Optimal Slow Steaming Speed for Container Ships under the EU Emission Trading System

Slow steaming is an operational measure in ocean-going vessels sailing at slow speeds. It can help climate mitigation efforts by cutting down marine fuel consumption and consequently reducing CO2 and other Greenhouse Gas Emissions (GHG). Due to climate change both the European Union (EU) and the Int...

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Autores: Goicoechea Larracoechea, Nestor, Abadie, Luis María
Tipo de recurso: artículo
Fecha de publicación:2021
País:España
Institución:Universidad del País Vasco
Repositorio:Addi. Archivo Digital para la Docencia y la Investigación
OAI Identifier:oai:addi.ehu.eus:10810/54401
Acceso en línea:http://hdl.handle.net/10810/54401
Access Level:acceso abierto
Palabra clave:slow steaming
container ship
greenhouse gas emissions
bunker price
freight rate
optimal decision
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spelling Optimal Slow Steaming Speed for Container Ships under the EU Emission Trading SystemGoicoechea Larracoechea, NestorAbadie, Luis Maríaslow steamingcontainer shipgreenhouse gas emissionsbunker pricefreight rateoptimal decisionSlow steaming is an operational measure in ocean-going vessels sailing at slow speeds. It can help climate mitigation efforts by cutting down marine fuel consumption and consequently reducing CO2 and other Greenhouse Gas Emissions (GHG). Due to climate change both the European Union (EU) and the International Maritime Organization (IMO) are analysing the inclusion of international shipping in the EU Emissions Trading System (ETS) in the near future or alternatively implementing a carbon tax. The paper proposes a methodology to decide the optimal speed of a vessel taking into account its characteristics and the factors that determine its economic results. The calculated cash flow can be used in valuation models. The methodology is applied for a case study for any container ship in a range from 2000 to 20,000 Twenty-foot Equivalent Units (TEU) on a leg of a round trip from Shanghai to Rotterdam. We calculate how speed reduction, CO2 emissions and ship owner’s earnings per year may vary between a business-as-usual scenario and a scenario in which shipping is included in the ETS. The analysis reveals that the optimal speed varies with the size of the vessel and depends on several variables such as marine fuel prices, cargo freight rates and other voyage costs. Results show that the highest optimal speed is in the range of 5500–13,000 TEUs whether or not the ETS is applied. As the number of TEUs transported in a vessel increases emissions per TEU decrease. In an established freight rate market, the optimal speed fluctuates by 1.8 knots. Finally, the medium- and long-term expectations for slow steaming are analysed based on future market prices.This research is supported by the Basque Government through the BERC 2018–2021 programme and by the Spanish Ministry of Economy and Competitiveness (MINECO) through BC3 María de Maeztu excellence accreditation MDM-2017-0714. Further support is provided by the project MINECO RTI 2018-093352-B-I00.MDPI2021202120212021info:eu-repo/semantics/articleapplication/pdfhttp://hdl.handle.net/10810/54401reponame:Addi. Archivo Digital para la Docencia y la Investigacióninstname:Universidad del País VascoInglésinfo:eu-repo/grantAgreement/MINECO/RTI 2018-093352-B-I00/https://www.mdpi.com/1996-1073/14/22/7487/htminfo:eu-repo/semantics/openAccesshttp://creativecommons.org/licenses/by/3.0/es/2021 by the authors. Licensee MDPI, Basel, Switzerland. This article is an open access article distributed under the terms and conditions of the Creative Commons Attribution (CC BY) license (https://creativecommons.org/licenses/by/4.0/).oai:addi.ehu.eus:10810/544012026-06-18T09:23:17Z
dc.title.none.fl_str_mv Optimal Slow Steaming Speed for Container Ships under the EU Emission Trading System
title Optimal Slow Steaming Speed for Container Ships under the EU Emission Trading System
