Maritime research and forecasting consultancy Maritime Strategies International (MSI) suggests that the Capesize bulk carrier fleet, ironically given its young age, could be impacted more by CII regulations than other bulk segments.
This impact comes because a large share of the existing fleet was constructed between 2006-2011, before more fuel-efficient designs were developed in 2013-14.
In its Q1 2022 dry bulk market report MSI assessed the EEXI values of the fleet by using a range of data sources, sense-checked with a selection of owners. It estimates that just under 80% of dry bulk ships will not meet EEXI regulations, and in almost all cases, MSI believes that dry bulk vessels will fit an engine power limiter (EPL) to meet the requirements.
“Older vessels requiring a large EPL to meet EEXI criteria would have the least flexibility of operations, reducing their potential to speed up to meet laycan windows when faced with delays such as those caused by bad weather. Ultimately this would lead to lower cargo volume and a reduction in potential freight revenue, reducing the economic life of a ship,” said Will Fray, Director, MSI. “A significant number of 10-15 year old ships are at risk and over the next five years will age into a bracket much more susceptible to being scrapped, particularly if freight markets decline from today’s levels, as forecasted by MSI.”
The full impact of CII regulations will likely take longer to realise, and MSI will be undertaking more analysis to help understand the likely impact once EPLs are considered. In MSI’s current Base Case, CII is one justification for a sharp rise in vessel scrapping from 2024.
MSI has added a new tool, Environmental Credentials, to its Forecast Marine eValuator (FMV) service, enabling users to understand the performance of their vessels and fleets – and those of their competitors – against regulatory and market benchmarks.
Environmental Credentials assessments are created when users run an FMV report – for individual ships, sectors, classes and fleets – providing ratings against the IMO’s EEXI and CII regulations to 2026 and Annual Efficiency Ratios for 2020 and 2021 measured against the Poseidon Principles trajectory and a zero emissions scenario by 2050.
The analysis is currently available for tankers, bulk carriers and containerships and will be extended to specialist vessel sectors in the near future. FMV also provides users with historical, current and forecast vessel asset values, one year timecharter rates and operating costs.
