Sulphur abatement globally in maritime shipping

In 2016, the International Maritime Organization (IMO) decided on global regulations to reduce sulphur emissions to air from maritime shipping starting 2020. The regulation implies that ships can continue to use residual fuels with a high sulphur content, such as heavy fuel oil (HFO), if they employ scrubbers to desulphurise the exhaust gases. Alternatively, they can use fuels with less than 0.5% sulphur, such as desulphurised HFO, distillates (diesel) or liquefied natural gas (LNG). The options of lighter fuels and desulphurisation entail costs, including higher energy consumption at refineries, and the present study identifies and compares compliance options as a function of ship type and operational patterns.The results indicate distillates as an attractive option for smaller vessels, while scrubbers will be an attractive option for larger vessels. For all vessels, apart from the largest fuel consumers, residual fuels desulphurised to less than 0.5% sulphur are also a competing abatement option. Moreover, we analyse the interaction between global SO_X reductions and CO₂ (and fuel consumption), and the results indicate that the higher fuel cost for distillates will motivate shippers to lower speeds, which will offset the increased CO₂ emissions at the refineries. Scrubbers, in contrast, will raise speeds and CO₂ emissions.     

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

This paper examines how the existing fleet in the shipping industry can be adapted to the new emission regulations through the two main techniques that currently exist: (a) the use of low-sulphur marine diesels; and (b) the installation of scrubbers. A method is presented here for drawing up an economic assessment of both these techniques under uncertainty. It enables the best option to be selected at any given time taking into account fuel prices (spot and futures), scrubber installation costs, the time that the vessel operates in an Emission Control Area (ECA) and the remaining useful lifetime of the vessel. The paper also considers the possibility of an unexpected change from a non-ECA navigation area to an ECA. The assessment is carried out in a manner consistent with marine diesel and crude oil spot and futures market quotes. Our results show the net present value of investing in the installation of scrubbers and investing in changing fuel types for different assumptions on how vessels are operated. We also analyse increases in fuel consumption and CO₂ emissions as a consequence of using scrubbers and how they affects the financial analysis if such incremental emissions must be paid under a CO₂ pricing mechanism.     

The costs and benefits of reducing SO2 emissions from ships in the US West Coastal waters

Potential costs and benefits of policy options for reducing offshore ship pollution are examined using a meta-analysis of studies synthesized regionally for the US West Coast. Net benefits of reducing SO₂ emissions from cargo ships in the US West Coast waters are found to range between $98 million and $284 million, annually; the benefit–cost ratio varies between 1.8 and 3.36, depending on the size of the control area and the sulfur content limit. The results show that about 21,000 tons of on-land equivalent SO₂ emissions or about 33% of SO₂ emissions from all mobile sources in California in 2005 can be reduced annually if the US West Coast exclusive economic zone is designated as an International Maritime Organization-compliant SO_x emission control area (SECA) with fuel-sulfur content not exceeding 1.5%. The analysis demonstrates that designating this area reduces more emissions than establishing a smaller zone at a lower but favorable benefit-cost ratio. Control measures that require 0.5% low-sulfur fuels reduce more SO₂ emissions, and also may have higher net benefits. Technological alternatives may achieve benefits of emissions reductions on the US West Coast across higher ranges of potential fuel prices. Combinations of fuel switching and control technology strategies provide the most cost-effective benefits from SECAs on the US West Coast and other world regions.     

Effect of a speed reduction of containerships in response to higher energy costs in Sulphur Emission Control Areas

The objective of this paper is to explore the possible consequences of the future low-sulphur fuel requirements in Sulphur Emission Control Areas (SECA) on vessel speed, from the standpoint of the container shipping industry. Rational energy use, speed reduction, and revenues are closely related in the container shipping sector because speed reductions may provide substantial energy and cost savings. The operators could consider reducing their speed in SECA in order to save on fuel that will become relatively expensive. However, to maintain a weekly frequency without adding new ships, such a behaviour implies that the required speed at sea outside the SECA area increases. This paper aims to investigate if such a difference in speed is cost-effective, and if the increase in speed outside SECA may result in an increase in CO₂ emissions of the total cycle. We propose a cost model that estimates the cost-minimising combination of speeds inside and outside SECA, and the resulting CO₂ emissions of the liner service. Applying this model to representative liner services serving North Europe, we find that differentiating speed accordingly slightly decreases total costs and increases CO₂ emissions in a similar way. The results are sensitive to the price of low-sulphur fuels, the part of the cycle in SECA and the number of ships deployed in the service.     

