Carbon Capture on Ships and Effect on Required Freight Rate

The economics of ship operations are investigated when a carbon capture and storage system (CCS) is installed on the ship. Three CCS storage methods that have been considered are 1) Compressed and Refrigerated Liquid Storage, 2) Compressed Gas Storage at Ambient Temperature and 3) Compressed Fluid at Ambient Temperature. All these methods manifest themselves in the ship as requiring an allocation for weight, deck area, volume and power thereby affecting the ship’s flotation and stability. These in turn will reduce the cargo or payload which can be accommodated in the ship. Accordingly a measure of the CCS impact will be the additional cost per unit of cargo delivered. A common representation of this quantity is the required freight rate (RFR) which was first proposed in the 1960’s as a way to analyze the economic features of a particular ship and its service over its lifetime. It has proved to be a means of identifying the optimum vessel characteristics for design and construction, the speed at which it would most economically operate and the required revenue per unit weight of cargo to meet financial goals. The RFR analysis is utilized herein to determine the vessel profitability and fuel consumption at alternate operating speeds. Additionally, the impact of a feebate tax levy or subsidy are considered as well. It is applied herein to Handymax and Capesize bulk carriers and oil tankers, as well as a Post-Panamax containership.