CMA CGM: Reducing the Carbon Footprint of Container Shipping

Harvard Business School Teaching Note No.

Courseware No. 623-710
Supplemental Spreadsheet for Instructors

This courseware was prepared solely as the basis for class discussion. Copyright
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PRX - Pearl River Express

Deadweight tonnage (tons) 150,000

Distance for one rotation (nm) 12,878
Scenario 1: Marine Fuel Oil, Regular Speed Scenario 3: Biofuel, Regular Speed"

Scenario 1 Scenario 2 Scenario 3 Scenario 4

Marine Fuel Oil Marine Fuel Oil Biofuel LNG Fuel CII REQUIRED CII REQUIRED
Regular Speed Slow Steam Regular Speed Regular Speed YEAR Z AER/CIIrequired % Grade Vessel Operable? YEAR Z AER/CIIrequired % Grade Vessel Operable?
(g CO2/ton - nm) (g CO2/ton - nm)
Fuel consumption, one rotation, tons (exhibit 3,600 3,000 3,600 2,600
CO2 emission factor 3.151 3.151 2.39 2.75 2023 5% 5.5 106% C Yes 2023 5% 5.5 80% A Yes
2024 7% 5.4 108% D Yes 2024 7% 5.4 82% A Yes
Number of vessels assigned 6 7 6 6 2025 9% 5.3 110% D Yes 2025 9% 5.3 84% B Yes
Rotation duration (days) 42 49 42 42 2026 11% 5.2 113% D Yes 2026 11% 5.2 86% B Yes
Number of rotations per year 8.69 7.45 8.69 8.69 2027 13% 5.1 116% D No Quá 3 năm -> say no 2027 13% 5.1 88% B Yes
Annual distance traveled 111,916 95,928 111,916 111,916 2028 15% 5.0 118% D No 2028 15% 5.0 90% B Yes
2029 17% 4.8 121% E No 2029 17% 4.8 92% B Yes
CO2 per rotation, one ship, tons 11,344 9,453 8,604 7,150 2030 19% 4.7 124% E No 2030 19% 4.7 94% C Yes
Annual fuel consumption, tons 31,286 22,347 31,286 22,595 2031 21% 4.6 127% E No 2031 21% 4.6 97% C Yes
2032 23% 4.5 131% E No 2032 23% 4.5 99% C Yes
Annual CO2 emissions, tons 98,581 70,415 74,773 62,137 2033 25% 4.4 134% E No 2033 25% 4.4 102% C Yes
2034 27% 4.3 138% E No 2034 27% 4.3 104% C Yes
AER 5.87 4.89 4.45 3.70 2035 29% 4.1 142% E No 2035 29% 4.1 107% D Yes
2036 31% 4.0 146% E No 2036 31% 4.0 111% D Yes
2037 33% 3.9 150% E No 2037 33% 3.9 114% D Yes
2038 35% 3.8 155% E No 2038 35% 3.8 117% D No
2039 37% 3.7 160% E No 2039 37% 3.7 121% E No
2040 39% 3.6 165% E No 2040 39% 3.6 125% E No
Profitability Analysis 2041 41% 3.4 170% E No 2041 41% 3.4 129% E No
2042 43% 3.3 176% E No 2042 43% 3.3 134% E No
Costs, per vessel per annum 2043 45% 3.2 183% E No 2043 45% 3.2 139% E No
Capital cost of new build ship $120,000,000 $120,000,000 $120,000,000 $150,000,000 2044 47% 3.1 190% E No 2044 47% 3.1 144% E No
Depreciation, per year, straight line 25 yr $4,800,000 $4,800,000 $4,800,000 $6,000,000 2045 49% 3.0 197% E No 2045 49% 3.0 150% E No
OPEX, Annual $2,920,000 $2,920,000 $2,920,000 $3,650,000 2046 51% 2.9 205% E No 2046 51% 2.9 156% E No
Fuel Cost 2047 53% 2.7 214% E No 2047 53% 2.7 162% E No
Cost per ton $800 $800 $1,200 $1,200
Annual $25,028,571 $17,877,551 $37,542,857 $27,114,286 Scenario 2: Marine Fuel Oil, Slow Steam Scenario 4: LNG Fuel, Regular Speed
Port Fees $1,738,095 $1,489,796 $1,738,095 $1,738,095
Total costs $34,486,667 $27,087,347 $47,000,952 $38,502,381 CII REQUIRED CII REQUIRED
YEAR Z AER/CIIrequired % Grade Vessel Operable? YEAR Z AER/CIIrequired % Grade Vessel Operable?
(g CO2/ton - nm) (g CO2/ton - nm)
Income, per vessel per annum 2023 5% 5.5 88% B Yes 2023 5% 5.5 67% A Yes
Allocated capacity, TEU per rotation 13,000 13,000 13,000 13,000 2024 7% 5.4 90% B Yes 2024 7% 5.4 68% A Yes
Annual capacity 112,976 96,837 112,976 112,976 2025 9% 5.3 92% B Yes 2025 9% 5.3 70% A Yes
Net Income per TEU $400 $400 $400 $400 2026 11% 5.2 94% C Yes 2026 11% 5.2 71% A Yes
Total income $45,190,476 $38,734,694 $45,190,476 $45,190,476 2027 13% 5.1 96% C Yes 2027 13% 5.1 73% A Yes
2028 15% 5.0 99% C Yes 2028 15% 5.0 75% A Yes
P&L including depreciation $10,703,810 $11,647,347 ($1,810,476) $6,688,095 2029 17% 4.8 101% C Yes 2029 17% 4.8 76% A Yes
Cashflow $15,503,810 $16,447,347 $2,989,524 $12,688,095 2030 19% 4.7 103% C Yes 2030 19% 4.7 78% A Yes
2031 21% 4.6 106% C Yes 2031 21% 4.6 80% A Yes
For entire fleet on this rotation 2032 23% 4.5 109% D Yes 2032 23% 4.5 82% A Yes
P&L including depreciation $64,222,857 $81,531,429 ($10,862,857) $40,128,571 2033 25% 4.4 112% D Yes 2033 25% 4.4 85% B Yes
Cashflow $93,022,857 $115,131,429 $17,937,143 $76,128,571 2034 27% 4.3 115% D Yes 2034 27% 4.3 87% B Yes
2035 29% 4.1 118% D No 2035 29% 4.1 89% B Yes
2036 31% 4.0 121% E No 2036 31% 4.0 92% B Yes
2037 33% 3.9 125% E No 2037 33% 3.9 95% C Yes
2038 35% 3.8 129% E No 2038 35% 3.8 98% C Yes
2039 37% 3.7 133% E No 2039 37% 3.7 101% C Yes
2040 39% 3.6 137% E No 2040 39% 3.6 104% C Yes
2041 41% 3.4 142% E No 2041 41% 3.4 107% D Yes
2042 43% 3.3 147% E No 2042 43% 3.3 111% D Yes
2043 45% 3.2 152% E No 2043 45% 3.2 115% D Yes
2044 47% 3.1 158% E No 2044 47% 3.1 120% E No
2045 49% 3.0 164% E No 2045 49% 3.0 124% E No
2046 51% 2.9 171% E No 2046 51% 2.9 129% E No
2047 53% 2.7 178% E No 2047 53% 2.7 135% E No
EX1 - Eagle Express 1