Assessment of carbon emission costs for air cargo transportation

This study presents a set of models that calculate carbon emissions in individual phases of flight during air cargo transportation, investigates resultant carbon footprints by aircraft type and flight route, and estimates increases in transportation costs for airlines due to carbon taxes imposed by the EU ETS. The estimated results provide useful references for airlines in aircraft assignment on different routes and in aircraft selection for new purchases. Validation of the model is conducted by simulating the potential impact of the implementation of the EU ETS on costs of air cargo transportation for six routes and six types of aircraft. Results show that the impact may be subject to various factors including unit carbon emissions per aircraft, aviation emission allowances per airline, and carbon trading prices; and that increases in costs of air cargo transportation range from 0% to 5.27% per aircraft per route. Therefore, the implementation of the EU ETS may encourage airlines to cut down their operating costs by reducing their carbon emissions, thereby ameliorating greenhouse gas pollution caused by air cargo transportation.     

Assessment of profit,cost and emissions by varying speed as a function of sea conditions and freight market

This paper assesses shipping profits, costs and emissions by speed and as a function of sea and freight market conditions. Traditionally, seagoing vessels have been designed to operate at standardized, maximum economic speeds based on hydrodynamic considerations. High fuel costs and increased environmental concerns have challenged this practice. While speed reductions may reduce costs and emissions, most studies are based on still water conditions despite these being the exceptions. In addition, shipping lines operate in a commercial market with the objective of making profit and not solely on cost reductions. Our results show that significant cost and emissions reductions can be achieved and that the maximum economic speeds based on hydrodynamic considerations even in a good freight market are lower than the design speeds.     

Liner shipping network design with emission control areas: A genetic algorithm-based approach

To curb emissions, containerized shipping lines face the traditional trade-off between cost and emissions (CO₂ and SO_x) reduction. This paper considers this element in the context of liner service design and proposes a mixed integer linear programming (MILP) model based on a multi-commodity pickup and delivery arc-flow formulation. The objective is to maximize the profit by selecting the ports to be visited, the sequence of port visit, the cargo flows between ports, as well as the number/operating speeds of vessels on each arc of the selected route. The problem also considers that Emission Control Areas (ECAs) exist in the liner network and accounts for the vessel carrying capacity. In addition to using the MILP solver of CPLEX, we develop in the paper a specific genetic algorithm (GA) based heuristic and show that it gives the possibility to reach an optimal solution when solving large size instances.     

The impact of alternative routeing and packaging scenarios on carbon and sulphate emissions in international wine distribution

There is a large body of research related to carbon footprint reduction in supply chains and logistics from a wide range of sectors; however the decarbonisation of freight transport is mostly explored from a single mode perspective and at a domestic/regional level. This paper takes into account a range of alternative transport modes, routes and methods with particular reference to UK wine imports from two regions: northern Italy and Southeast Australia. The research examines supply chain structures, costs and the environmental impact of international wine distribution to the UK. A number of options are evaluated to calculate the carbon footprint and sulphate emissions of alternative route, mode, method of carriage, and packaging combinations. The estimation of CO₂e emissions incorporates three main elements - cargo mass, distance and method of carriage; sulphate emissions are derived from actual ship routes, engine power and operational speeds. The bottling of wine either at source or close to destination is also taken into consideration. The key findings are: there are major differences between the environmental footprint of different routeing and packaging scenarios; the international shipping leg almost always has a much larger footprint than inland transport within the UK except in the hypothetical case of the rail shipments from Italy using flexitanks. With reference to sulphate, the lowest cost scenario among the sea maximizing options is also the sulphate minimising solution.     

