According to new research by Veson Nautical, decarbonization regulations push down the average speed of the global bulker fleet.
Decarbonization regulation
Estimated carbon emissions from bulk carrier vessels have fallen by 5 million tonnes, or 2.5%, since the beginning of 2021, although an increase in the distance traveled and time spent underway according to new research by Veson Nautical (Veson), a global leader in maritime data and freight management solutions.
The research, published in a whitepaper titled ‘How are the CII and EEXI Regulations Influencing a Strong Bulk Market?’ cites a reduction in average speed by bulk vessels to comply with efficiency regulations imposed by the International Maritime Organization (IMO) as the main driver of this change.
Kirkham adds that large bulk-carrying Panamax class vessels have seen their average speed decline from 11.66kts in 2018, to 11.27kts in 2024 year-to-date, a decrease of 3.3% compared to 2018. This is despite charter rates for the same vessels reaching a peak of $17,815/day in April 2024, an increase of 23% compared to peak rates of $14,500/day reached in 2018.
The whitepaper also suggests that the main drivers are new rules aimed at lowering the carbon intensity of large bulk vessels. The introduction of the Carbon Intensity Indicator (CII) regulation by the IMO has provided the first standardized operational efficiency metric for the shipping sector, which gives vessels ratings based on fuel oil consumption, speed, and distance figures collected over the year.
From 1 January 2023, the IMO made it mandatory for all existing ships to calculate their attained Energy Efficiency Existing Ship Index (EEXI) to measure a vessel’s technical energy efficiency and initiated the reporting and assignment of CII ratings. The EEXI scheme placed a requirement on shipowners to modify non-compliant vessels to meet the newer, more stringent efficiency design criteria stipulated in the EEXI regulations.
The report concludes that as more pressure is put on ship owners to clean up their fleets, a two-tier charter market where premium rates are paid for newer, less carbon-intensive vessels.
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Source: Veson