Deadweight tonnage 76,000

Distance for one rotation 15,000

Scenario 1 Scenario 2
Marine Fuel Oil Marine Fuel Oil
Regular Speed Slow Steam
Fuel consumption, one rotation, tons 2,700 1,600
CO2 emission factor 3.151 3.151

Number of vessels assigned 6 7

Rotation duration (days) 42 49
Number of rotations per year 8.69 7.45
Annual distance traveled 130,357 111,735

CO2 per rotation, one ship 8,508 5,042

Annual fuel consumption 23,464 11,918

Annual CO2 emissions 73,936 37,555

AER 7.46 4.42

Profitability Analysis

Costs, per vessel per annum

Capital cost of new build ship $65,000,000 $65,000,000
Depreciation, per year, straight line 25 yr $2,600,000 $2,600,000
OPEX, Annual $2,555,000 $2,555,000
Fuel Cost
Cost per ton $700 $700
Annual $16,425,000 $8,342,857
Port Fees $1,738,095 $1,489,796
Total costs $23,318,095 $14,987,653

Income, per vessel per annum

Allocated capacity, TEU per rotation 5,000 5,000
Annual capacity 43,452 37,245
Net Income per TEU $1,000 $1,000
Total income $43,452,381 $37,244,898

P&L including depreciation $20,134,286 $22,257,245

Cashflow $22,734,286 $24,857,245

For entire fleet on this rotation

P&L including depreciation $120,805,714 $155,800,714
Cashflow $136,405,714 $174,000,714

Source: Prepared by author using company data.