Batteries in offshore support vessels – Pollution,climate impact and economics

This paper assesses the pros and the cons of installing batteries on offshore support vessels. These vessels are specially designed to provide services to oil and gas operations, such as anchor handling, supply and subsea operations. They have multiple engines and advanced dynamic positioning systems to ensure that they can perform their duties with high reliability at nearly any sea state. Combined with high safety requirements, this has resulted in general operational patterns with vessels running multiple combustion engines even at calm water conditions. For emissions, low engine loads yield high emissions of exhaust gases such as nitrogen oxides (NOx) and aerosols such as black carbon (BC), due to less favorable combustion conditions. The high span for these vessels between low loads and high, and their great need for potential power at short notice, motivate our examination of hybrid setups with electric: the vessel segment should be more favorable than many. We find that combining batteries with combustion engines reduces local pollution and climate impact, while the economics with current battery cost and fuel prices is good enough for new vessels, but not good enough for retrofits.     

Determinants of the property damage costs of tanker accidents

This study investigates determinants of the vessel, oil cargo spillage, and other-property damage costs of tanker accidents. Tobit estimation of a three-equation recursive model suggests that, among types of tanker accidents, fire/explosion accidents incur the largest vessel damage costs, but the smallest oil cargo spillage costs. Alternatively, grounding accidents incur the smallest vessel damage costs, but the largest oil cargo spillage costs, reflecting the difficulty of controlling oil cargo spillage subsequent to such accidents. Also, oil cargo spillage costs are lower for US flag tanker accidents. A dollar of vessel damage cost increases other-property damage cost by $0.06, whereas a dollar of oil cargo spillage increases this cost by $1.55.     

On two speed optimization problems for ships that sail in and out of emission control areas

This paper deals with two speed optimization problems for ships that sail in and out of Emission Control Areas (ECAs) with strict limits on sulfur emissions. For ships crossing in and out of ECAs, such as deep-sea vessels, one of the common options for complying with these limits is to burn heavy fuel oil (HFO) outside the ECA and switch to low-sulfur fuel such as marine gas oil (MGO) inside the ECA. As the prices of these two fuels are generally very different, so may be the speeds that the ship will sail at outside and inside the ECA. The first optimization problem examined by the paper considers an extension of the model of Ronen (1982) in which ship speeds both inside and outside the ECA are optimized. The second problem is called the ECA refraction problem, due to its conceptual similarity with the refraction problem when light travels across two different media, and also involves optimizing the point at which the ship crosses the ECA boundary. In both cases the objective of the problem is to maximize daily profit. In addition to mathematical formulations, examples and sensitivity analyses are presented for both problems.     

Evolution of the household vehicle fleet: Anticipating fleet composition, PHEV adoption and GHG emissions in Austin, Texas

In today’s world of volatile fuel prices and climate concerns, there is little study on the relationship between vehicle ownership patterns and attitudes toward vehicle cost (including fuel prices and feebates) and vehicle technologies. This work provides new data on ownership decisions and owner preferences under various scenarios, coupled with calibrated models to microsimulate Austin’s personal-fleet evolution.Opinion survey results suggest that most Austinites (63%, population-corrected share) support a feebate policy to favor more fuel efficient vehicles. Top purchase criteria are price, type/class, and fuel economy. Most (56%) respondents also indicated that they would consider purchasing a Plug-in Hybrid Electric Vehicle (PHEV) if it were to cost $6000 more than its conventional, gasoline-powered counterpart. And many respond strongly to signals on the external (health and climate) costs of a vehicle’s emissions, more strongly than they respond to information on fuel cost savings.Twenty five-year simulations of Austin’s household vehicle fleet suggest that, under all scenarios modeled, Austin’s vehicle usage levels (measured in total vehicle miles traveled or VMT) are predicted to increase overall, along with average vehicle ownership levels (both per household and per capita). Under a feebate, HEVs, PHEVs and Smart Cars are estimated to represent 25% of the fleet’s VMT by simulation year 25; this scenario is predicted to raise total regional VMT slightly (just 2.32%, by simulation year 25), relative to the trend scenario, while reducing CO₂ emissions only slightly (by 5.62%, relative to trend). Doubling the trend-case gas price to $5/gallon is simulated to reduce the year-25 vehicle use levels by 24% and CO₂ emissions by 30% (relative to trend).Two- and three-vehicle households are simulated to be the highest adopters of HEVs and PHEVs across all scenarios. The combined share of vans, pickup trucks, sport utility vehicles (SUVs), and cross-over utility vehicles (CUVs) is lowest under the feebate scenario, at 35% (versus 47% in Austin’s current household fleet). Feebate-policy receipts are forecasted to exceed rebates in each simulation year.In the longer term, gas price dynamics, tax incentives, feebates and purchase prices along with new technologies, government-industry partnerships, and more accurate information on range and recharging times (which increase customer confidence in EV technologies) should have added effects on energy dependence and greenhouse gas emissions.     

