RightShip's GHG Rating 2.0
Revolutionized GHG Rating 2.0: Aligning Maritime Efficiency with Emerging Environmental and Regulatory Shifts
What is the GHG 2.0 Rating about?
RightShip updates the methodology and design of its GHG Rating to reflect the maritime industry’s changing environmental, regulatory, and commercial landscape. The key changes are the incorporation of Energy Efficiency Existing Ship Index (EEXI) values, the adoption of a speed-based definition, and a shift to a 5-point rating scale (A-E).
Why we’re updating the Rating
The environmental and regulatory landscape has changed since 2012. The effects of climate change are increasingly visible, commercial pressures are shifting, and new legislation from the IMO and other major regulatory bodies is being introduced that aims to reduce or eliminate carbon emissions in shipping.
For the GHG Rating, the most significant of these regulatory changes is the introduction of the IMO’s Energy Efficiency Existing Ship Index (EEXI) in 2023. We are updating RightShip’s GHG Rating to incorporate EEXI values alongside RightShip’s Existing Vessel Design Index (EVDI) and the IMO’s Energy Efficiency Design Index (EEDI) measures. These changes will maintain a level playing field to compare vessels while rewarding innovative and proactive shipowners and managers.
How the GHG 2.0 works
GHG 2.0 rates a vessel’s designed efficiency against peer vessels of similar size and type. The Rating is dynamic: as older vessels are scrapped, new vessels are commissioned, or existing retrofits/upgrades are verified, the relative performance of the peer group improves, and vessels will be rated against a new average.
Vessels can have their Ratings upgraded by enhancing design factors which have a measurable impact on efficiency, primarily through the addition of energy-saving devices (ESD). The addition of an ESD will require evidence to be submitted to RightShip. You can read more in our FAQs in our GHG Rating Change report.
The major changes:
Engine power versus speed corrected.
GHG 2.0 is the industry’s first rating to incorporate EEXI, EVDI, and EEDI, and this change has necessitated a shift in how we define a vessel’s theoretical CO2 emissions.
GHG Rating 1.0 rated a vessel based on engine power, using characteristics of the ship at build, like capacity, engine power, and fuel consumption. This is a strong methodology, but it doesn’t allow for the efficiency variables introduced by engine power limitation (EPL), which is expected to be adopted on a large proportion of the world fleet to comply with EEXI.
GHG 2.0 addresses this issue by moving to a speed corrected methodology. This approach evaluates all vessels within a peer group at a common speed and focuses on the emissions in the range of a vessel’s market operating speeds, applying a speed cap for calculating the speed corrected intensity.
In other words: previous GHG Rating graded vessels according to their efficiency at 75% of the engine power. GHG 2.0 grades vessels according to the efficiency at a common speed.
This change ensures that the GHG Rating remains fair and transparent when considering EEXI and continues to function as an effective relative measure of efficiency between similar vessels.
Moving to a 5-point scale
The other major change in the Rating’s methodology is the move from an A-G scale to an A-E scale. This is primarily due to the IMO’s adoption of an A-E scale for the Carbon Intensity Indicator (CII) rating. CII and GHG are fundamentally different – CII measures how a vessel actually performed in the past, while GHG Rating measures the designed potential to perform. A vessel’s CII does not impact its GHG Rating. However, we believe it’s important to give stakeholders the chance to understand these two ratings in relation to each other.
For example: A vessel rated ‘A’ GHG gets chartered out for one year. It is returned to the vessel owner after one year, but it is CII rated ‘C’ due to the way it was traded. This CII rating, which may impact the vessel’s commercial viability, does not reflect the vessel’s potential or future performance. That’s what makes RightShip’s GHG Rating so important: it ensures that vessels are treated fairly, on a level playing field, and are measured according to their potential, not their past performance.
What happens next?
GHG 2.0 will be implemented on December 6th 2023. All new vessel submissions will be rated against the new methodology.
All affected shipowners and managers will be contacted by RightShip to go through the changes.
There will be a 12-month transition period after the GHG 2.0 announcement. During this period, a vessel’s rating under GHG 2.0 will become its primary rating on the RightShip Platform. However, the vessel’s rating under the GHG 1.0 will still be visible on RightSTORE, and a report based on that rating will be made available to the market for 12 months after the launch of the GHG 2.0 on September 13th 2022.
When will RightShip’s new GHG Rating methodology be implemented?
RightShip’s GHG 2.0 methodology will be implemented on the 6th of December 2023. An impact analysis will be made available for all stakeholders on 13th September 2023.
How will the change to a 5-point scale affect my vessel?
Broadly speaking, current As and Bs will become the new As. Current Fs and Gs will become the new Es. All ratings in between will move one scale up.
When we apply the new methodology, this will result in ratings adjustments. Access the GHG Rating Change report to see your new rating.
Currently, RightShip does not accept EPL below MPP Level 1. Will this limitation be removed in the new methodology?
Yes. Class certified EEDI and EEXI Technical files will be accepted when the new methodology is implemented. The current system will still not accept EPL below minimum propulsion power, so it is important that EEXI data be submitted to RightShip.
How do RightShip’s customers decide what is an acceptable GHG rating under the new methodology?
RightShip will be engaging all customers on this development. The new rating system will be an A-E scale, “E” being the lowest. Customers may freely choose the rating threshold to suit their policies. RightShip does not prescribe or recommend any such guideline.
What is RightShip’s position on the Power Limitation (EPL/ShaPoli) for the EEXI Compliance, and how will this affect vessels’ GHG Rating?
The new methodology will accept multiple EPL/ShaPoLi, and below MPP Level 1. The use of Admiralty principle in the new speed corrected approach will remove the influence of EPL/ShaPoLi on a vessel’s rating.
Access our GHG Rating Change report on RightSTORE.