The Company is required to comply with regulations prescribed by the International Maritime Organization (IMO) for its ships to trade in international waters.  The four pillars governing the international maritime industry are:

1. 1. Safety of Life at Sea (SOLAS)
   2. Maritime Regulations for Prevention of Pollution (MARPOL)
   3. Standards for Training Certification and Watchkeeping (STCW)
   4. Maritime Labour Convention (MLC)

IMO’s latest regulations on GHG emissions – the introduction of EEXI and CII

The IMO set a target to reduce the intensity of CO2 emissions by 40% per transport work by 2030 and 70% per transport work by 2050, compared to the levels in 2008.  As part of its effort to achieve these goals, the IMO introduced two interim measures in June 2021.

(a) The Energy Efficiency Design Index for Existing ships (EEXI)

The EEXI regulation stipulates upper limits on the GHG emission levels permitted based on the design parameters of ships such as maximum engine power, ship speed, the type of ship, and the cargo carrying capacity of ships. To comply with this regulation, nearly 80% of the global fleet will have to limit the maximum power developed by the main engines by between 20% and 50%.

(b) Carbon Intensity Indicator (CII)

CII measures the actual emission levels of each vessel and requires ships to reduce their carbon intensity each sequential year.  From 2019 until 2022 ships are required to reduce their carbon intensity by 1% each year and from 2023 to 2026, they are required to reduce their carbon intensity by 2% each year.