AER (Annual Efficiency Ratio)

The Annual Efficiency Ratio (AER) is a carbon-intensity proxy equal to annual CO2 emissions divided by deadweight times distance sailed: AER = (annual fuel consumed x CO2 emission factor) / (design deadweight x distance). It uses design deadweight as a stand-in for actual cargo, so it ignores utilization and rewards no load factor. AER is the metric the Poseidon Principles use to score ship-finance portfolios against decarbonization trajectories. The IMO CII uses the same deadweight-based form for most ship types but applies fuel-specific CO2 factors and capacity definitions set in MEPC.336(76).