How to road price in a world with electric vehicles and government budget constraints

In this paper we examine what characterizes second-best road prices targeting external costs from driving electric (EV) and conventional (ICEV) vehicles when there are distortionary labor taxes and binding government budget constraints. Further, we examine how this second-best pricing fits with government set goals of reducing CO₂ emissions. The paper further develops an analytical framework for assessing first- and second-best road prices on vehicle kilometers, extending it to include EVs and externalities that vary geographically and by time of day. We find that optimal road prices largely vary with external cost, but are also significantly affected by the interactions with the rest of the fiscal system. Not surprisingly, the highest road prices should be for ICEVs in large cities during peak hours due to high external costs. More surprisingly, we find that the road price for ICEVs in rural areas should be lower than that for EVs due to large fiscal interaction effects. These road prices give large welfare gains, but they lead to no reduction in carbon emissions when applying the currently recommended social cost of carbon.     

Assessing greenhouse gas emissions from port vessel operations at the Port of Incheon

This paper measures greenhouse gas emissions from port vessel operations by considering the case of Korea’s Port of Incheon. It provides estimates of greenhouse gas emissions based on the type and the movement of a vessel from the moment of its arrival, to its docking, cargo handling, and departure. Taking a bottom-up approach based on individual vessels’ characteristics and using data on vessels processed by the port in 2012 estimate emissions. The results indicate that the level of emissions is five times higher than that estimated through the top-down approach. Among various types of vessels, international car ferries are the heaviest emitters, followed by full container vessels and car carriers. A vessel’s passage through lock gates and maneuver to approach the dock accounts for 96% of its emissions. Docking for cargo handling shows the lowest level of GHG emissions.     

Maritime routing and speed optimization with emission control areas

Strict limits on the maximum sulphur content in fuel used by ships have recently been imposed in some Emission Control Areas (ECAs). In order to comply with these regulations many ship operators will switch to more expensive low-sulphur fuel when sailing inside ECAs. Since they are concerned about minimizing their costs, it is likely that speed and routing decisions will change because of this. In this paper, we develop an optimization model to be applied by ship operators for determining sailing paths and speeds that minimize operating costs for a ship along a given sequence of ports. We perform a computational study on a number of realistic shipping routes in order to evaluate possible impacts on sailing paths and speeds, and hence fuel consumption and costs, from the ECA regulations. Moreover, the aim is to examine the implications for the society with regards to environmental effects. Comparisons of cases show that a likely effect of the regulations is that ship operators will often choose to sail longer distances to avoid sailing time within ECAs. Another effect is that they will sail at lower speeds within and higher speeds outside the ECAs in order to use less of the more expensive fuel. On some shipping routes, this might give a considerable increase in the total amount of fuel consumed and the CO₂ emissions.     

