Cost-Benefit Evaluation on Promising Strategies in Compliance with Low Sulfur Policy of IMO

Abstract

According to the amendment of the “International Convention for the Marine Prevention of Pollution from Ships” (MARPOL), Annex VI stating that the sulfur content in marine fuel oil cannot exceed 0.5 wt. % came into effect in 2020. This study uses cost-benefit analysis method to evaluate the feasibility and implementation benefits of those strategies. A container ship serving on the ship route is selected as a representative. It is found that the very low-sulfur fuel oil (VLSFO) strategy has a higher total incremental cost than the scrubber strategy in the first 4.14 years, but then, the trend is reversed. After this container ship is equipped with a scrubber, the pollutant emission reduction is 5% higher than the condition of VLSFO only in the first year. The SOx and PM emission reduction rates of VLSFO strategy are higher than that of the scrubber strategy by 9% and 25%, respectively, within five years. In addition, during 3.3 years after the scrubber is installed, the cost-benefit ratio is higher than that of the VLSFO strategy. Hence, the scrubber for the ocean route container ships is merely a short-term compliance strategy within 3.3 years. In contrast, the low sulfur fuel oil strategy that less pollutant is emitted is a compliance strategy for periods longer than 3.3 years.

Comparison Analysis of Options to Comply with IMO 2020 Sulphur Cap Regarding Environmental and Economic Aspect

“…The cost of retrofitting the scrubber will be 327 USD/kW [13]. The price for retrofitting the scrubber is lower for the larger engine.…”

“…By installing a scrubber, the number of TEUs on board the ship will also decrease due to scrubber's component which may be installed on the ship. It will decrease about 1% of the total TEU on board the ship [13]. For the case study, the price of the IFO/HFO is around 478.5 USD/MT [10].…”

Determination of the LNG Bunkering Optimization Method for Ports Based on Geometric Aggregation Score Calculation

“…Wu and Lin [9] evaluated the cost-benefit analysis method in terms of the feasibility and implementation benefits of these strategies, that is, the use of very low-sulfur fuel oil and scrubber for stricter environmental regulations. A container ship serving the shipping route was selected as a representative example.…”

Analisis Pengaruh Waktu Dan Jarak Perjalanan Kapal Terhadap Biaya Low Sulphur Surcharge

“…The study result claims that international laws related to emissions do not affect the economy at the port. The use of low sulphur fuel in compliance with the IMO policy also was proven as an appropriate option for long term use, according to a costbenefit analysis conducted by Wu and Lin [13]. However, this study has not yet considered parameters such as shipping routes, ship types and age.…”

“…Rahm [11] concluded that promoting the lowsulphur regulation will be a company competitive advantage. At the same time, Wu and Lin found [13] that low sulphur usage will benefit the company in the long term with cost consideration. Sys et al [12] also ensured that the port economy would not suffer because of this new, more expensive, low sulphur fuel.…”