Modelling modal choice effects of regulation on low-sulphur marine fuels in Northern Europe

Holmgren, Johan; Nikopoulou, Zoi; Ramstedt, Linda; Woxenius, Johan

doi:10.1016/j.trd.2013.12.009

“…It is not just a coincidence that the establishment of an European SECA has been closely followed by the scientific community in recent years. Ship-owners and policy-makers have commissioned research reports to evaluate the SECA's impact on short-sea shipping costs (Holmgren et al, 2014). Notwithstanding extensive research on the subject, there is not a total agreement about what the impact has been of the stricter limits of 0.1% sulphur content in marine fuels within SECAs after 1 January 2015 (Holmgren et al, 2014).…”

Section: Case Selectionmentioning

confidence: 99%

“…Ship-owners and policy-makers have commissioned research reports to evaluate the SECA's impact on short-sea shipping costs (Holmgren et al, 2014). Notwithstanding extensive research on the subject, there is not a total agreement about what the impact has been of the stricter limits of 0.1% sulphur content in marine fuels within SECAs after 1 January 2015 (Holmgren et al, 2014). The reason is some research focuses on certain routes, while fuel prices vary greatly over time (Holmgren et al, 2014).…”

Section: Case Selectionmentioning

confidence: 99%

“…The reason is some research focuses on certain routes, while fuel prices vary greatly over time (Holmgren et al, 2014). Studies after 1 January 2015, conclude that compliance costs will likely have an impact on certain routes, particularly those where land routes offer a clear price advantage (Holmgren et al, 2014). For example, the Scandinavian paper-industry will likely suffer from the rising costs associated with compliance (Hämäläinen, 2015).…”

Section: Case Selectionmentioning

confidence: 99%

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Drivers for environmental technologies selection in the shipping industry: a case study of the North European Sulphur Emission Control Area

Hermann

¹

2017

IJETM

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Abstract:This study tackles the question: How do new air pollution regulations interact with other eco-innovation drivers in the adoption of environmental technologies in the shipping industry? In the North Sea, Baltic Sea, and the English Channel, short sea shipping is subject to strict requirements on sulphur emissions by the European Union and the International Maritime Organization after the creation of a Sulphur Emission Control Area (SECA). The creation of this SECA creates a critical case for analyzing the interactions of the regulations with technological pull, market demand, and green business strategies. The study found that a globalized industrial sector, such as shipping, tends to oppose regional regulations. These regulations benefit from market conditions which slightly push the shipping companies to embrace environmental technologies when operational costs increase due to expenses such as increasing fuel prices. Meanwhile, voluntary initiatives like participating in eco-labelling schemes can motivate eco-innovations, especially cleaner-processes, as shipping firms need to increase fuel efficiency to reduce high operational costs within SECA sulphur limits. The research contributes to the ongoing debate about eco-innovation characteristics in different industrial sectors, but more specifically, it moves forward the proposition of dynamic interactions between regulation, technology, business and markets, which modify the dominant focus on market pull and technological push. Keywords:Sulphur; shipping industry; eco-innovation; environmental technologies; environmental regulation; MARPOL Authors Pre-print version, Reference to this paper should be made as follows: Hermann, R.R. 2017. 'Drivers for environmental technologies selection in the shipping industry: A case study of the North European Sulphur Emission Control Area '. Int. J. Environmental Technology and Management. 20 (3/4):139-162. Biographical note:Roberto Rivas Hermann holds a Ph.D. in Planning and Development from Aalborg University, Denmark. He is currently a postdoctoral fellow in the Department of Innovation and Entrepreneurship at Nord University Business School, Nord University, Norway. Roberto's work has focused on eco- R.R.Hermanninnovation and eco-entrepreneurship with emphasis on inter-organizational collaboration mechanisms, co-creation processes and the governance aspects of environmental and natural resource management.

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“…Notwithstanding extensive research on the subject, there is not a total agreement about what the impact has been of the stricter limits of 0.1% sulphur content in marine fuels within SECAs after 1 January 2015 (Holmgren et al, 2014). The reason is some research focuses on certain routes, while fuel prices vary greatly over time (Holmgren et al, 2014). Studies after 1 January 2015, conclude that compliance costs will likely have an impact on certain routes, particularly those where land routes offer a clear price advantage (Holmgren et al, 2014).…”

Section: Case Selectionmentioning

confidence: 99%

Drivers for environmental technologies selection in the shipping industry: a case study of the North European Sulphur Emission Control Area

