Assessment of Regulated Slow Steaming in the Maritime Industry

On February 2012 the Clean Shipping Coalition (CSC) released a report on the impacts of vessel speed on emissions, technical constraints and other experiences with slow steaming and current speed regulations, analyzing at the same time the legal feasibility of regulated slow steaming. Currently, fleet average ship speeds vary as the shipping sector adapts to changing market circumstances. In recent years, speeds have been reduced in a response to an increasing supply of ships, a slower increase in demand for maritime transport and rising fuel prices.

Environmental impacts of slow steaming

As a rule of thumb, engine power output is a third power function of speed. Hence, when a ship reduces its speed by 10%, its engine power is reduced by 27%. Because it takes longer to sail a given distance at a lower speed, the energy required for a voyage is reduced by 19% (a quadratic function).

Within most speed ranges, fuel consumption and consequently emissions of carbon dioxide and sulphur oxides are reduced in line with the energy consumption. Only at very low speeds, the amount of fuel needed to provide a unit of output energy may increase somewhat, although this can be prevented by derating the engine.

The emissions of nitrogen oxides are reduced in line with the fuel consumption unless the engine load becomes very low. Below a certain engine dependent load, the absolute quantity of nitrogen oxide emissions is reduced, but less than fuel consumption.

There is still much uncertainty about the relation between engine load and emissions of black carbon. The available scientific evidence suggests that black carbon emissions will be reduced in line with fuel consumption until the engine load becomes very low.

In sum, slow steaming reduces all shipping air emissions. The environmental impacts of slow steaming are independent of whether ships slow down voluntarily or are required to do so by law.

Legal feasibility

The legal feasibility of regulating ship speed depends on where and how the speed control is imposed. Compulsory slow steaming can be imposed by a State on the ships flying its flag. For such ships the flag State has prescriptive and enforcement jurisdiction. Under a global agreement, Port States would also have the right to impose speed controls on ships flying the flag of non-party States.

For a regional speed control, the situation is more complex. Imposing slow steaming only on ships flying a flag within the region would risk distorting the market and, given the relative ease of changing flag, also risk eroding environmental impacts.

Feasibility of implementation

The feasibility of implementation depends on whether speed can be accurately monitored, both by the ship and the regulator, and whether a regulated speed can be set.
(S-)AIS systems, which most ships are required to have on board, allow both the ship and the regulator to monitor speed over ground. Moreover, independent verification of the average speed on a voyage is possible by inspecting logbook entries of when a ship leaves one port and enters another. There are no restrictions on the use of (S-)AIS data by regulatory parties.

A regulated speed that is dependent on ship size and type would be preferable to a single speed for all ships, mainly because the latter would distort the competitive market between ship types. Ship-specific speeds could be monitored based on self-reporting of verifiable data.

Technical constraints

Many shipping companies have experience with slow steaming in recent years. Even at very low engine loads, they have encountered only a few problems and these problems could be surmounted by small changes to operational procedures. Hence, it appears that there are very few technical constraints to slow steaming.

For new ships, the study did not identified constraints to lowering the design speed. There are constraints to the power of ships, related to the ships ability to manoeuver safely in adverse conditions, but ships can be equipped with redundant power, albeit at a cost. The decision becomes an economic consideration rather than a technical constraint. Ships designed for slower speeds may have a higher block coefficient. As a result, the third power relation between speed and engine power cannot be taken for granted for new ships.

Industry responses

As noted above, many ships have slowed down in the past years. As a consequence, industry players like shipping companies, logistics service providers, ports and shippers all have recent experience with slow steaming. According to the study, it appears that shipping companies and shippers have been most affected. These parties also have the strongest opinions about a regulated speed reduction.

Shipping companies face a constant need to manage their fleet size and available capacity while reducing their fuel costs where possible. Speed as a variable allows them to better manage these factors. The concept that slow steaming leads to a ‘greener’ supply chain is a well understood (if unintended) benefit, but carriers will likely return in large part to pre-2007 speeds when market conditions change and more capacity is required. Regulated speed reduction would restrict the degree of freedom that the shipping companies have in responding to changing market circumstances.

Shippers have been affected by slow steaming as they have had to build up their inventory levels and adjust their supply chains. They recognize the benefits of being able to market the use of ‘green’ shipping practices but do not feel that they have a consistent way to evaluate, communicate, and compare slow steaming with other tools to achieve similar goals.
According to the surveys conducted by the study, there was near universal opposition to the concept of mandatory speed limits. Reduced market flexibility was the primary reason for this.

Design of a global regulated slow steaming regime

The main aim of global regulated slow steaming would be to reduce CO2 emissions from shipping.

The development of a global regime for compulsory slow steaming provides the most difficult to achieve but least difficult to implement legal option. A general agreement on maximum speeds for each type of vessel approved by the IMO’s navigation committee and the MEPC would give global consent to such measures. This will reduce the risk of legal claims against regulated slow steaming. Building consensus within the IMO would be a necessary prerequisite.

The speed restriction should be expressed in average speed over ground so that it can be monitored and verified; and be dependent on the ship type and possibly size in order to limit distortions of competition.

