Environmental regulation on the energy-intensive container ship sector: A restraint or opportunity?. (March 2021)

• Record Type: Journal Article
• Authors: Kokosalakis, George; Merika, Anna; Merika, Xakousti-Afroditi
• Is Part Of: Marine policy. Volume 125(2021)
• Publication Date: 2021-03
• Subjects: Marine resources -- Economic aspects -- Periodicals; Fisheries -- Periodicals; Ressources marines -- Aspect économique -- Périodiques; Pêches -- Périodiques; Fisheries; Marine resources -- Economic aspects; Periodicals; 333.916405
• DOI: 10.1016/j.marpol.2020.104278
• Languages: English
• ISSNs: 0308-597X

Abstract

Abstract: This paper investigates how the containership sector has responded to the IMO environmental regulation. In doing so, it identifies the determinants of the IMO regulation compliance and derives a strong positive bidirectional relationship between the probability of compliance and lower fuel consumption in the container segment of the shipping sector. Using data for a population of over five hundred S&P of container ships registered in Clarkson's database over the period 2016–2019, this paper then employs cross-sectional analysis and General Method of Moments (GMM) estimation to derive the impact on the probability of compliance of fuel consumption, vessel size, type of fuel price differential, price of ships, vessels' age and country specifics. The findings are consistent with specific characteristics of the containers sector, such as high-energy intensity and a rather competitive market structure. Furthermore, they indicate that a restructuring is under way, towards a more environment friendly and fuel efficient sector. Finally, the buyers' and shipbuilding countries nationality, are found to be important factors in explaining the probability of compliance and preference for energy-efficient vessels. Highlights: We identify the determinants of IMO regulation compliance in the containers segment of the shipping sector. We employ cross sectional analysis and Moments (GMM) estimation to derive country specifics. We find that buyers' and shipbuilding countries nationality, are important factors in explaining the probability of compliance and preference for energy efficient containerships.