 Scenario 1: Marine Fuel Oil, Regular Speed

Scenario 3 Scenario 4
Biofuel LNG Fuel
Regular Speed Regular Speed YEAR Z

2,700 2,500
2.39 2.75 2023 5%
2024 7%
6 6 2025 9%
42 42 2026 11%
8.69 8.69 2027 13%
130,357 130,357 2028 15%
2029 17%
6,453 6,875 2030 19%
23,464 21,726 2031 21%
2032 23%
56,080 59,747 2033 25%
2034 27%
5.66 6.03 2035 29%
2036 31%
2037 33%
2038 35%
2039 37%
2040 39%
2041 41%
2042 43%
2043 45%
$65,000,000 $90,000,000 2044 47%
$2,600,000 $3,600,000 2045 49%
$2,555,000 $3,285,000 2046 51%
2047 53%
$1,200 $1,350
$28,157,143 $29,330,357 Scenario 2: Marine Fuel Oil, Slow Steam
$1,738,095 $1,738,095
$35,050,238 $37,953,452
YEAR Z

2023 5%
5,000 5,000 2024 7%
43,452 43,452 2025 9%
 $1,000 $1,000 2026 11%
$43,452,381 $43,452,381 2027 13%
2028 15%
$8,402,143 $5,498,929 2029 17%
$11,002,143 $9,098,929 2030 19%
2031 21%
2032 23%
$50,412,857 $32,993,571 2033 25%
$66,012,857 $54,593,571 2034 27%
2035 29%
2036 31%
2037 33%
2038 35%
2039 37%
2040 39%
2041 41%
2042 43%
2043 45%
2044 47%
2045 49%
2046 51%
2047 53%
ne Fuel Oil, Regular Speed

CII REQUIRED
AER/CIIrequired % Grade Vessel Operable?
(g CO2/ton - nm)

7.7 96% C Yes

7.6 99% C Yes
7.4 101% C Yes
7.2 103% C Yes
7.1 105% C Yes
6.9 108% D Yes
6.8 110% D Yes
6.6 113% D Yes
6.4 116% D No
6.3 119% E No
6.1 122% E No
5.9 126% E No
5.8 129% E No
5.6 133% E No
5.5 137% E No
5.3 141% E No
5.1 145% E No
5.0 150% E No
4.8 155% E No
4.6 161% E No
4.5 167% E No
4.3 173% E No
4.2 180% E No
4.0 187% E No
3.8 195% E No

ne Fuel Oil, Slow Steam

CII REQUIRED
AER/CIIrequired % Grade Vessel Operable?
(g CO2/ton - nm)
7.7 57% A Yes
7.6 58% A Yes
7.4 60% A Yes
7.2 61% A Yes
7.1 62% A Yes
6.9 64% A Yes
6.8 65% A Yes
6.6 67% A Yes
6.4 69% A Yes
6.3 71% A Yes
6.1 72% A Yes
5.9 74% A Yes
5.8 76% A Yes
5.6 79% A Yes
5.5 81% A Yes
5.3 84% B Yes
5.1 86% B Yes
5.0 89% B Yes
4.8 92% B Yes
4.6 95% C Yes
4.5 99% C Yes
4.3 102% C Yes
4.2 106% C Yes
4.0 111% D Yes
3.8 116% D Yes
Scenario 3: Biofuel, Regular Speed"

CII REQUIRED
YEAR Z AER/CIIrequired % Grade
(g CO2/ton - nm)

