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Dynamic spillovers connectedness among carbon trading, shipping freight, bunker oil and crude oil market: Evidence from quantile-frequency analysis

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  • Nilu, Tanzila Yeasmin
  • Wang, Chuanxu
  • Ahmed, Shek

Abstract

The energy-intensive maritime transport sector plays a crucial role in the global economy while significantly contributing to shipping-related emissions. Prior research has primarily focused on assessing the economic and environmental impacts of various legislative measures aimed at mitigating greenhouse gas (GHG) emissions in the maritime transport industry. However, limited attention has been given to the information spillover effects among carbon trading allowances, crude oil futures, bunker fuel markets, and their influence on the maritime freight sector. This study investigates the conditional spillover connectedness among carbon trading, crude oil, maritime freight, and bunker fuel markets by employing the time and frequency domain quantile connectedness method (QVAR). The findings reveal asymmetric spillover interactions under extreme market conditions, where individual markets exhibit stronger responses to negative shocks. Upon frequency connectedness spillover, short-term average TCI exhibits heightened spillover rather than medium and long-term spillovers. The negative shocks of bunker fuel, dry bulk and crude oil future market significantly influences container and tanker freight sector however vice versa characteristics is observed for the positive shocks. The carbon trading (EUA) market initially absorbs notable spillovers from other markets but becomes a significant transmitter of spillovers in the medium and long term. In contrast, the bunker fuel market demonstrates substantial spillover transmission over the medium and long term. Our analysis providing valuable insights for policymakers and industry stakeholders to align emissions reduction objectives considering spillover effects in maritime transport markets.

Suggested Citation

  • Nilu, Tanzila Yeasmin & Wang, Chuanxu & Ahmed, Shek, 2025. "Dynamic spillovers connectedness among carbon trading, shipping freight, bunker oil and crude oil market: Evidence from quantile-frequency analysis," Research in Transportation Economics, Elsevier, vol. 111(C).
    • Handle: RePEc:eee:retrec:v:111:y:2025:i:c:s0739885925000277
    DOI: 10.1016/j.retrec.2025.101544
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