The desulphurisation of shipping: Past,present and the future under a global cap

As from January 2020, the International Maritime Organization (IMO) is implementing a global 0.5% limit on the sulphur content of fuel, commonly known as the global sulphur cap. This limit is the latest policy in the efforts to reduce sulphur emissions from shipping, following the designation of emission control areas (ECAs) and other regional regulations. In this paper, a literature review is conducted of academic studies that have dealt with issues relating to the reduction of maritime sulphur emissions. Various recurring research themes are identified, spanning the areas of operations research, maritime economics and transport policy. The effects and implications of available compliance options are then analyzed from the perspectives of ship operators, shippers and consumers. Using lessons learned from the enforcement of ECA regulations, this is followed by an appraisal of various potential issues related to the enforcement of these new global regulations. It is found that a homogeneous enforcement regime is required to ensure a level playing field amongst ship operators and that the global sulphur cap may lead to serious market distortion, due to the potential short term rise of fuel prices. The paper concludes with a set of recommendations for future research on sulphur emissions from shipping in the aftermath of the global cap and, looking forward, to its relationship to the IMO strategy on the reduction of greenhouse gas (GHG) shipping emissions.     

The fleet renewal problem with regional emission limitations: Case study from Roll-on/Roll-off shipping

In this paper, the maritime fleet renewal problem (MFRP) is extended to include regional limitations in the form of emission control areas. The motivation for including this aspect is that strengthening of emission regulations in such areas is expected to be challenging for deep sea shipping in the years to come. In the proposed model, various means to cope with these stricter emission regulations are evaluated for new vessels, and the possibility of upgrading existing vessels with new emission reduction technology is introduced. We consider future fuel prices to be important for the problem, and have chosen to treat them as uncertain, and thus, a stochastic programming model is chosen. A fleet renewal problem faced by the liner shipping operator Wallenius Wilhelmsen Logistics, concerning whether to use low sulphur fuel or have an exhaust gas scrubber system installed to comply with sulphur regulation in emission control areas from 2015, is used as a case study. Furthermore, tests show that the savings from including the aspect of emission control areas in the MFRP are substantial.     

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.     

Modelling emission control taxes in port areas and port privatization levels in port competition and co-operation sub-games

Using a game theory approach, this paper analyses a situation in which the government imposes a certain emission tax on vessels and port operations for emission control in port areas. Two ports are considered: a purely private port and a landlord (partial public) port. These two ports are in Cournot or Bertrand competition or cooperation with differentiated service. Our model outcomes lead to the following conclusions. First, the optimal private level of port 2 under Cournot and Bertrand competitions varies between fully private and highly public concerned port, while government will prefer a highly public concerned or close to highly public concerned port in the cooperation scenario. Second, government will have to make more and stricter efforts to enhance environmental protection in the situation of port cooperation (monopoly) than in the case of inter-port competition, and all the optimal emission tax should be always lower than the marginal emission damage. Third, port privatization has a non-monotonous effect on ports’ environmental damage in the inter-port competition scenarios and a monotonous decreasing effect in the cooperation scenario. Fourth, the total emission tax revenue is always higher than the overall environmental damage in the cooperative scenario, and it may or may not be able to cover the whole environment damage in Cournot and Bertrand competitions. Finally, the government may face a trade-off among environmental protection, maximizing social welfare, satisfying individual motivation, when considering port cooperation (monopoly).     

Increased energy efficiency in short sea shipping through decreased time in port

According to a range of assessments, there exists a large cost-effective potential to increase energy efficiency in shipping through reduced speed at sea enabled by shorter time in port. This means that the energy needed can be reduced whilst maintaining the same transport service. However, the fact that a large cost-effective potential has been identified that is not being harnessed by decision-makers in practice suggests that there is more to this potential to understand. In this paper, the possibilities for increasing energy efficiency by reducing waiting time in port are explored and problematised through a case study of a short sea bulk shipping company transporting dry bulk goods mainly in the North and Baltic seas. Operational data from two ships in the company’s fleet for one year showed that the ships spent more than 40% of their time in ports and that half of the time in port was not productive. The two most important reasons for the large share of unproductive time were that ports were closed on nights and weekends and that ships arrived too early before the stevedores were ready to load or unload the cargo. Reducing all of the unproductive time may be difficult, but the results also show that even a conservative estimate of one to four hours of reduced time per port call would lead to a reduction in energy use of 2–8%. From in-depth interviews with employees of the shipping company, ports and ship agencies, a complex picture is painted when attempting to understand how this potential arises. Aspects such as a lack of effective ship-shore-port communication, little time for ship operators, an absence of means for accurately predicting energy use of voyages as a function of speed, perceived risk of arriving too late, and relationships with third-party technical management may all play a role.     