2023 5% 7.7 73% A

2024 7% 7.6 75% A
2025 9% 7.4 76% A
2026 11% 7.2 78% A
2027 13% 7.1 80% A
2028 15% 6.9 82% A
2029 17% 6.8 84% B
2030 19% 6.6 86% B
2031 21% 6.4 88% B
2032 23% 6.3 90% B
2033 25% 6.1 93% B
2034 27% 5.9 95% C
2035 29% 5.8 98% C
2036 31% 5.6 101% C
2037 33% 5.5 104% C
2038 35% 5.3 107% C
2039 37% 5.1 110% D
2040 39% 5.0 114% D
2041 41% 4.8 118% D
2042 43% 4.6 122% E
2043 45% 4.5 126% E
2044 47% 4.3 131% E
2045 49% 4.2 136% E
2046 51% 4.0 142% E
2047 53% 3.8 148% E

Scenario 4: LNG Fuel, Regular Speed

CII REQUIRED
YEAR Z AER/CIIrequired % Grade
(g CO2/ton - nm)
2023 5% 7.7 78% A
2024 7% 7.6 80% A
2025 9% 7.4 81% A
2026 11% 7.2 83% B
2027 13% 7.1 85% B
2028 15% 6.9 87% B
2029 17% 6.8 89% B
2030 19% 6.6 91% B
2031 21% 6.4 94% B
2032 23% 6.3 96% C
2033 25% 6.1 99% C
2034 27% 5.9 101% C
2035 29% 5.8 104% C
2036 31% 5.6 107% D
2037 33% 5.5 111% D
2038 35% 5.3 114% D
2039 37% 5.1 118% D
2040 39% 5.0 121% E
2041 41% 4.8 126% E
2042 43% 4.6 130% E
2043 45% 4.5 135% E
2044 47% 4.3 140% E
2045 49% 4.2 145% E
2046 51% 4.0 151% E
2047 53% 3.8 158% E
Vessel Operable?

Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
No
No
No
No
No
No

Vessel Operable?

Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
No
No
No
No
No
No
No
No
No
CAGEMA - Cagema Main Liner

Deadweight tonnage 24,000

Distance for one rotation 3,875

Scenario 1 Scenario 2
Marine Fuel Oil Marine Fuel Oil
Regular Speed Slow Steam
Fuel consumption, one rotation, tons 330 300
CO2 emission factor 3.151 3.151

Number of vessels assigned 3 4

Rotation duration (days) 21 28
Number of rotations per year
Annual distance traveled

CO2 per rotation, one ship

Annual fuel consumption

Annual CO2 emissions

AER

Profitability Analysis

Costs, per vessel per annum

Capital cost of new build ship $40,000,000 $40,000,000
Depreciation, per year, straight line 25 yr
OPEX, Annual
Fuel Cost
Cost per ton $850 $850
Annual
Port Fees
Total costs

Income, per vessel per annum

Allocated capacity, TEU per rotation 1,800 1,800
Annual capacity
Net Income per TEU $800 $800
Total income

P&L including depreciation $0 $0

Cashflow $0 $0

For entire fleet on this rotation

P&L including depreciation $0 $0
Cashflow $0 $0

Source: Prepared by author using company data.

 Scenario 1: Marine Fuel Oil, Regular Speed

Scenario 3 Scenario 4
Biofuel LNG Fuel
Regular Speed Regular Speed YEAR Z

330 300
2.39 2.75 2023 5%
2024 7%
3 3 2025 9%
21 21 2026 11%
2027 13%
2028 15%
2029 17%
2030 19%
2031 21%
2032 23%
2033 25%
2034 27%
2035 29%
2036 31%
2037 33%
2038 35%
2039 37%
2040 39%
2041 41%
2042 43%
2043 45%
$40,000,000 $55,000,000 2044 47%
2045 49%
2046 51%
2047 53%
$1,200 $1,200
Scenario 2: Marine Fuel Oil, Slow Steam

YEAR Z

2023 5%
1,800 1,800 2024 7%
2025 9%
$800 $800 2026 11%
2027 13%
2028 15%
$0 $0 2029 17%
$0 $0 2030 19%
2031 21%
2032 23%
$0 $0 2033 25%
$0 $0 2034 27%
2035 29%
2036 31%
2037 33%
2038 35%
2039 37%
2040 39%
2041 41%
2042 43%
2043 45%
2044 47%
2045 49%
2046 51%
2047 53%
ne Fuel Oil, Regular Speed

CII REQUIRED
AER/CIIrequired % Grade Vessel Operable?
(g CO2/ton - nm)

#DIV/0! #DIV/0! #DIV/0!

