Company: ASC
Filing Date: 2025-03-07
Form Type: 20-F
Source: 0001558370-25-002500
Chunk: 63

Company: Ardmore Shipping Corp
Filing Date: 2025-03-07
Form: 20-F
Item: Item 4
Chunk 63
---
) intensity of energy used aboard ships operating in these regions. This reduction applies to the vessel's entire energy lifecycle, encompassing "well-to-wake" emissions. This comprehensive approach includes emissions associated with fuel extraction, cultivation, production, transportation, and onboard usage. FEM sets the limits on the GHG intensity of energy used onboard ships without prescribing any particular fuel or technology. These limits are set in relation to a reference value, corresponding to the fleet average GHG intensity of energy used onboard ships in 2020, based on verified EU MRV data. 91.16 G CO2 eq/MJ is the reference value of GHG intensity of energy used, which is reduced based on the following criteria: 2% in 2025, 6% in 2030, 14.5% in 2035, 31% in 2040, 62% in 2045 and 80% in 2050.

Ships will be required to undertake a combination of initiatives in order to comply with the upcoming environmental regulations. These may range from switching to low/zero carbon alternative fuels, paying carbon taxes, retrofitting energy-saving devices, propulsion improvement devices as well as voyage optimization techniques. The emission control regulations could slow the speed of the vessels in the next few years. Consequently, this will lead to a reduction in the availability of ships and therefore, in the short- to medium-term, will benefit ship owners with younger fleets as charter rates should potentially increase.

Besides the IMO regulations, the decarbonization of shipping is being propelled by various state and non-state stakeholders of the shipping industry. In recent years, there have been several developments such as the Sea Cargo Charter, Poseidon Principles for ship finance banks and Poseidon Principles for Marine Insurance.

Table of Contents

In addition, there have been several industry-led initiatives to facilitate movement towards low/zero-carbon shipping such as Getting to Zero Coalition, The Castor Initiative for Ammonia, the Global Centre for Maritime Decarbonization, and the Mærsk Mc-Kinney Møller Center for Zero Carbon Shipping.

EEXI and CII

In June 2021, the IMO adopted amendments to the International Convention for the Prevention of Pollution from ships, that will require vessels to reduce their greenhouse gas emissions. These amendments are a combination of technical and operational measures and came into force on November 1, 2022, with the requirements for EEXI (Energy Efficiency Existing Ship Index) and CII (Carbon Intensity Indicator