Sailing into a dilemma: An economic and legal analysis of an EU trading scheme for maritime emissions

On the basis of a joint economic and legal analysis, we evaluate the effects of a “regional” (European) emission trading scheme aiming at reducing emissions of international shipping. The focus lies on the question which share of emissions from maritime transport activities to and from the EU can and should be included in such a system. Our findings suggest that the attempt to implement an EU maritime ETS runs into a dilemma. It is not possible to design a system that achieves emission reductions in a cost efficient manner and is compatible with international law.     

External costs from vessel emissions at port: a review of the methodological and empirical state of the art†

The accurate calculation of external costs from vessel emissions and shipping (as it happens with transport) strongly depends on parameters such as location, the time of the day and vessel operative. Thus, the use of a full bottom-up approach and granular traffic details is suggested. The latter may represent a substantial improvement in the resolution of shipping activity, energy demand, emissions and cost data being the latter essential for better regulations. The revised work identifies the Impact Pathway Approach (IPA) as the best-practice bottom-up methodology for calculating site-specific external costs derived from shipping air emissions. It has been widely adopted, among others, over major European studies (CAFE, BeTa, NEEDS and HEATCO). Also, it shows that due to costly and complex requirements of creating a shipping and harbour-specific bottom-up approach, external cost calculation based on tonne per euro factors obtained from European Studies (top-down approach) has been widely accepted. Moreover, methodological improvements and the possible achievement of refined estimations (IPA) dedicated to ports and shipping are strongly suggested, as these may improve information quality used for environmental policy and measures that contribute to the internalisation of externality costs.     

Have Emission Control Areas (ECAs) harmed port efficiency in Europe?

Ports in the European Union and North America have enforced environmental regulations on controlling SO_x and NOx emissions from ships in their coastal areas known as Emission Control Areas (ECAs). This study uses two-stage approaches to examine whether ECA regulations impact the efficiency of ports operating in such areas. First, port efficiencies are estimated using non-radial slacks-based measure (SBM) Data Envelopment Analysis (DEA) models. The efficiency scores estimated by the SBM DEA models are then regressed on explanatory variables, including the ECA factor, and macroeconomic indicators using bootstrapped truncated regression (BTR) models. Panel data is collected on countries in EU ECAs and non-ECAs regarding such input variables as capital and labor, with cargo as an output variable. The results indicate that ECA regulations can harm port efficiency, reflecting concerns of policy-makers and industrial managers: the average efficiency loss from an ECA designation amounts to 0.058–0.066 on a scale of 0–1, accounting for a 15–18% loss from ECA ports’ average efficiency scores.     

Strategic responses to institutional forces pressuring sustainability practice adoption: Case-based evidence from inland port operations

This article investigates strategic responses of inland ports to institutional forces pressuring their adoption of sustainability practices. We postulate that even though inland port operators strive for economic viability, there are growing pressures from various stakeholders for continuous enhancement of their environmental and social sustainability practices. We apply institutional theory to classify the effects of these forces based on five institutional antecedents – cause, constituents, content, control, and context – and further expand our theoretical framework with resource dependence tenets to discuss the spectrum of strategic responses available to inland ports to deal with institutional forces. We examine our theoretical arguments with empirical evidence collected from four inland ports using a case study-based approach. We conclude that while inland ports have a strong disposition towards social sustainability, economic considerations are still most emphasized, and environmental issues are mostly regarded in compliance with the legally mandated minimum. The most important sources of institutional pressure are identified as cause, constituents, and control. In a further step, we present evidence of the inland ports’ potential strategic responses. The study also provides insights for managers and policy makers on strategic options as appropriate organizational responses to proliferating institutional pressures for sustainability practices adoption.     