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#DIV/0! #DIV/0! #DIV/0!

ne Fuel Oil, Slow Steam

CII REQUIRED
AER/CIIrequired % Grade Vessel Operable?
(g CO2/ton - nm)
#DIV/0! #DIV/0! #DIV/0!
#DIV/0! #DIV/0! #DIV/0!
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#DIV/0! #DIV/0! #DIV/0!
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#DIV/0! #DIV/0! #DIV/0!
#DIV/0! #DIV/0! #DIV/0!
#DIV/0! #DIV/0! #DIV/0!
#DIV/0! #DIV/0! #DIV/0!
#DIV/0! #DIV/0! #DIV/0!
#DIV/0! #DIV/0! #DIV/0!
#DIV/0! #DIV/0! #DIV/0!
#DIV/0! #DIV/0! #DIV/0!
#DIV/0! #DIV/0! #DIV/0!
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#DIV/0! #DIV/0! #DIV/0!
#DIV/0! #DIV/0! #DIV/0!
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#DIV/0! #DIV/0! #DIV/0!
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Scenario 3: Biofuel, Regular Speed"

CII REQUIRED
YEAR Z AER/CIIrequired % Grade
(g CO2/ton - nm)

2023 5% #DIV/0! #DIV/0!

2024 7% #DIV/0! #DIV/0!
2025 9% #DIV/0! #DIV/0!
2026 11% #DIV/0! #DIV/0!
2027 13% #DIV/0! #DIV/0!
2028 15% #DIV/0! #DIV/0!
2029 17% #DIV/0! #DIV/0!
2030 19% #DIV/0! #DIV/0!
2031 21% #DIV/0! #DIV/0!
2032 23% #DIV/0! #DIV/0!
2033 25% #DIV/0! #DIV/0!
2034 27% #DIV/0! #DIV/0!
2035 29% #DIV/0! #DIV/0!
2036 31% #DIV/0! #DIV/0!
2037 33% #DIV/0! #DIV/0!
2038 35% #DIV/0! #DIV/0!
2039 37% #DIV/0! #DIV/0!
2040 39% #DIV/0! #DIV/0!
2041 41% #DIV/0! #DIV/0!
2042 43% #DIV/0! #DIV/0!
2043 45% #DIV/0! #DIV/0!
2044 47% #DIV/0! #DIV/0!
2045 49% #DIV/0! #DIV/0!
2046 51% #DIV/0! #DIV/0!
2047 53% #DIV/0! #DIV/0!

Scenario 4: LNG Fuel, Regular Speed

CII REQUIRED
YEAR Z AER/CIIrequired % Grade
(g CO2/ton - nm)
2023 5% #DIV/0! #DIV/0!
2024 7% #DIV/0! #DIV/0!
2025 9% #DIV/0! #DIV/0!
2026 11% #DIV/0! #DIV/0!
2027 13% #DIV/0! #DIV/0!
2028 15% #DIV/0! #DIV/0!
2029 17% #DIV/0! #DIV/0!
2030 19% #DIV/0! #DIV/0!
2031 21% #DIV/0! #DIV/0!
2032 23% #DIV/0! #DIV/0!
2033 25% #DIV/0! #DIV/0!
2034 27% #DIV/0! #DIV/0!
2035 29% #DIV/0! #DIV/0!
2036 31% #DIV/0! #DIV/0!
2037 33% #DIV/0! #DIV/0!
2038 35% #DIV/0! #DIV/0!
2039 37% #DIV/0! #DIV/0!
2040 39% #DIV/0! #DIV/0!
2041 41% #DIV/0! #DIV/0!
2042 43% #DIV/0! #DIV/0!
2043 45% #DIV/0! #DIV/0!
2044 47% #DIV/0! #DIV/0!
2045 49% #DIV/0! #DIV/0!
2046 51% #DIV/0! #DIV/0!
2047 53% #DIV/0! #DIV/0!
Vessel Operable?

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Vessel Operable?

