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Sulphur Abatement Globally in Maritime Shipping

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Abstract

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 SOX 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.

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  • Lindstad, Elizabeth & Rehn, Carl Fredrik & Eskeland, Gunnar S., 2017. "Sulphur Abatement Globally in Maritime Shipping," Discussion Papers 2017/8, Norwegian School of Economics, Department of Business and Management Science.
  • Handle: RePEc:hhs:nhhfms:2017_008
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    File URL: http://hdl.handle.net/11250/2447332
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    References listed on IDEAS

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    1. Olaf Jonkeren & Jos van Ommeren & Piet Rietveld, 2012. "Freight Prices, Fuel Prices, and Speed," Journal of Transport Economics and Policy, University of Bath, vol. 46(2), pages 175-188, May.
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    More about this item

    Keywords

    Shipping and the environment; Abatement cost and options; CO2; Marine fuels; MARPOL; IMO;
    All these keywords.

    JEL classification:

    • L92 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Railroads and Other Surface Transportation
    • Q50 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - General
    • Q52 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Pollution Control Adoption and Costs; Distributional Effects; Employment Effects

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