Efficiency evaluation and PM emission reallocation of China ports based on improved DEA models

The emission of particulate matter (PM) and other atmospheric pollutants in port operations and shipping have caused a huge negative impact on the environment. Consequently, how to evaluate the environmental efficiency of ports and put forward corresponding countermeasures on this basis is becoming a more important issue than ever before from the perspectives of the government, academia, and society. We construct three data envelopment analysis (DEA) models to evaluate the environmental efficiency of ports under the circumstances of environmental control, non-environmental control and PM emission through inter-ports cooperation. The innovation of the DEA models constructed in this paper lies in: (1) Setting environmental control parameters to uniformly manipulate the situations of environmental control and non-environmental control, etc.; (2) Allowing non-equal proportional change of input index, expected output and non-expected output index; (3) Setting preference coefficients for ports to admit favorable decisions; (4) Providing a distance formula of expected output for PM emission reallocation. Further, data from 11 major ports in China are collected to compare the expected output under different PM emission standards assuming the situation of environmental control and non-environmental control, port cooperation, and non-cooperative sewage discharge. The empirical results show that: (1) Ports in the eastern China (Shanghai, Ningbo, and Nanjing) have higher port efficiency; (2) Port cooperation can improve the overall expected output but it will lose its edge with the improvement of PM emission standards. (3) Ports follow the same trend of output loss regardless of favorable decisions. In the end, the author makes a summary, puts forward relevant policy suggestions and makes the recommendation for future research.     

The multi-port berth allocation problem with speed optimization and emission considerations

The container shipping industry faces many interrelated challenges and opportunities, as its role in the global trading system has become increasingly important over the last decades. On the one side, collaboration between port terminals and shipping liners can lead to costs savings and help achieve a sustainable supply chain, and on the other side, the optimization of operations and sailing times leads to reductions in bunker consumption and, thus, to fuel cost and air emissions reductions. To that effect, there is an increasing need to address the integration opportunities and environmental issues related to container shipping through optimization. This paper focuses on the well known Berth Allocation Problem (BAP), an optimization problem assigning berthing times and positions to vessels in container terminals. We introduce a novel mathematical formulation that extends the classical BAP to cover multiple ports in a shipping network under the assumption of strong cooperation between shipping lines and terminals. Speed is optimized on all sailing legs between ports, demonstrating the effect of speed optimization in reducing the total time of the operation, as well as total fuel consumption and emissions. Furthermore, the model implementation shows that an accurate speed discretization can result in far better economic and environmental results.     

Effects of regulation-driven green innovations on short sea shipping's environmental and economic performance

Despite its pivotal role in European trade, today’s short sea shipping (SSS) industry faces the dual challenge of lessening its environmental footprint while improving its economic performance. To reduce the pollution caused by their operations, SSS companies are required to comply with increasingly stringent environmental regulations enacted by global and regional authorities such as the European Union and the International Maritime Organization. However, the companies tend to regard those regulations as imposing an additional burden of cost that compromises their capacity to enhance their economic performance. This paper examines the impact of external institutional driver namely regulatory pressure on the adoption of green innovations in SSS and in turn, the impact of those innovations on the environmental and economic performance of SSS companies. To investigate the hypothesised relationships of those constructs, a structural equation model was developed and tested with data from a survey conducted amongst 101 short sea shipping companies headquartered in Europe. As detailed in the paper, the analysis revealed that regulatory pressure has generated green innovations that have enhanced the environmental and economic performance of European SSS companies and, as a result, led to a win–win situation for all parties involved. The paper discusses what those findings imply for SSS firm managers and policymakers who seek to improve the environmental or economic performance of Europe’s SSS industry.     

