called dd-vectors, derived by G4 from quantile regressions of the 2019 fleet distribution for each ship type. The four boundary multipliers — often written d1, d2, d3, d4 — are applied to the required CII to produce the superior, lower, upper, and inferior boundaries. Because they come from the fleet distribution, the band widths differ by ship type: a category with a wide spread of 2019 performance has wider bands than a tightly clustered one.
| Rating | Meaning | Position relative to required CII |
|---|---|---|
| A | Major superior | At or below the superior boundary (d1 × required CII) |
| B | Minor superior | Between the superior and lower boundaries |
| C | Moderate — the compliance target | Straddles the required CII, between the lower and upper boundaries |
| D | Minor inferior | Between the upper and inferior boundaries |
| E | Major inferior | At or above the inferior boundary (d4 × required CII) |
A lower attained CII is better, so a ship earns an A by achieving an intensity comfortably below its required CII, and an E by exceeding it substantially. Because the required CII falls every year while the dd-vector multipliers stay fixed, the entire band structure shifts downward annually — the same attained intensity that earned a C in one year can earn a D two years later.
Worked example — required CII to rating
The G4 explanatory guidance uses a bulk carrier with a required CII of 10 g CO₂/(dwt·nm) in a given year to illustrate the mechanism. The four boundaries are obtained by multiplying that required value by the ship type’s dd-vectors, producing bands like the following (illustrative values, shown to demonstrate the method, not a compliance figure for any real ship):
| Boundary | Illustrative value g CO₂/(dwt·nm) | Attained CII falls here → rating |
|---|---|---|
| Superior (d1) | 8.5 | ≤ 8.5 → A |
| Lower (d2) | 9.4 | 8.5–9.4 → B |
| Required CII | 10.0 | 9.4–10.7 → C |
| Upper (d3) | 10.7 | 10.7–11.6 → D |
| Inferior (d4) | 11.6 | ≥ 11.6 → E |
A ship attaining, say, 9.9 g CO₂/(dwt·nm) rates C; the same ship attaining 10.8 rates D. The exact multipliers are the type-specific dd-vectors in MEPC.354(78) — the numbers above are placeholders to show the structure, not the real boundaries for any category.
The visual below shows the same five-band structure as a single axis, with lower intensity (better) at the left. It is the mental model to keep: the required CII is the C/D hinge, and everything tightens toward the left each year.
Correction Factors and Voyage Adjustments (G5)
A raw AER penalises fuel burned for purposes that are not transport work in the ordinary sense — cargo heating on a chemical tanker, dynamic positioning on a shuttle tanker, ice transit, or fuel used while a passenger ship provides hotel services in port. Guideline G5 (MEPC.355(78)), issued as interim guidance, allows defined correction factors and voyage adjustments to be applied so that a ship is not down-rated for fuel it had little operational choice about.
Correction factors adjust the CO₂ or the distance to remove the effect of specific, recognised operations. Voyage adjustments remove qualifying legs — for example certain voyages to and from a shipyard, or legs affected by defined circumstances — from the annual calculation. The categories are prescribed; a ship cannot invent its own adjustment, and each claimed adjustment must be supported by verifiable DCS-linked evidence.
The G5 guidance is explicitly interim. Which operations deserve correction, and how idle and port-waiting time should be treated, are among the most actively debated points in the Phase 2 review. Fuel consumed during port waiting and idle time is largely incidental and outside the shipowner’s control, yet under the current rules it still enters the CII calculation — a recognised distortion that the review is expected to address.
Ship Types and Applicability Thresholds
Two size thresholds bound the short-term measure, and they are frequently confused. The EEXI design-efficiency requirement applies to ships of 400 GT and above; the CII rating scheme and the DCS reporting it relies on apply to ships of 5,000 GT and above. So a 2,000 GT general cargo ship must meet EEXI but is not CII-rated, whereas a 20,000 GT bulk carrier faces both.
400 GT and above — attained EEXI must be calculated and meet the required value (design efficiency).
5,000 GT and above — annual CII must be calculated, reported to the DCS, and rated A–E (operational efficiency).