spellingShingle Optimal Slow Steaming Speed for Container Ships under the EU Emission Trading System
Goicoechea Larracoechea, Nestor
slow steaming
container ship
greenhouse gas emissions
bunker price
freight rate
optimal decision
title_short Optimal Slow Steaming Speed for Container Ships under the EU Emission Trading System
title_full Optimal Slow Steaming Speed for Container Ships under the EU Emission Trading System
title_fullStr Optimal Slow Steaming Speed for Container Ships under the EU Emission Trading System
title_full_unstemmed Optimal Slow Steaming Speed for Container Ships under the EU Emission Trading System
title_sort Optimal Slow Steaming Speed for Container Ships under the EU Emission Trading System
dc.creator.none.fl_str_mv Goicoechea Larracoechea, Nestor
Abadie, Luis María
author Goicoechea Larracoechea, Nestor
author_facet Goicoechea Larracoechea, Nestor
Abadie, Luis María
author_role author
author2 Abadie, Luis María
author2_role author
dc.subject.none.fl_str_mv slow steaming
container ship
greenhouse gas emissions
bunker price
freight rate
optimal decision
topic slow steaming
container ship
greenhouse gas emissions
bunker price
freight rate
optimal decision
description Slow steaming is an operational measure in ocean-going vessels sailing at slow speeds. It can help climate mitigation efforts by cutting down marine fuel consumption and consequently reducing CO2 and other Greenhouse Gas Emissions (GHG). Due to climate change both the European Union (EU) and the International Maritime Organization (IMO) are analysing the inclusion of international shipping in the EU Emissions Trading System (ETS) in the near future or alternatively implementing a carbon tax. The paper proposes a methodology to decide the optimal speed of a vessel taking into account its characteristics and the factors that determine its economic results. The calculated cash flow can be used in valuation models. The methodology is applied for a case study for any container ship in a range from 2000 to 20,000 Twenty-foot Equivalent Units (TEU) on a leg of a round trip from Shanghai to Rotterdam. We calculate how speed reduction, CO2 emissions and ship owner’s earnings per year may vary between a business-as-usual scenario and a scenario in which shipping is included in the ETS. The analysis reveals that the optimal speed varies with the size of the vessel and depends on several variables such as marine fuel prices, cargo freight rates and other voyage costs. Results show that the highest optimal speed is in the range of 5500–13,000 TEUs whether or not the ETS is applied. As the number of TEUs transported in a vessel increases emissions per TEU decrease. In an established freight rate market, the optimal speed fluctuates by 1.8 knots. Finally, the medium- and long-term expectations for slow steaming are analysed based on future market prices.
publishDate 2021
dc.date.none.fl_str_mv 2021
2021
2021
2021
dc.type.none.fl_str_mv info:eu-repo/semantics/article
format article
dc.identifier.none.fl_str_mv http://hdl.handle.net/10810/54401
url http://hdl.handle.net/10810/54401
dc.language.none.fl_str_mv Inglés
language_invalid_str_mv Inglés
dc.relation.none.fl_str_mv info:eu-repo/grantAgreement/MINECO/RTI 2018-093352-B-I00/
https://www.mdpi.com/1996-1073/14/22/7487/htm
dc.rights.none.fl_str_mv info:eu-repo/semantics/openAccess
http://creativecommons.org/licenses/by/3.0/es/
eu_rights_str_mv openAccess
rights_invalid_str_mv http://creativecommons.org/licenses/by/3.0/es/
dc.format.none.fl_str_mv application/pdf
dc.publisher.none.fl_str_mv MDPI
publisher.none.fl_str_mv MDPI
dc.source.none.fl_str_mv reponame:Addi. Archivo Digital para la Docencia y la Investigación
instname:Universidad del País Vasco
instname_str Universidad del País Vasco
reponame_str Addi. Archivo Digital para la Docencia y la Investigación
collection Addi. Archivo Digital para la Docencia y la Investigación
repository.name.fl_str_mv
repository.mail.fl_str_mv
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