Hermann

¹

2017

IJETM

View full text Add to dashboard Cite

Abstract:This study tackles the question: How do new air pollution regulations interact with other eco-innovation drivers in the adoption of environmental technologies in the shipping industry? In the North Sea, Baltic Sea, and the English Channel, short sea shipping is subject to strict requirements on sulphur emissions by the European Union and the International Maritime Organization after the creation of a Sulphur Emission Control Area (SECA). The creation of this SECA creates a critical case for analyzing the interactions of the regulations with technological pull, market demand, and green business strategies. The study found that a globalized industrial sector, such as shipping, tends to oppose regional regulations. These regulations benefit from market conditions which slightly push the shipping companies to embrace environmental technologies when operational costs increase due to expenses such as increasing fuel prices. Meanwhile, voluntary initiatives like participating in eco-labelling schemes can motivate eco-innovations, especially cleaner-processes, as shipping firms need to increase fuel efficiency to reduce high operational costs within SECA sulphur limits. The research contributes to the ongoing debate about eco-innovation characteristics in different industrial sectors, but more specifically, it moves forward the proposition of dynamic interactions between regulation, technology, business and markets, which modify the dominant focus on market pull and technological push. Keywords:Sulphur; shipping industry; eco-innovation; environmental technologies; environmental regulation; MARPOL Authors Pre-print version, Reference to this paper should be made as follows: Hermann, R.R. 2017. 'Drivers for environmental technologies selection in the shipping industry: A case study of the North European Sulphur Emission Control Area '. Int. J. Environmental Technology and Management. 20 (3/4):139-162. Biographical note:Roberto Rivas Hermann holds a Ph.D. in Planning and Development from Aalborg University, Denmark. He is currently a postdoctoral fellow in the Department of Innovation and Entrepreneurship at Nord University Business School, Nord University, Norway. Roberto's work has focused on eco- R.R.Hermanninnovation and eco-entrepreneurship with emphasis on inter-organizational collaboration mechanisms, co-creation processes and the governance aspects of environmental and natural resource management.

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“…With the emerging of ECAs, more studies have been conducted related to emission modelling and possible modal shifts as well as investigations of alternatives for certain markets (Panagakos et al 2014;Holmgren et al 2014;Chang et al 2014). For instance Panagakos et al (2014) conclude that possible stricter ECA sulphur limits on the Mediterranean Sea might lead to a modal shift towards the land route.…”

Section: Introductionmentioning

confidence: 99%

Low emission engine technologies for future tier 3 legislations - options and case studies

Wik

¹

,

Niemi

²

2016

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Marine emission legislation such as the current IMO Tier II and upcoming IMO Tier III requirements within the revised Marpol Annex VI have been major drivers for performance development of marine engines during the latest years. These requirements have triggered a vast amount of research activity at the engine OEM's in order to identify and develop the best possible technologies for fulfilling the requirements. A main objective of this research has been to identify the various options available for reducing engine SOx and NOx emissions and to clarify the main criteria engine manufacturers consider to determine the optimum technology. Another objective has been to investigate how ship-owners and operators within the various marine segments are impacted by the new emissions requirements and what key factors they need to consider when identifying the optimum engine technology. Case studies conclude that the optimum solution can vary depending on the vessel application, operating time inside ECAs, as well as prices for fuels and reduction agents. In new-building cases, gas operated engines without after-treatment systems show a strong value proposition as an alternative to liquid fuel engines that require after-treatment solutions -especially for short-haul shipping applications where tighter emission legislations are enforced to a larger extent. Overall, 2-stage turbo charging, LNG, and SCR technologies are concluded to be the most feasible technologies. Generally, lower operating costs can compensate higher capital expenditures meaning that the owner should carefully evaluate the total cost of ownership of the various alternatives, and not consider only the initial capital expenditure. The choice of best technology option depends on a variety of issues which can change over time -such as the operation profile and route of the vessel and commodity prices. Consequently the ship-owner should evaluate the alternative technologies for a wide range of possible scenarios to find a flexible solution that minimizes exposure to risks related to changing boundary conditions. With this research, the reasons why certain emission reduction technologies are preferred to others both from OEM's and ship-owner's point of view are quantified and the most feasible technologies for meeting the requirements are identified.

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Modelling modal choice effects of regulation on low-sulphur marine fuels in Northern Europe

Cited by 50 publications

References 21 publications

Drivers for environmental technologies selection in the shipping industry: a case study of the North European Sulphur Emission Control Area

Drivers for environmental technologies selection in the shipping industry: a case study of the North European Sulphur Emission Control Area

Drivers for environmental technologies selection in the shipping industry: a case study of the North European Sulphur Emission Control Area

Low emission engine technologies for future tier 3 legislations - options and case studies

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