Within the 5,000 GT-and-above population, the CII applies to the cargo, ro-pax, and cruise ship types for which reference lines exist. The rating framework and reference lines cover the following ship types, each mapped to its capacity form:
| Ship type | CII form | Capacity basis |
|---|---|---|
| Bulk carrier | AER | Deadweight |
| Tanker | AER | Deadweight |
| Container ship | AER | Deadweight |
| Gas carrier | AER | Deadweight |
| LNG carrier | AER | Deadweight |
| General cargo ship | AER | Deadweight |
| Refrigerated cargo carrier | AER | Deadweight |
| Combination carrier | AER | Deadweight |
| Ro-ro cargo ship (vehicle carrier) | cgDist | Gross tonnage |
| Ro-ro cargo ship | cgDist | Gross tonnage |
| Ro-ro passenger ship (ro-pax) | cgDist | Gross tonnage |
| Cruise passenger ship (non-conventional propulsion) | cgDist | Gross tonnage |
The ship-type definitions and the precise size categories that carry distinct reference-line parameters are set in MEPC.337(76). A vessel that does not fall within a defined CII ship type — certain specialised or offshore units — may still report to the DCS without receiving a CII rating.
SEEMP Part III and Corrective Action Plans
The CII rating is not an end in itself; it is wired into the ship’s Ship Energy Efficiency Management Plan (SEEMP). Since 1 January 2023, ships subject to the CII must carry an enhanced SEEMP that includes Part III, the Ship Operational Carbon Intensity Plan. Part III documents the required annual CII for a three-year window and the implementation plan describing how the ship intends to achieve it.
Part III is auditable. Administrations, or recognised organisations acting on their behalf, verify it against the operational carbon-intensity guidelines and issue the associated documentation. Following the adoption of the revised 2027–2030 reduction factors, ships with an existing approved Part III were required to revise it to reflect the new, steeper trajectory — a concrete example of how a change to the G3 factors cascades into every affected ship’s management plan.
A ship rated E in a single year, or rated D for three consecutive years, must develop a plan of corrective actions as part of its SEEMP, setting out how it will reach the required index (C or above). That plan must be approved by the Administration or a recognised organisation. There is no direct financial penalty in the MARPOL text — the consequence is the mandatory corrective-action obligation, the documentary record, and the commercial and port-incentive effects that flow from a disclosed poor rating.
The scheme also encourages positive incentives at the other end of the scale: administrations, port authorities, and other stakeholders are invited to reward ships rated A or B, for example through port-due discounts or preferential berthing. This incentive layer is discretionary and varies by jurisdiction.
The Annual Compliance Cycle
The CII runs on an annual, backward-looking cycle tied to the calendar year and the DCS reporting timetable. Each rating is calculated from the previous year’s aggregated voyages and then governs the year ahead.
- Collect data through the reporting year. Record fuel consumption by fuel type, distance sailed, and hours under way across every voyage, as required for the IMO DCS.
- Report to the DCS. Submit the aggregated annual fuel-consumption and distance data to the flag Administration or recognised organisation after year-end.
- Verify and calculate the attained CII. The verifier confirms the DCS data and computes the attained CII (AER or cgDist) for the completed year, applying any G5 correction factors and voyage adjustments claimed.
- Determine the required CII and rating. Apply that year’s reduction factor (G3) to the reference line (G2) to obtain the required CII, then apply the dd-vectors (G4) to assign the A–E rating.
- Record in the Statement of Compliance and SEEMP. The rating is documented; the SEEMP Part III implementation plan is checked against the forward trajectory.
- Trigger corrective action if required. A single E, or a third consecutive D, obliges the ship to add an approved corrective-action plan to its SEEMP.
Because the rating is assigned after the year closes, there is no mid-year recovery once emissions are burned. Effective CII management is prospective: speed optimisation, hull and propeller cleaning, weather routing, and voyage planning applied continuously through the live reporting year, informed by a running estimate of the attained CII rather than a year-end surprise.