The Greening of Ports: A Comparison of Port Management Tools Used by Leading Ports in Asia and Europe

Abstract

From the policy and management perspective, this study aims to investigate the port management tools that port/public authorities have at their disposal and then to analyse to what extent the tools are used to enforce or encourage green port development at functional activities of port operations and development. We conduct an exploratory and comparative review based on two axes: on the one hand, the range of tools available to port authorities (pricing, monitoring and measuring, market access control and environmental standard regulation) and on the other hand, the functional activities in ports (shipping traffic, cargo handling and storage operations, intermodal connection, industrial activities, and port expansion). The situations in the leading ports in Asia and Europe, namely Singapore, Shanghai, Antwerp and Rotterdam are studied and compared, whereby the policies' effectiveness is discussed accordingly. Findings show that the ports are particularly mature in exercising environmental standard regulations which reveals that the enforcement approach is more prevalent. The most focused functional activity is shipping traffic which reflects that the ports are driven by the International Maritime Organisation. The respective port authorities in Antwerp and Rotterdam have a higher level of influence on devising green port policy in comparison to the two Asian ports.     

Atmospheric Emissions from Shipping: The Need for Regulation and Approaches to Compliance

Shipping has traditionally been viewed as the least environmentally damaging mode of freight transport. Recent studies have increasingly questioned this perception, as attention has focused on both the greenhouse gas emissions (mainly CO₂) and the emission of health-damaging pollutants (such as sulphur, nitrogen oxides and particulates) by ships. This paper reviews the available evidence on the atmospheric emissions of shipping. It proposes that the profit objective has prompted the pursuit of greater fuel efficiency within the sector, but that reliance on market forces alone is insufficient to deliver on the environmental imperative. The paper outlines the current and planned regulatory regime for the atmospheric emissions from ships and posits that greater, and more diverse, market regulation is required. Alternative general approaches to regulatory compliance are categorised as ‘alternative sources of energy’ or ‘abatement technologies’ and the characteristics of a range of specific options are analysed. The paper concludes that although the shipping industry has been slow to improve its environmental credentials, a combination of regulation and technological innovation provides it with significant potential to dramatically reduce its environmental impact.     

Emission control areas: More or fewer?

As the global sulphur limit implemented by the International Maritime Organization (IMO) and the further development of sulphur emission reduction technologies, the effects of Emission Control Areas (ECAs) on reducing the sulphur emissions from ships will be reduced gradually. To explore the necessity of ECAs in the near future, this paper introduces the fictitious sulphur emission permit allocated to shipping carriers for our considered region. We propose an ECA location problem, which determines the location of ECAs in order to minimize the impact of sulphur emissions on human health, while satisfying the constraint on the fictitious sulphur emission permit. A mixed-integer linear programming model is proposed for our investigated problem. Numerical experiments are carried out by using our proposed model applied to China and Africa, where the sulphur emissions at different sites are estimated via the fuel consumption calculated by collecting data from liner carriers. Results show that, for the case of China, the Bohai Rim, the Yangtze River Delta and the Pearl River Delta have a high probability for establishing ECAs. For the case of Africa, the Guinea Bay and South Africa have a high probability for establishing ECAs.     

Does a carbon tax affect the feasibility of Arctic shipping?

The Arctic route has huge potential for shipping between Europe and Northeast Asia with significant savings in transit time and distance. However, GHG emissions from shipping would harm the environment of Arctic area. Potential Market Based Measures of GHG emission reduction (such as carbon tax) are under consideration but they may affect the economic viability of Northern Sea Route (NSR) for containerships. This paper investigates the economic viability of NSR against Suez Canal Route (SCR) under 2 proposed carbon tax schemes (fixed vs. progressive). Three different fuel oil types (Heavy Fuel Oil, Light Fuel Oil, Liquified Natural Gas) are used as main bunker fuel for the calculation of economic feasibility. Our result reveals that when there is no carbon tax on NSR nor SCR, or both routes are under a carbon tax scheme, no matter fixed or progressive, NSR is more economically viable, regardless of fuel type choice. When only NSR is under a carbon tax scheme, the viability depends on specific carbon tax scheme and fuel choice, but for the majority of containership sizes, NSR has lower unit cost. The result also suggests that for a given route, a progressive scheme in preferable than a fixed one and LNG would be an appealing fuel with lower unit cost.     

