Adapting the shipping sector to stricter emissions regulations: Fuel switching or installing a scrubber?

Abadie, Luis M.; Goicoechea, Nestor; Galarraga, Ibon

doi:10.1016/j.trd.2017.09.017

Cited by 92 publications

(52 citation statements)

References 23 publications

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“…All scenarios confirm the higher abatement efficiency of the scrubber system on SO x emission. In terms of CO 2 emission, the scrubber system has a higher value comparing with the fuel-switching option due to more energy consumption in the scrubber system, which is consistent with the result acquired by Abadie et al [26]. The differences of emissions and total daily costs for two compliance options are listed (∆ Daily cost, ∆ CO 2 , and ∆ SO x ), which shows the variations between the fuel-switching and scrubber system.…”

Section: Numerical Resultssupporting

confidence: 88%

“…Actually, there are intensive studies on the determining factors of investment decisions under sulfur caps, and most of them argue that the distance spending within SECAs and oil price difference are critical [26,45,52,53]. However, the case selected in this study is a long-distance liner route where the SECA distance only accounts for 4.4% of the whole service.…”

Section: Numerical Resultsmentioning

confidence: 99%

“…In terms of SO x control options, they argued that fuel-switching and segregated tank design are better than the others. Abadie et al [26] discussed the economic assessment of fuel-switching and scrubber installation in existing vessels under uncertainty. They also considered the possibility of an unexpected change from a non-ECA sea to an ECA navigation area.…”

Section: Emission Abatement Methods From Shipsmentioning

confidence: 99%

“…They conducted a stochastic linear programming to minimize operator's total costs by determining the fleet-mix and the capacity. With the enforcement of the sulfur limit regulation, many scholars studied its impacts from the perspective of operators, such as Schinas and Stefanakos [25] and Abadie et al [26]. In addition, Chang et al [27] explored the impacts of ECAs on port efficiency, using two-stage approaches to examine whether sulfur and nitrogen regulations harm the efficiency of ports.…”

Section: Impacts Of Seca On the Shipping Industrymentioning

confidence: 99%

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Impacts of the Increasingly Strict Sulfur Limit on Compliance Option Choices: The Case Study of Chinese SECA

Fan

2019

Sustainability

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The International Maritime Organization (IMO) has proposed several environmental regulations on controlling SOx and NOx emissions from ships in coastal areas. Under the framework of IMO, some areas have established strict emission control areas (ECAs) to reduce emissions, which mainly contain Europe and North America. To further strengthen the control and supervision over air pollutants from shipping activities, the Sulfur cap regulation of 0.5% by mass will come into effect on 1 January, 2020 globally, when all the sailing vessels on the high sea should use fuels with sulfur content less than 0.5%. This limit is stricter for the global recognized sulfur emission control areas (SECAs), where it was 0.1% since 1 January 2015. However, Chinese local SECA lags behind the globally recognized SECAs, where the 0.5% Sulfur cap was implemented from 2016 and it has to be strengthened along with the global sulfur cap 2020. These increasingly stringent emission regulations have huge effects on shipping operators. The current study discusses the potential impacts of the stricter sulfur cap on operators’ compliance option choices, where fuel-switching and scrubber system are analyzed under different sulfur limits. Meanwhile, the slow steaming practice is incorporated into the fuel-switching option by considering speed differentiation in different sulfur limit areas. This study develops a cost-minimizing model using NPV (net present value) method. It analyzes the optimal option within vessels’ lifespan considering the tradeoff between the initial investment and future operational cost for newbuilding vessels based on a case study. In addition, emissions of CO2 and SOx are compared under different compliance options in different sulfur cap scenarios. Our results find that the scrubber system is a suitable option to comply with the 0.5% global sulfur limit, and a higher efficiency of sulfur abatement can be attained by the scrubber system option. However, it emits more carbon emissions due to higher energy consumption used by the scrubber system. In addition, the effects of additional vessels deployed in the cycle on the compliance choices are also demonstrated in the analysis.

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Section: Numerical Resultssupporting

confidence: 88%

Section: Numerical Resultsmentioning

confidence: 99%

Section: Emission Abatement Methods From Shipsmentioning

confidence: 99%

Section: Impacts Of Seca On the Shipping Industrymentioning

confidence: 99%

See 2 more Smart Citations

Impacts of the Increasingly Strict Sulfur Limit on Compliance Option Choices: The Case Study of Chinese SECA

Fan

2019

Sustainability

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“…While all these alternatives would allow shipowners to operate within SECA waters, they were characterized by very different financial consequences. In addition to the required extensive additional capital costs for retrofitting the vessels, immature technology and price uncertainty regarding the latter two approaches (i.e., scrubbers and LNG) made these solutions unattractive for a number of shipping companies [23,24]. Distillates did not require capital investments, but their higher price could rapidly become a heavy burden for ship operators [7].…”

Section: Seca Regulation and Its Implicationsmentioning

confidence: 99%

Slow Steaming as Part of SECA Compliance Strategies among RoRo and RoPax Shipping Companies

2019

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Many geographically peripheral member states of the EU are critically dependent on short sea Roll-on/Roll-off (RoRo) and mixed freight–passenger (RoPax) shipping services for intra-European trade. The implementation of the Sulfur Emission Control Area (SECA) regulation was expected to raise the operating cost for RoRo and RoPax shipping, and slow steaming was proposed as an immediate solution to save the increased cost. Previous research has investigated the issue of slow steaming and SECA using a quantitative approach. However, the reaction of the RoRo and RoPax shipping firms toward slow steaming as a mitigating factor in the face of expected additional SECA compliance costs using qualitative methodology has not been explored yet. In addition, the knowledge regarding the impact of slow steaming on the competitiveness of short sea RoRo and RoPax with respect to service quality is limited. This article has addressed these issues through the analysis of multiple cases focusing on RoRo and RoPax firms operating in the North and Baltic Seas. Overall, our findings suggest that the 0.1% SECA regulation of 2015 requiring the use of higher-priced MGO has not caused slow steaming in the RoRo and RoPax segments to a large extent. The increased bunker prices are partially transferred to the customers via increased Bunker Adjustment Factor and partly borne by the shipowners. We have found that out of 11 case firms in our study only one RoRo and one RoPax firm have reduced vessel speeds to compensate for the additional SECA compliance costs. We conclude that for RoPax and RoRo segment bunker prices, rigorous competition and, most important, different service quality requirements have significantly restricted the potential implementation of slow steaming.

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Operational Greenhouse Gas Emissions of Air, Rail, Road, and Sea Transport Modes in Life Cycle Perspective

Bilgili

2023

Energy, Environment, and Sustainability

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Adapting the shipping sector to stricter emissions regulations: Fuel switching or installing a scrubber?

Cited by 92 publications

References 23 publications

Impacts of the Increasingly Strict Sulfur Limit on Compliance Option Choices: The Case Study of Chinese SECA

Impacts of the Increasingly Strict Sulfur Limit on Compliance Option Choices: The Case Study of Chinese SECA

Slow Steaming as Part of SECA Compliance Strategies among RoRo and RoPax Shipping Companies

Operational Greenhouse Gas Emissions of Air, Rail, Road, and Sea Transport Modes in Life Cycle Perspective

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