EEXI versus CII
The EEXI and the CII are complementary halves of the short-term measure, and confusing them is the single most common conceptual error. The EEXI is a one-time, design-based index; the CII is an annual, operations-based rating. A ship can hold a compliant EEXI and still earn a poor CII if it is operated inefficiently, because the two measure different things.
| Attribute | EEXI | CII |
|---|---|---|
| What it measures | Design / technical efficiency of the ship as built or retrofitted | Operational carbon intensity in actual service |
| Frequency | One-time attained value (re-assessed on major modification) | Recalculated and re-rated every calendar year |
| Output | Pass / fail against a required index | A–E rating on a tightening scale |
| Size threshold | 400 GT and above | 5,000 GT and above |
| Primary lever | Engine power limitation, efficiency devices, hull design | Speed, routing, hull condition, fuel choice, voyage planning |
| Guideline basis | EEDI/EEXI calculation and survey guidelines | G1–G5 (MEPC.352–355(78), MEPC.338(76)/MEPC.400(83)) |
The practical relationship is that EEXI sets a design floor and CII drives continuous operational improvement above it. Meeting EEXI once does not discharge the CII obligation; the CII must be managed for the life of the ship, against a bar that keeps rising.
Interaction with the IMO Net-Zero Framework
The CII belongs to the IMO’s short-term measure. The mid-term measures — a technical goal-based marine fuel standard and an economic pricing mechanism — are being developed as the IMO Net-Zero Framework, which implements the 2023 GHG Strategy’s net-zero-by-around-2050 ambition. The Net-Zero Framework was approved in principle at MEPC 83 in April 2025, with formal adoption targeted for a later 2026 session and a first reporting year anticipated toward the end of the decade.
The two are conceptually different. The CII measures tank-to-wake operational CO₂ intensity per capacity-mile and grades it A–E. The Net-Zero Framework’s technical element is a declining GHG fuel intensity standard measured on a well-to-wake, lifecycle basis, backed by a remedial-unit pricing mechanism. One rewards operational efficiency; the other targets the carbon content of the energy itself.
Part of the Phase 2 review of the short-term measure is explicitly about ensuring synergy between the CII/energy-efficiency framework and the Net-Zero Framework, so that ships are not subject to contradictory operational and fuel-intensity signals. Until the mid-term measures enter into force, the CII remains the operative operational-intensity obligation, and it is expected to continue alongside the Net-Zero Framework rather than be replaced by it in the near term.
Interaction with EU ETS Maritime and FuelEU Maritime
A ship calling at European ports faces the CII plus two distinct EU instruments. The three regimes overlap in coverage but differ in mechanism, metric, and legal basis, and they apply simultaneously — a ship must comply with all three where each is in scope. Treating any one as a proxy for the others is a compliance error.
| Regime | Mechanism | Metric | Nature |
|---|---|---|---|
| IMO CII | Annual A–E efficiency rating with corrective-action trigger | Tank-to-wake CO₂ per capacity-mile | Global (IMO), operational-efficiency obligation |
| EU ETS (maritime) | Surrender of allowances for verified emissions; a carbon price | Absolute CO₂ (and, phasing in, CH₄ and N₂O) | EU market-based measure; phased 40% of emissions in 2024, 70% in 2025, 100% in 2026 for intra-EU voyages, 50% for extra-EU legs |
| FuelEU Maritime | Declining limit on the GHG intensity of energy used, with penalties for exceedance | Well-to-wake GHG intensity of fuel | EU fuel-standard; 2% reduction from the 2020 reference in 2025, escalating toward 80% by 2050 |
The relationship to note is that CII and FuelEU point in the same direction but measure different quantities: CII rewards burning less fuel per capacity-mile on a tank-to-wake basis, while FuelEU rewards using lower-carbon fuels on a well-to-wake basis. A ship can improve one without improving the other — switching to a cleaner but not necessarily less-consumed fuel helps FuelEU more than CII, whereas slow steaming helps CII directly. The EU ETS adds an absolute carbon-price signal on top of both. The EU has stated an intention to align its well-to-wake methodology with the IMO’s lifecycle guidelines to limit fragmentation, but the instruments remain legally separate with their own reporting and compliance paths.