Estimation of the perceived value of transit time for containerized cargoes

This paper proposes a novel method for estimating the perceived value of transit time of containers by shipping lines. The key idea is that a shipping line’s published schedule is the optimal decision that minimizes the sum of fuel cost and time-associated costs of the containers adopted by the shipping line. Using the proposed method, we find that the adopted values of transit time for nine trans-Pacific services operated by Orient Overseas Container Line and five trans-Pacific services operated by Maersk Line are between US$5/TEU/day and US$30/TEU/day. We further demonstrate how the adopted value can be used for designing the optimal transit times between ports, analyzing the viability of slow-steaming, checking whether ships should speed up to catch up to connecting ships on other services, and helping to predict the market share of less polluting fuels in view of rules on air emission.     

From hierarchy to networking: the evolution of the “twenty-first-century Maritime Silk Road” container shipping system

ABSTRACT

Container shipping gives a rise of international trade since the 1960s. Based on navigation data start from the mid-1990s to 2016, this paper empirically analyses the spatial pattern of China’s international maritime linkages along the “twenty-first-century Maritime Silk Road”. We interpret such evolutionary dynamics in terms of growth, hierarchical diffusion and networking phases. Networking is a new stage of the evolution of the port system, which is approached based on the graph theory, complex network methods and geomatics, the paper discusses the networking’s basic characteristics: multi-hub spatial agglomeration, the connection of the network develops across space, functional differentiation and a division of labour appear among ports. Our results show that, while the scope of China’s maritime linkages had expanded overtime, more foreign ports become connected to the “Maritime Silk Road”. In addition, the external linkages of domestic ports tend to be dispersed, reflecting upon the decline of Pearl River Delta ports and the rise of Yangtze River Delta ports, with mixed evidence for the Bohai Rim region. Lastly, the analysis underlines the emergence of a polycentric shipping system, from the Hong Kong dominance to the more diversified Shanghai/Ningbo/Shenzhen configuration. Academic and managerial implications are included.     

Modeling the impacts of alternative emission trading schemes on international shipping

Various market-based measures have been proposed to reduce CO₂ emissions from international shipping. One promising mechanism under consideration is the Emission Trading Scheme (ETS). This study analyzes and benchmarks the economic implications of two alternative ETS mechanisms, namely, an open ETS compared to a Maritime only ETS (METS). The analytical solutions and model calibration results allow us to quantify the impacts of alternative ETS schemes on the container shipping sector and the dry bulk shipping sector. It is found that an ETS, whether open or maritime only, will decrease shipping speed, carrier outputs and fuel consumption for both the container and dry bulk sectors, even in the presence of a “wind-fall” profit to shipping companies. Under an open ETS, the dry bulk sector will suffer from a higher proportional reduction in output than the container sector, and will thus sell more emission permits or purchase fewer permits. Under an METS, container carriers will buy emission permits from the dry bulk side. In addition, under an METS the degree of competition within one sector will have spill-over effects on the other sector. Specifically, when the sector that sells (buys) permits is more collusive (competitive), the equilibrium permit price will rise. This study provides a framework for identifying the moderating effects of market structure and competition between firms on emission reduction schemes, and emphasizes the importance of understanding the differential impacts of ETS schemes on individual sectors within an industry when considering alternative policies.     

Port-city exhaust emission model: An application to cruise and ferry operations in Las Palmas Port

Exhaust emissions cause air pollution and climate change. The exhausts of shipboard fuel combustion are equally damaging particularly, so close to the environmentally sensitive mainland and island coasts, as well as at ports due to their urbanized character. This paper estimates, for the first time, exhaust pollutants related to cruise and ferry operations in Las Palmas Port and, in an island context. Emission assessment is based on a full bottom-up model and messages transmitted by the Automatic Identification System during 2011. Results are described as a breakdown of NOx, SOx, PM_2.5, CO and CO₂, according to ship classes, operative type and time, providing valuable information to environmental policy makers in port-city areas and islands under similar conditions. It is generally concluded that vessel traffic and passenger shipping in particular are a source of air pollution in Las Palmas Port. Emission maps confirm location of hot spots in quays assigned for cruise and ferry operations. Policy recommendations encourage regular monitoring of exhaust emissions and market-based incentives supported by details on polluting and operative profiles. On the other hand, feasibility studies are suggested for automated mooring, LNG bunkering facilities and also shore-side energy services, prioritizing berthing of shipping sectors (or sub-sectors) with the highest share of exhaust emissions once their local effects have been confirmed by a dispersion, exposure and impact assessment.