The maritime industry contributes nearly 940 million tons of CO2 emissions annually which accounts for nearly 2.5% of the world's total CO2 emissions (Source: UK Research and Innovation)

But in less than 120 days from now, the IMO’s two new regulations - Energy Efficiency Existing Ship Index (EEXI) and Carbon Intensity Indicator (CII) - will apply to existing ships of 400 gt and above.

IMO’s intention is for these new regulations is to reduce the total greenhouse gas emissions from shipping operations by 50% by 2050 (against its 2008 emission levels) and carbon intensity of all ships by 40% by 2030.

The EEXI regulation is one of the most significant measures by the IMO to promote more environmentally friendly technologies and reduce the shipping industry’s carbon footprint. For CII, the annual rating ranging from A to E will be issued based on ratio of the total mass of CO2 emitted to the total transport work undertaken in each calendar year and if the rating is below ‘C’ corrective action must be taken immediately.

All of which raises interesting questions about the options available to ships of a certain age – let’s call them vintage assets. One engine manufacturer has warned that more than 80% of bulk carriers and container ships will be in the lowest C,D and E CII categories by 2030 if no action is taken, damaging their commercial viability.

Is scrapping the only commercially feasible option for vintage assets which fall foul of the new regulations? Taking a holistic approach, looking at the vessel’s full life cycle assessment, is there a case for extending the life of older vessels, rather than consigning them to the scrap heap?

If the purpose of EEXI and CII is to save the environment, phasing out vintage assets could be unintentionally counter-productive and lead to greater environmental damage.