For the value-chain accounting that a shipper or freight buyer performs, these vessel-level regimes sit upstream of corporate reporting. The emissions a company reports for purchased sea freight are calculated under logistics-emissions methodologies such as the GLEC Framework and ISO 14083, not under the CII — the CII grades the ship, while GLEC and ISO 14083 allocate the ship’s emissions to the cargo. The EU Emissions Trading System reference page covers the maritime scope of the ETS in detail.
The Phase 2 Review: What Is Under Revision
MARPOL Annex VI required the effectiveness of the CII and EEXI requirements to be reviewed by 1 January 2026. That review was structured in two phases. Phase 1, finalised in 2025, gathered and analysed member-state implementation experience and settled the urgent item — the 2027–2030 reduction factors adopted as MEPC.400(83). Phase 2 runs from spring 2026 to spring 2028 and addresses the deeper structural questions the measure raised in practice.
The Phase 2 agenda, approved at MEPC 83, covers enhancement of the SEEMP framework, further development of the CII metrics themselves, and alignment between the short-term efficiency framework and the emerging Net-Zero Framework. The specific weaknesses under examination include:
- Idle and port-waiting time. Fuel burned while a ship waits at anchor or idles is largely outside the operator’s control yet currently counts against the CII, distorting ratings for ships in congested trades.
- Capacity versus actual cargo. The AER’s use of deadweight rather than cargo carried means genuine load-factor efficiency is invisible; options being weighed include cargo-based or partly cargo-based metrics.
- Well-to-wake versus tank-to-wake. The current tank-to-wake basis ignores upstream fuel emissions, which matters as alternative fuels scale; alignment with lifecycle accounting is under discussion.
- Correction factors and voyage adjustments. The interim G5 framework is being reviewed for scope and consistency, including treatment of pilot fuel and specialised operations.
- Reference lines and reduction rates. The reference lines, the metric, and the reduction trajectory beyond the currently fixed factors are all within Phase 2’s remit, taking account of correction-factor effects and the mid-term measures.
Any guide or consultancy deck that describes the CII without reflecting the MEPC.400(83) 2027–2030 reduction factors or the Phase 2 review scope is out of date. The reduction factors changed materially in April 2025, and the metric itself is under active revision through 2028 — several design features described as settled a few years ago are now explicitly open questions.
Commercial and Chartering Implications
The CII crossed a threshold in practice: it is no longer only a compliance metric but a commercial performance attribute that affects earnings, charter attractiveness, financing terms, and asset value. Because a large share of the trading fleet risks D or E ratings under the tightening trajectory without operational change, the rating has migrated into contracts and valuations.
Charter-party CII clauses
Time-charter arrangements increasingly allocate CII responsibility explicitly. The tension is structural: the owner holds the rating, but the charterer controls speed and voyage selection. CII clauses (such as the BIMCO CII operations clause) set data-sharing, cooperation, and sometimes performance obligations to divide that control.
Speed and the owner–charterer split
A charterer instructing higher speed to hit a laycan can worsen the owner’s annual rating. Because the AER responds directly to speed through fuel burn, the commercial negotiation over voyage speed is now also a negotiation over the year-end rating.
Financing and asset value
Lenders subscribing to the Poseidon Principles assess portfolio alignment with IMO trajectories, and a persistently poor CII rating can affect financing terms and a vessel’s resale value, shortening the economic life of inefficient tonnage.
The levers available to improve a rating are limited by the arithmetic: reduce the numerator by burning less fuel, or increase the denominator by covering more distance per unit of fuel. In practice that means speed optimisation and slow steaming, hull and propeller maintenance, weather routing, energy-saving devices, shore power in port where available, and — where feasible — lower-carbon fuels. Each measure targets one or both sides of the ratio.
Common Misinterpretations
CII measures intensity — CO₂ per capacity-mile — not total emissions. A ship can increase absolute CO₂ and still improve its rating, or cut absolute CO₂ and worsen it. Confusing the two leads to the wrong operational decisions.
EEXI is a design index checked once; CII is an operational rating recalculated yearly. A technically efficient ship operated poorly can still rate D or E. The two obligations are separate and both must be managed.
C is the compliance band, but the required CII inside it falls every year. A ship comfortably rated C on one year’s data can drop to D on the next year’s tighter bar with no change in operation — especially across the steeper 2027 step.
