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The cost impacts of Fit for 55 on shipping and their implications for Swedish freight transport

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  • Vierth, Inge
  • Ek, Karin
  • From, Emma
  • Lind, Joar

Abstract

This paper analyzes the European Commission’s (EC) climate policy package ‘Fit for 55′ and its potential impact on cargo ships calling at Swedish ports. Three scenarios are evaluated using the Swedish national freight transport model. The Main Scenario is based on the EC’sproposal to i) include ships weighing at least 5,000 gross tons (GT) in the European Emissions Trading System (EU ETS), and to ii) introduce a tax on marine fuel. The Low Scenario includes the EC’s EU ETS proposal but assumes no tax on marine fuel, whilst the High Scenario includes the fuel tax but assumes that ships weighing at least 400 GT are included in the EU ETS. Results show that the EC’s EU ETS proposal excludes 44% of the cargo ships and 22% of the CO2 emissions, and even more so given the use of smaller ships to avoid the EU ETS, as indicated by the freight transport model. The High Scenario implies shifts to larger ships since the increase in fuel costs provides incentives to make useeconomies of scale. Shifts to other transport modes are estimated to be marginal. A policy conclusion is therefore to include smaller ships than 5,000 GT in the EU ETS to further internalize the CO2 costs from cargo ships.

Suggested Citation

  • Vierth, Inge & Ek, Karin & From, Emma & Lind, Joar, 2024. "The cost impacts of Fit for 55 on shipping and their implications for Swedish freight transport," Transportation Research Part A: Policy and Practice, Elsevier, vol. 179(C).
    • Handle: RePEc:eee:transa:v:179:y:2024:i:c:s0965856423003142
    DOI: 10.1016/j.tra.2023.103894
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    References listed on IDEAS

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    1. Johansson, Magnus & Vierth, Inge & Holmgren, Kristina & Cullinane, Kevin, 2023. "The climate and environmental effects of policies for moving freight transport from road to other modes: The case of Sweden," Working Papers 2023:5, Swedish National Road & Transport Research Institute (VTI).
    2. Anastasia Christodoulou & Dimitrios Dalaklis & Aykut I. Ölçer & Peyman Ghaforian Masodzadeh, 2021. "Inclusion of Shipping in the EU-ETS: Assessing the Direct Costs for the Maritime Sector Using the MRV Data," Energies, MDPI, vol. 14(13), pages 1-20, June.
    3. Engholm, Albin & Kristoffersson, Ida & Pernestal, Anna, 2021. "Impacts of large-scale driverless truck adoption on the freight transport system," Transportation Research Part A: Policy and Practice, Elsevier, vol. 154(C), pages 227-254.
    4. Kenneth J. Meier & Seung-ho An, 2020. "Sector bias in public programs: US nonprofit hospitals," Journal of Behavioral Public Administration, Center for Experimental and Behavioral Public Administration, vol. 3(1).
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