In a global system, enforcement would be both through flag State and port State control. The responsible entity can in that case be the ship owner. In case the owner is not the operator of a ship, he can contractually pass on the obligation to respect the speed restriction to the operator.
The time to introduction depends on whether a new convention is needed or whether regulated slow steaming can be introduced as a revision to an existing convention. Recent experience within IMO suggests that a new convention may take 18-24 years from the time the issue is first raised until its entry into force. An amendment of an existing convention may take 5-15 years.

Design of an Arctic regulated slow steaming regime

The main aim of regulated slow steaming in the Arctic would be to reduce BC deposition on ice and snow in the Arctic.

Imposing speed restrictions in the Arctic can be done unilaterally by one or more States, as conditions for entry into their ports or by including speed restrictions in the Arctic as part of the, under development, Polar Code or finally by imposing such restrictions as an Associated Protective Measure within the designation of an Arctic PSSA.
The required speed would be an average speed within the geographical scope. A single speed for all ships, regardless of type or size, would be easier to monitor and enforce, but could have negative impacts on the competitive market between different ship types in the future.

The enforcement of an Arctic speed restriction could be organised by refusing entry to ports of contracting States to ships that cannot demonstrate compliance with the regulated slow steaming regime. The designation of a PSSA typically takes a few years.

Design of a European regulated slow steaming regime

Speed restrictions on ships sailing to EU ports could be introduced in order to reduce the climate impact of ships sailing to EU ports.

As argued above, a speed restriction on voyages to EU ports would need to be adopted as a condition of entry into an EU port. This may raise issues of extraterritorial impact of EU law.
The CSC report argues that a regulated slow steaming regime imposed on the high seas are not a violation of the exclusive rights of the flag State because they are not enforceable unless the ship voluntarily chooses to enter the port of the State imposing such controls. Thus it is submitted that speed restrictions on ships imposed as conditions for entry in the EU Member State ports are legally feasible. They are easier to justify when compliance is demanded for voyages to and from Member States. The port State has, in our view, jurisdiction to enforce such measures. Thus it is a matter for the national legislator whether the enforcement jurisdiction of the port State should be exercised against foreign ships violating such regulations.
In order for the speed restriction to be enforced, ships should report their average speed within the geographical scope to the regulator upon entering a port. If a ship can ascertain that it will continue to sail in Europe, the per voyage reporting requirement could be relaxed in order to reduce the administrative burden.

Enforcement of a regional speed restriction would ultimately take place by refusing ships that have sailed above the limit entry to EU ports.
An European Directive would take several years to be prepared and at least two years to be agreed upon by the Council and Parliament.

Costs and benefits of regulated slow steaming

Regulated slow steaming would have costs and benefits to the society. Based on a literature review and a stakeholder consultation, this report identifies the following items.
direct costs:

  • costs of building and operating additional ships (including fuel);
  • costs of ship and engine modifications;
  • higher inventory costs for maritime cargo;
  • monitoring costs;
  • direct benefits:
  • fuel savings;
  • indirect costs:
  • adjustment of logistical chains;
  • less innovation in energy saving technologies;
  • external benefits:
  • lower emissions of CO2, NOx, SOx and BC;
  • fewer whale strikes;
  • higher emissions associated with ship building.

The balance of costs and benefits depends on the stringency of the speed restriction, fuel prices, and the type of speed restriction, amongst others.

Costs and benefits of a global regulated slow steaming regime

A global regime which limits the average speed of ships to 85% of their average speed in 2007 would have benefits that outweigh the costs by USD 178 – 617 billion in the period up to 2050, depending on future fuel prices. This result takes into account social costs and benefits as defined above. The main costs are the purchase of additional ships and the main benefits are reduced net fuel expenditures. To put the benefit in perspective, the net present value of the baseline fuel costs of the shipping sector until 2050 are projected to be USD 5,900 billion in a base fuel price scenario.

Costs and benefits of a European regulated slow steaming regime

A regime in which all ships arriving in European ports would need to reduce their speed to 85% of their 2007 average would on balance either have a cost of USD 1 billion or net benefits of up to USD 74 billion, again depending on fuel prices. In the base and high fuel price scenarios, the benefits outweigh the costs, but not in a low fuel price scenario

Conclusion

Slow steaming has significant environmental benefits. Mandatory slow steaming may, depending on the stringency of the speed restriction, also have economic benefits. The economic benefits are larger for ships that spend a large number of days at sea.

Slow steaming is already widely practiced as a result of changed market circumstances. If markets would revert to the pre-2008 situation, the chances are that ships will speed up again. Experiences with slow steaming vary across stakeholders. Typically, shipping companies have benefited from slow steaming while shippers have had to adjust to the new situation, e.g. by increasing their inventory levels.

Mandatory slow steaming is legally feasible either under a global agreement or unilaterally as a condition of entry to a port.

Source: Transport and Environment

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  1. […] speed limits to protect right whales, but this was the first time I have heard that anyone was considering restrictions on merchant shipping that might be applied […]

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