Because the denominator is capacity, not cargo carried, higher load factors and backhaul optimisation do not improve the AER. This is a known limitation, not a loophole to exploit — and it is under review in Phase 2.
CII counts only the CO₂ from fuel combusted on board. It says nothing about the upstream emissions of producing the fuel. A fuel that looks clean at the funnel may not be clean well-to-wake — that is what FuelEU Maritime and the IMO Net-Zero Framework’s fuel standard address, not the CII.
An E or a third consecutive D triggers a mandatory corrective-action plan, not a statutory financial penalty under Annex VI. The real cost is commercial: charter, financing, port-incentive, and asset-value effects flowing from a disclosed poor rating.
Common Calculation and Reporting Errors
- Using the wrong CII form for the ship type. Applying AER (deadweight) to a ro-pax or cruise ship that should use cgDist (gross tonnage), or vice versa, produces a meaningless intensity and an incorrect rating.
- Applying the wrong year’s reduction factor. Carrying a prior year’s Z factor into the required-CII calculation — easy to do across the 2026-to-2027 step where the increment changes from 2 to 2.625 percentage points.
- Mismatching Cf fuel factors. Using an incorrect or outdated carbon-conversion factor from the MEPC.364(79) fuel table, or mislabelling a fuel (for example treating an LNG boil-off stream as a distillate), distorts the numerator.
- Claiming unsupported G5 corrections. Applying a correction factor or voyage adjustment that does not fall within the prescribed G5 categories, or without verifiable DCS-linked evidence, is rejected at verification.
- Reconciling to the wrong baseline. Treating the reduction factor as relative to 2008 (the Strategy baseline) rather than to the 2019 reference line (the CII baseline). The 40%-by-2030 fleet ambition is versus 2008; the ship-level Z factors are versus 2019.
- Ignoring the reference-line size band. Using the wrong a and c parameters where a ship type has multiple size categories in MEPC.337(76)/MEPC.353(78) yields a wrong required CII.
- Confusing DCS reporting completeness with CII compliance. Reporting fuel data to the DCS is necessary but not sufficient — the rating and the SEEMP Part III obligations are separate downstream steps.
Criticisms and Limitations
The CII is the first global operational-efficiency rating of its kind, and it is not beyond legitimate criticism. A complete reference addresses the objections directly.
The capacity-not-cargo distortion
Because the AER uses deadweight rather than cargo carried, the metric does not measure transport efficiency in the economically meaningful sense. A ship can improve its rating by sailing longer distances, and cannot improve it by loading more cargo per voyage. Independent analysis has argued that the current metric is insufficient to capture emissions accurately and to incentivise real reduction — a criticism now formally on the Phase 2 agenda.
Perverse incentives on distance and idle time
Since more distance improves the AER, the metric can, at the margin, reward sailing further rather than less. And because idle and port-waiting fuel counts, ships in congested trades can be down-rated for delays outside their control. Both effects are acknowledged distortions under review.
Tank-to-wake blind spot
By counting only on-board combustion, the CII ignores the upstream carbon of the fuel. As alternative fuels scale, a tank-to-wake metric can flatter fuels that are clean at the funnel but carbon-intensive to produce — which is precisely why the EU and the IMO’s mid-term measures moved to well-to-wake accounting.
Owner–charterer accountability gap
The rating attaches to the ship and its owner, but speed and voyage selection are frequently controlled by the charterer. The measure does not itself resolve who is accountable for a poor rating, leaving that to contract, which has produced friction and a proliferation of CII clauses.
Statistical and cliff-edge effects
Because bands are derived from a fixed 2019 distribution while the required CII falls annually, ratings can shift without any operational change, and a ship near a boundary can flip between C and D on marginal differences. Critics argue this produces noise rather than signal for vessels close to a band edge.
The criticisms are real, but they describe a first-generation instrument doing its core job: making operational carbon intensity visible, comparable, and tightening. The distortions are the agenda for the Phase 2 revision, not evidence that the scheme has failed — and in the interim the CII remains the only global operational rating that charterers, financiers, and ports can act on.
Future Evolution
Three trajectories will shape the CII through the end of the decade.