The effectiveness and costs of speed reductions on emissions from international shipping

Greenhouse gas emissions from international shipping are an increasing concern. The paper evaluates whether vessel speed reduction can be a potentially cost-effective CO₂ mitigation option for ships calling on US ports. By applying a profit-maximizing equation to estimate route-specific, economically-efficient speeds, we explore policy impacts of a fuel tax and a speed reduction mandate on CO₂ emissions. The profit-maximizing function incorporates opportunity costs associated with speed reduction that go unobserved in more traditional marginal abatement cost analyses. We find that a fuel tax of about $150/ton fuel will lead to average speed-related CO₂ reductions of about 20–30%. Moreover, a speed reduction mandate targeted to achieve 20% CO₂ reduction in the container fleet costs between $30 and $200 per ton CO₂ abated, depending on how the fleet responds to a speed reduction mandate.     

An epsilon-optimal algorithm considering greenhouse gas emissions for the management of a ship’s bunker fuel

This paper provides an algorithm to minimize the fixed ordering, purchase, and inventory-carrying costs associated with bunker fuel together with ship time costs; and environmental costs associated with greenhouse gas emissions. It determines the optimum ship speed, bunkering ports, and amounts of bunker fuel for a given ship’s route. To solve the problem, we use an epsilon-optimal algorithm by deriving a property. The algorithm is illustrated by applying it to typical sample data obtained and the effects of bunker prices, carbon taxes, and ship time costs on the ship speed are analyzed. The results indicate that the ship speed and CO₂ emissions are highly sensitive to the factors considered.     

Short Sea Shipping’s Green Label at Risk

Abstract

Shifting cargo from land‐based modes to maritime transport has been a prioritized policy in many policy papers to make transport more environmental friendly. Traditional calculations of emissions per transport capacity unit have supported this. However, maritime transport may stand to loose its good environmental reputation in comparison to road transport due to (1) the sluggish processes in maritime environmental policies and the low ambition level of current regulations, (2) the much higher focus on improving the environmental efficiency of the road haulage industry, (3) the much longer economic life of vessels compared to trucks, and (4) focus on faster vessels that increase the average fuel consumption of the sea transport alternative. Through a realistic case study, the energy efficiency and emissions of alternative multimodal transport chains is presented to illustrate these points.     

Measuring foregone output under industry emission reduction target in the transportation sector

Numerous countries have implemented or are considering a range of policies to lower emissions from transportation. An analysis of the impacts of environmental regulation is a crucial issue, which has not been properly highlighted in the transportation literature, particularly in terms of the foregone output by such regulation. This study develops a novel DEA model that measures the foregone output when the industry emissions target is imposed. This model reflects the real regulatory process more appropriately than other models in that the authority in charge sets the emission reduction target first, and the transport operators respond to it. In addition, the model can test the industrywide impacts over a wide range of emission target values, which can help policy makers determine the optimal emission target. Finally, the proposed model was applied to the port industry in Korea. The results suggest that Korean ports can reduce their emissions by a maximum of 239,850 tons of CO₂, which accounts for 13% of the total emissions in 2010. The 13% reduction in emission, however, would result in $ 91,109,000 of foregone cargo traffic to the Korean economy. In addition, the foregone cargo traffic increases at much faster rate than the emission reduction rate. For example, the shadow price of emission differs by 2.25 times between the most moderate and strictest emission targets. This suggests that the government needs to impose moderate emission targets at the initial stages if it decides to minimize the regulatory impacts on the industry.     

Modal split in offshore supply network under the objective of emissions minimization

We study modal split under the objective of emissions minimization in the transportation of cargo from centralized vendors in the oil and gas industry to decentralized supply bases on the Norwegian coast. The supply network includes direct road transport and a sea route along the coast. To gain insight into modal split decisions between road and sea transport from the shipper’s perspective multi-period mixed integer optimization models are formulated. Particularly the models give possibilities to examine how weekly demand patterns at supply bases, cargo commitments to sea transport, storage possibilities at supply bases, and shipper’s responsibility for a certain share of vessel capacity may effect the emissions and the modal split. Experiments on real data from an oil and gas company operating offshore show that the size of the share of vessel capacity and the possibility for storage at supply bases are the major determinants for a larger shift to environmentally friendly sea transport. The models can be used as means for making decisions regarding how a shipper can commit to sea transport to achieve less emissions.