Assessment of ship speed, operational carbon intensity indicator penalty and charterer profit of time charter ships

Abstract

The operational carbon intensity indicator (CII) proposed by the International Maritime Organization (IMO) has been officially implemented on January 1, 2023. As an important way of ship operation, applicable time charter ships are subject to the CII regulation. How to properly deal with the CII regulation is a challenge for the shipowner and charterer of time charter ships. Speed reduction is an effective measure to reduce carbon emissions and carbon intensity of ships. This study establishes a speed model including CII penalty for time charter ships. Results show that speed reductions of a time charter ship of 10 %, 20 % and 30 % reduce carbon emissions by 27.1 %, 48.8 % and 65.7 % and carbon intensity by 19 %, 36 % and 51 %, respectively. Speed reduction leads to reductions of carbon emissions, carbon intensity and CII penalty, with greater reductions for larger ships. Under the optimal charterer profit, the speed of a time charter ship increases with the rise of freight rate and reduces with the decrease of freight rate. When the fluctuation range of freight rate is the same, the larger the ship type is, the smaller the speed adjustment range is. For the same ship type, when its freight rate decreases, it is suggested that the charterer reduces speed; otherwise, it is suggested that the charterer increases speed. For different ship types, if the shipping market is booming, the charterer should charter more large ships; otherwise, the charterer can choose more small ships.