List of context dependent inverters

The section deals with the effect of two possible market-based measures in order to reduce the CO2 emissions produced by the ships. The analysis considers a fixed service period equal to 7 whereas it considers the number of ships as variable. Consequently, the scenario analysed are similar to the fixed service frequency scenarios. Such solutions market-based measures are:

 Bunker levy: a bunker levy is a cost added to the bunker price per tonne. Such measure has the same effect of a fuel price’s rise. The bunker prices employed in the study are reported in table 6.20 ;

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17

Scenario 1 22,68 20,38 20,38 18,10 16,55 18,10 15,99 15,99 15,00 15,99 18,10 20,38 20,38 22,68 22,68 24,00 22,68

Scenario 2-base 20,38 20,38 18,10 18,10 18,10 18,10 18,10 18,10 18,10 18,10 18,10 18,10 20,38 20,38 20,38 20,88 20,38

Scenario 3 20,38 20,38 20,38 20,38 18,10 18,80 18,10 18,10 18,10 18,10 18,10 20,38 20,38 20,38 20,38 20,38 20,38

Daily inventory costs 63533 57564 51594 45625 39655 44446 38891 33335 27779 35141 42503 49865 57226 64588 77506 83403 69503

0 10000 20000 30000 40000 50000 60000 70000 80000 90000

0,00 5,00 10,00 15,00 20,00 25,00 30,00

Inventory costs per day [USD/day]

Speed on the leg [knots]

Leg

Page 156 Speed optimization and environmental effect in container liner shipping

Bunker price

Scenario P [USD/tonne] Bunker levy [USD/tonne]

1-base 365 /

2 415 50

3 465 100

4-speed limit 365 /

Table 6.20: Bunker prices concerning the scenarios simulated in the comparison between a bunker levy policy and a speed limit policy

 Speed limit policy: a speed limit policy means imposing a maximum speed to the vessels. Strictly speaking, such policy is not a market-based measures however it is considered in such way in order to compare his effects with respect to the bunker levy’s effects. The CO2 emissions are linked to the speed of the ship hence limiting the maximum speed entails a reduction concerning the CO2 emissions.

However, limiting the maximum speed implies a rise of the number of ships deployed. The study considers as upper limit a speed of 18 knots;

The study assesses the measures through their cost efficiency. The cost efficiency CEi

[USD/tonne] of such measures is calculated employing the equation 6.39. The difference between the daily revenue in the scenario 1 𝜋̇_{1−𝑏𝑎𝑠𝑒}, which is the base scenario hence it does not involve any measure to reduce the CO2 emissions, and the daily profits in the considered scenario 𝜋̇_𝑖 is the cost of implementing the measure. The difference between the daily CO2 emissions in the scenario 1 Ed,1-base and the daily CO2 emissions in the considered scenario Ed,i-base is the amount of emissions avoided through the measure. As explained in section 3.3.3, the ratio between these two values is the cost efficiency of the measure analysed:

𝐶𝐸_𝑖 = 𝜋̇_{1−𝑏𝑎𝑠𝑒}− 𝜋̇_𝑖 𝐸_{𝑑,1−𝑏𝑎𝑠𝑒}− 𝐸_𝑑,𝑖

(6.40) Since the equation 6.39 contains the daily profits as well as the daily CO2 emissions, the result is the same in employing their values calculated over a specific time lapse. Indeed, in such case, each factor would be multiplied by the same duration of time.

Table 6.21 contains the results concerning the analysis for each route. The results given by the model show that limiting the speed at the maximum value of 18 knots allows obtaining the best results in each route involved. On the contrary, the bunker price policy seems to be inefficient as the cost of avoiding the emissions of one ton of CO2 is by far higher than in the speed limit scenario. Besides, the bunker levy of 50 USD/tonnes is inapplicable since the cost efficiency is excessively high. Indeed, as shown in figure 5.57, despite the bunker levy, the fuel price is not enough to force the ship owner to deploy a new ship along the route, therefore in order to maintain the service frequency the average speed cannot largely vary. On the contrary, the 100-bunker levy scenario force the number of ships to increase, reducing the emissions. Nevertheless, the higher fuel expenditure reduces the carrier’s income more than in the speed limit scenario because in such scenario the ship owner has only to afford the cost of deploying a new vessel. The results

Speed optimization and environmental effect in container liner shipping Page 157 concerning the route TP1 are extremely high because neither the 100-scenario nor the speed limit scenario leads to increase the number of ships. For such scenario would be necessary a higher bunker levy or similarly a lower upper limit concerning the speeds in order to achieve some interesting results.

Therefore, a market-based measure should take into account the specific characteristics of the routes involved. For example, for the route TP1 a specific speed limit should be imposed, lower than for the route NEUATL1 and AE2. Finally, one can observe that in the container ship industry, in which there is a mandatory service frequency, the only viable solution in order to curb the CO2 emissions has to force the carriers to increase the number of ships deployed along their services. Indeed, given a service frequency, the average speed along the route is about constant unless the number of ships increase. Table 6.22 reports the results concerning the number of ships, the average speed, the daily profit and the daily CO2 emissions for the route NEUATL1.

Comparison results Route AE2

Scenario Cost efficiency [USD/tonne]

2 9236

3 168,7

4-speed limited 32,44

Route TP1

Scenario Cost efficiency [USD/tonne]

2 /

3 22711

4-speed limited 6488,3

Route NEUATL1

Scenario Cost efficiency [USD/tonne]

2 159474,9

3 84,7

4-speed limited 20,1

Table 6.21: Cost efficiency of the analysis concerning the effect of market-based measures

Results route NEUATL1

Scenario N Average speed

[knots]

Table 6.22: Results for the route NEUATL1 concerning the market-based measures effect

Page 158 Speed optimization and environmental effect in container liner shipping The results obtained in this paper can be compared with the results provided in (Cariou and Cheaitou, 2012). Such paper deals with the comparison between a bunker levy policy and a speed limit, however in such thesis the speed limit comprise only a specific area.

Taking into account the differences between the model provided in the paper and the model contained in the thesis, the cost efficiency comparison between the two policies leads to the same results. (Cariou and Cheaitou, 2012) provide the results concerning the route Northern Europe/North America, which are reported in table 6.23. In the same table are reported the cost efficiencies obtained applying the two policies. The cost efficiencies are calculated as made for the results obtained in this paper, i.e. dividing the difference between the profit of the base scenario and the profit of the scenario in which the considered policy is applied by the difference of the CO2 emissions in the two scenarios.

Results (Cariou and Cheaitou, 2012) Scenario Daily profit [USD/day] Daily CO2 emissions

[tonnes/day]

Cost efficiency [USD/tonne]

1-base 1451041 1072 /

2-bunker levy

(95 USD/tonne) 1420926 901 176,1

3-speed limit 1442417 936 63,4

Table 6.23: Cost efficiencies for (Cariou and Cheaitou, 2012)

Speed optimization and environmental effect in container liner shipping Page 159

C ^HAPTER 7