Power Limitation


The EEXI Transition Clause is particularly useful for owners who are looking at power limitation as an option for EEXI modifications. In calculating the vessel’s updated speed and performance warranties, however, owners should pay attention to the type of limitation carried out and the effect on the vessel’s new service speed, particularly in light of the engine manufacturer’s recommendations.


Paragraph C(V) of the EEXI Transition Clause refers to “new maximum speed”


after power limitation and provides that the “new maximum speed” will replace the existing warranted “maximum figures” if lower than the existing warranted maximum figures. Ordinarily, a vessel’s speed and consumption warranties in the charterparties are not based on the


Pre-EEXI era (before applying engine power limitation)


13.5 kts 13.0 kts


10.5 kts Maximum speed


Service / operational speed at (warranted speed C/P)


Eco speed


13.5 kts 13.2 kts 13.0 kts


10.5 kts


vessel’s maximum speed, but rather the operational or service speed for ballast and laden conditions. A vessel very rarely sails at its maximum speed for extended periods.


As an example, a vessel with a maximum speed of 13.5 knots may have its warranted service speed at about 13.0 knots without any power limitation. As previously discussed, an older vessel may require a relatively higher power limitation in order to comply with EEXI Regulations as compared to its younger counterpart in the same segment. If the vessel’s new maximum operational or service speed after power limitation is below 13 knots as in Scenario B below (for older vessels), the owners will need to take into consideration the following before revising the vessel’s performance warranties:


(a) this new reduced operational speed; and (b) the impact on the vessel and its engine, if any.


Ideally, the updated performance warranties should reflect the vessel’s new


safe maximum operational


or service speed. Another thing to bear in mind, for older vessels, is the possibility of the imposed speed penalty, as explained in the Evidencing Compliance paragraph above. There have been some enquiries on whether the reduction in the vessel’s performance will allow a charterer to negotiate for a new hire rate. That is a commercial discussion for parties. The EEXI Transition Clause does not give charterers an automatic right to do so.


After engine power limitation


Maximum speed Power limitation applied


Unchanged Service / operational speed


Eco speed


13.5 kts 13.0 kts


12.5 kts 10.5 kts


Maximum speed Old service / operational speed


New max. service / operational speed warranted in C/P


Eco speed


Scenario A (newer vessel)


Scenario B (older vessel)


Simplified hypothetical scenarios showing how power limitation may or may not affect vessel’s operational speed


Key takeaways Plan early:


Shipowners have less than a year to go in order to ensure that their vessels comply with the EEXI Regulations. It is paramount that owners take steps to properly understand and ascertain the modifications which need to be carried out to the vessel in order to comply with the EEXI regulations. This requires a thorough discussion with all stakeholders, including engine makers and classification societies.


Collaboration is key:


When negotiating new long-term time charterparties, parties need to have a discussion to prepare for the vessel’s upcoming EEXI modifications, if any. Compliance with the EEXI regulations will, at the end of the day, benefit all parties who are trading the vessel. Owners and charterers cooperated and collaborated to implement the MARPOL 2020 sulphur regulations. They will need to continue such cooperation to comply with the EEXI requirements.


Verify the figures: Once the modifications are completed, owners should carry out the necessary trials and calculations prior to updating the vessel’s performance warranties in the charterparty and this will require proper coordination internally between the shipowner’s commercial and technical management.


The Report • June 2022 • Issue 100 | 81


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