Bahamas: accounting for use of biofuels in CII calculations

The Bahamas Maritime Authority (BMA) on 13 July 2023 issued a technical alert entitled "Interim guidance on accounting for the use of biofuels in Carbon Intensity Indicator calculations".

Purpose

1.1. The purpose of this Alert is to provide practical interim guidance on the incorporation of lower greenhouse gas (GHG) emission sustainable fuels (biofuels) in Carbon Intensity Indicator (CII) calculations.

1.2. This Alert is based on the decision by the 80th session of the Marine Environment Protection Committee (MEPC) of the International Maritime Organization (IMO). The decision outlines the methodology for accounting biofuel emissions in CII calculations, as indicated in MEPC circular MEPC.1/Circ.905 (attached as an Annex to this Alert).

1.3. The Bahamas Maritime Authority (BMA) will remain flexible in accommodating the evolving approach by the IMO to the use of alternative fuels in the marine industry. Further information will be provided as the ongoing MEPC Committee work on sustainable fuels Life Cycle Analysis (LCA) principles develops.

1.4. This Alert should be read in conjunction with:

i. Regulations 26, 27, and 28 of Annex VI of the International Convention for the Prevention of Pollution from Ships, 1973, as amended (MARPOL Annex VI)
ii. IMO Resolutions MEPC.346(78), MEPC.348(78), MEPC.352(78), and MEPC.355(78)
iii. IMO Circular MEPC.1/Circ.795/Rev.7
iv. BMA Marine Notices MN061 and MN063 and subsequent revisions.

Application

2.1. This Alert applies to all ships to which the provisions of Regulation 28 of MARPOL Annex VI apply.

2.2. The provisions of MEPC.1/Circ.905 apply from 01 October 2023.

2.3. The BMA encourages companies* considering early application of the provisions outlined in this Alert to apply to the BMA via the recognized organization that classes the ship.

*The Company is the entity responsible for the management of the ship in accordance with the ISM Code. For ships to which the ISM Code is not applicable, the Company is the Managing Owner in accordance with Section 52 of the Merchant Shipping Act.

2.4. If a certified biofuel is already being used onboard a ship in 2023, the BMA may permit the revision of the existing Ship Energy Efficiency Management Plan (SEEMP) Part III to account for the new lower CO2 Emission Conversion Factor (Cf) in the approved method of CII calculation.

2.5. Any amendments to SEEMP Part III shall be completed, verified, and reflected in the Confirmation of Compliance issued under the provisions of Regulation 5.4.6 of MARPOL Annex VI by 31 March 2024, to allow for timely submission of the CII for 2023.

BMA interpretation of provisions

3.1. The BMA offers the following interpretations of the provisions of MEPC.1/Circ. 905:

i. Only biofuels certified as sustainable on full well-to-wake GHG emissions by an international scheme may have a lower CO2 Emission Conversion Factor Cf based on their certification.
ii. Non-certified biofuels or those not meeting the full well-to-wake GHG emission criteria should not have a lower CO2 Emission Conversion Factor Cf. Instead, their GHG emissions should be accounted for as equivalent to fossil fuel for CII calculation.
iii. The BMA will not consider any biofuel as having a Cf factor below zero, regardless of its certification. If an Emission Conversion Factor is certified as below zero, the actual Cf taken for CII calculation shall be 0.
iv. Biofuels certified by an international scheme should have a sustainability certificate issued based on any existing or future certification scheme recognized by an international organization*.

*IMO, International Civil Aviation Organisation (ICAO) or similar.

v. Sustainability certification issued under the provisions of multinational regional competent authorities or individual State's national governmental agency may be accepted if a ship consuming such biofuel operates at all times within their respective jurisdiction(s) and the high seas. Applications for acceptance should be made to the BMA via the recognized organization that classes the ship.
vi. Biofuels achieving a certified well-to-wake GHG emission reduction of 65% or more compared to fossil MGO (95 gCO2e/MJ) can be accepted. Biofuels achieving a certified well-to-wake GHG emission reduction below 65% may be considered by the BMA if a ship operates at all times on such grades of biofuel. Applications for acceptance should be made to the BMA via the recognized organization that classes the ship.
vii. A Bunker Delivery Note (BDN) containing the mandatory information required by Regulation 18.5 of MARPOL Annex VI, along with a document confirming the biofuel properties as outlined in paragraphs i. to vi. above, should be provided to the ship at each biofuel bunkering by the supplier. Failure to provide the documents and/or an accompanying representative sample shall be treated similarly to fossil fuel supply as per Regulation 18.9 of MARPOL Annex VI.

- viii. A document confirming the supplied biofuel properties should be appended to the respective BDN and retained on board as required by Regulation 18.6 of MARPOL Annex VI.