The Phase 2 revision (2026–2028). The metric, reference lines, correction factors, and the treatment of idle time and actual cargo are all under formal review, with outcomes expected to feed amendments in the 2027–2028 window. Options on the table range from excluding port emissions and adjusting for time at port to allowing for actual cargo and moving toward well-to-wake accounting.
Convergence with the Net-Zero Framework. As the mid-term fuel standard and pricing mechanism are finalised and enter into force toward the end of the decade, the short-term efficiency framework and the fuel-intensity framework must be reconciled so ships face a coherent signal. Phase 2 explicitly targets that synergy.
Deeper commercial integration. Independent of the regulatory revision, the CII is being embedded ever more firmly in charter parties, financing frameworks, and port-incentive schemes. Even where the regulatory design changes, the market infrastructure built around the A–E rating is likely to persist and to keep the rating commercially consequential.
Frequently Asked Questions
It is a mandatory annual grade, from A to E, of how efficiently a ship carries cargo relative to the CO₂ it emits. It applies to ships of 5,000 gross tonnes and above under MARPOL Annex VI. A ship’s actual carbon intensity — grams of CO₂ per capacity-mile — is compared against a required value for its type and size, and the required value tightens every year to a 21.5% reduction by 2030 versus the 2019 baseline.
Cargo, ro-pax, and cruise ships of 5,000 GT and above on international voyages — the same population that already reports to the IMO Data Collection System. The related EEXI design-efficiency requirement applies from a lower threshold of 400 GT, so smaller ships can face EEXI without being CII-rated.
The attained CII is annual CO₂ divided by transport work. CO₂ is each fuel’s mass burned multiplied by its carbon factor (Cf) from MEPC.364(79). Transport work is capacity times distance sailed: deadweight for weight-critical cargo ships (the AER form) or gross tonnage for passenger and volume-critical ships (the cgDist form). The result is grams of CO₂ per capacity-mile.
Adopted as MEPC.400(83) in April 2025, the reduction factors relative to the 2019 reference line are 13.625% for 2027, 16.25% for 2028, 18.875% for 2029, and 21.5% for 2030. These replaced the placeholders left open in the original 2021 guidelines and steepen the annual increment from 2 to 2.625 percentage points from 2027 onward.
A single E rating, or a D for three consecutive years, requires the ship to develop a plan of corrective actions within its SEEMP showing how it will reach a C or above, approved by the Administration or a recognised organisation. MARPOL Annex VI does not impose a direct financial penalty; the real consequences are the corrective-action obligation and the commercial effects on chartering, financing, port incentives, and asset value.
The EEXI rates a ship’s design efficiency once, on a pass/fail basis, from 400 GT. The CII rates operational efficiency every year, as an A–E grade, from 5,000 GT. A ship can pass EEXI and still earn a poor CII if it is operated inefficiently — the two measure different things and both must be managed.
No. The CII is a tank-to-wake measure — it counts only the CO₂ from fuel combusted on board, not the upstream well-to-tank emissions of producing the fuel. Well-to-wake, lifecycle accounting is used instead by FuelEU Maritime and by the IMO Net-Zero Framework’s fuel-intensity standard. Aligning the CII with lifecycle accounting is one item under the Phase 2 review.
They are three separate, simultaneously applicable regimes. The CII is a global IMO operational-efficiency rating; the EU ETS puts a carbon price on absolute maritime emissions, phasing to full coverage for intra-EU voyages by 2026; and FuelEU Maritime sets a declining limit on the well-to-wake GHG intensity of the energy a ship uses. Complying with one does not discharge the others, and a ship calling at EU ports must satisfy all three where in scope.
Yes. Phase 1 of the review, finalised in 2025, set the 2027–2030 reduction factors. Phase 2, running from spring 2026 to spring 2028, is reviewing the metric itself — including the treatment of idle and port time, the use of capacity rather than actual cargo, correction factors, and possible alignment with well-to-wake accounting — as well as synergy with the IMO Net-Zero Framework. The reduction factors are fixed; the metric’s design is genuinely open.
