The impact of regional environmental regulations on empirical vessel speeds

- We investigate the speed dynamics of vessels crossing in and out of the North Sea ECA.
- Speeds do not depend on market conditions but mainly voyage-specific variables.
- Average vessel speeds are significantly higher inside than outside the ECA.
- Stricter sulphur limits requiring the use of distillate fuels from 1. January 2015 did not cause any speed reduction.

Economic theory suggests that the use of more expensive low-sulphur fuel within an Emission Control Area (ECA) should result in lower vessel speeds. The objective of this paper is to investigate empirically, for the first time, whether the introduction of an ECA affects vessel speeds. We utilize a dataset of observed vessel speeds derived from the Automated Information System (AIS) for nearly 7000 ECA boundary crossings over a three-year period. Our results suggest that introducing stricter sulphur regulations inside the North Sea ECA from 1. January 2015 did not affect vessel speeds once changes in macroeconomic conditions are accounted for.