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 YEARLY OPERATIONS

FUEL CONSUMPTION
10,000
(tons)

DISTANCE
60,000
(nm)

CO2 EMISSION FACTOR

REGULAR FUEL 3.151
EMISSION FACTOR

CII REQUIRED
YEAR Z
(g CO2/ton - nm)
2023 5%
2024 7%
2025 9%
2026 11%
2027 13%
2028 15%
2029 17%
2030 19%
2031 21%
2032 23%
2033 25%
2034 27%
2035 29%
2036 31%
2037 33%
2038 35%
2039 37%
2040 39%
2041 41%
2042 43%
2043 45%
2044 47%
2045 49%
2046 51%
2047 53%
Source: Prepared by author using company data.
 SHIP DESCRIPTION

DEADWEIGHT TONNAGE
100,000
(tons)

FUEL SOURCE Marine fuel oil

ANNUAL CO2 EMISSIONS & AER

ANNUAL CO2 EMISSIONS

(tons) 31,510
AER
5.3
(g CO2/ton - nm)

AER/CIIrequired % Grade Vessel Operable?

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#DIV/0! #DIV/0! #DIV/0!
#DIV/0! #DIV/0! #DIV/0!
#DIV/0! #DIV/0! #DIV/0!
#DIV/0! #DIV/0! #DIV/0!
#DIV/0! #DIV/0! #DIV/0!
#DIV/0! #DIV/0! #DIV/0!
#DIV/0! #DIV/0! #DIV/0!
#DIV/0! #DIV/0! #DIV/0!
#DIV/0! #DIV/0! #DIV/0!
#DIV/0! #DIV/0! #DIV/0!
#DIV/0! #DIV/0! #DIV/0!
#DIV/0! #DIV/0! #DIV/0!
 CII % UPPER LIMIT COMPLIANCE STATUS
GRADE (inclusive)
A 83% Compliant
B 94% Compliant
C 107% Compliant
D 119% 3 years grace period
E > 119% 1 year grace period
 Scenario 1 Scenario 2
Marine Fuel Oil Marine Fuel Oil
Regular Speed Slow Steam
$M
P&L Including Depreciation
PRX 10.7 11.6
EX1 20.1 22.3
CAGEMA 0.0 0.0

Cash Flow
PRX 15.5 16.4
EX1 22.7 24.9
CAGEMA 0.0 0.0

Slow Steam Fuel Reduction %

PRX 28.6%
EX1 49.2%
CAGEMA #DIV/0!

Scenario 1 Scenario 2
Marine Fuel Oil Marine Fuel Oil
Regular Speed Slow Steam
AER Comparison
PRX (15,000 TEU) 5.87 4.89
EX1 (6,500 TEU) 7.46 4.42
CAGEMA (2,000 TEU) 0.00 0.00

Source: Prepared by author using company data.

 Scenario 3 Scenario 4
Biofuel LNG Fuel
Regular Speed Regular Speed
$M
P&L Including Depreciation
(1.8) 6.7 PRX
8.4 5.5 EX1
0.0 0.0 CAGEMA

Cash Flow
3.0 12.7 PRX
11.0 9.1 EX1
0.0 0.0 CAGEMA

Scenario 3 Scenario 4
Biofuel LNG Fuel
Regular Speed Regular Speed
4.45 3.70
5.66 6.03
0.00 0.00
 Scenario 1 Scenario 2 Scenario 3 Scenario 4
Marine Fuel Oil Marine Fuel Oil Biofuel LNG Fuel
Regular Speed Slow Steam Regular Speed Regular Speed

ng Depreciation
64.2 81.5 (10.9) 40.1
120.8 155.8 50.4 33.0
0.0 0.0 0.0 0.0

93.0 115.1 17.9 76.1

136.4 174.0 66.0 54.6
0.0 0.0 0.0 0.0

Scenario 1 Scenario 2 Scenario 3 Scenario 4

Marine Fuel Oil Marine Fuel Oil Biofuel LNG Fuel
Regular Speed Slow Steam Regular Speed Regular Speed
100.00% 83.33% 75.85% 63.03%
100.00% 59.26% 75.85% 80.81%
100.00% #DIV/0! #DIV/0! #DIV/0!