The rating attaches to the ship and its owner, but speed and voyage selection — the biggest operational levers on the AER — are often controlled by the charterer under a time charter. MARPOL does not resolve this split, so responsibility is allocated by contract, typically through a CII clause governing data sharing, cooperation, and sometimes performance. This owner–charterer gap is one of the scheme’s most-cited practical weaknesses.
Sources and References
Every numerical and methodological claim on this page reconciles to the primary IMO instruments below. Where the IMO has published a definitive resolution on a point, that resolution is cited directly; secondary commentary is used only for interpretation, and all values are hardcoded to their dated source.
Primary IMO instruments
- IMO, MARPOL Annex VI (International Convention for the Prevention of Pollution from Ships, Annex VI), Regulations 27 and 28 — DCS reporting and operational carbon intensity. Amendments in force 1 November 2022.
- Resolution MEPC.336(76) — Amendments to MARPOL Annex VI establishing the attained operational CII requirement.
- Resolution MEPC.337(76) — Required-CII framework and ship-type definitions and size categories.
- Resolution MEPC.338(76) — 2021 Guidelines on the operational carbon intensity reduction factors relative to reference lines (CII Reduction Factors Guidelines, G3).
- Resolution MEPC.339(76) — Associated verification and documentation requirements.
- Resolution MEPC.352(78) — 2022 Guidelines on operational carbon intensity indicators and calculation methods (CII Guidelines, G1).
- Resolution MEPC.353(78) — 2022 Guidelines on reference lines for use with operational CIIs (CII Reference Lines Guidelines, G2).
- Resolution MEPC.354(78) — 2022 Guidelines on the operational carbon intensity rating of ships (CII Rating Guidelines, G4).
- Resolution MEPC.355(78) — 2022 Interim Guidelines on correction factors and voyage adjustments for CII calculations (CII Guidelines, G5).
- Resolution MEPC.364(79) — Fuel carbon-conversion factors (Cf) table used in the CO₂ calculation.
- Resolution MEPC.400(83) (adopted 11 April 2025) — Amendments to the 2021 Guidelines (G3), setting the reduction factors for 2027–2030 at 13.625%, 16.25%, 18.875%, and 21.5%.
- Resolution MEPC.347(78) — Guidelines for the verification and company audits by the Administration of SEEMP Part III.
Strategy and review context
- IMO, 2023 IMO Strategy on Reduction of GHG Emissions from Ships (Resolution MEPC.377(80)) — net-zero by or around 2050; 2030 (20%, striving 30%) and 2040 (70%, striving 80%) checkpoints; at least 40% CO₂ per transport work by 2030 versus 2008.
- IMO MEPC 83 (April 2025) — completion of Phase 1 of the short-term measure review; approval of the Phase 2 work plan (spring 2026 to spring 2028); adoption of MEPC.400(83).
- IMO, EEXI and CII FAQ and Short-term GHG reduction measure — official summaries of applicability thresholds, ratings, and the review timetable.
Interacting regimes
- EU Emissions Trading System (maritime scope) — phased allowance surrender for verified maritime emissions.
- FuelEU Maritime Regulation — well-to-wake GHG-intensity limits on energy used on board, escalating from 2025.
- IMO Net-Zero Framework — the mid-term goal-based marine fuel standard and pricing mechanism, approved in principle at MEPC 83.
Related GreenCalculus reference pages
- GLEC Framework — logistics emissions
- ISO 14083 — transport chain emissions
- EU Emissions Trading System
- CORSIA — aviation carbon offsetting
- GLEC Framework — sea-freight methodology
- Scope 3 Category 4 — sea-freight calculator
- Scope 1 — marine and aviation fuel (own operations) calculator
Editorial scope and methodology
Editorial scope. This page documents the IMO Carbon Intensity Indicator as it stands on the date in the header above. The measure is under active review through 2028; primary IMO resolutions should be consulted for any time-sensitive application. GreenCalculus is independent of the IMO and provides this reference for informational and educational purposes.
Methodology. Every numerical value is hardcoded against its dated primary MEPC resolution. No live-reference shortcodes are used on this page — the standard at any given date is a historical record. When the IMO amends the measure, this page is reviewed and revised through the GreenCalculus changelog process at /changelog/.