Economic and environmental impacts of scrubbers investments in shipping: a multi-sectoral analysis

Abstract

ABSTRACT The International Maritime Organization (IMO) has implemented a series of increasingly stricter regulations to reduce sulphur emissions from international shipping. As of January 2020, the global sulphur cap requires the use of fuel containing a maximum of 0.5% sulphur content, or the use of technology achieving a similar reduction in sulphur emissions. Deciding between fuel switching or investing in abatement technologies has been a recurring topic for research in the last decade, with a focus on shipping activities within Emission Control Areas (ECAs). The quest for the desulphurization of shipping results in higher operating costs as well as CO2 emissions. We estimate the economic and environmental impacts of compliance with sulphur limits for a variety of representative ship types. This paper quantitatively assesses case studies across the most important shipping sectors highlighting their different challenges. The results confirm that scrubber investments are more profitable at times of higher fuel prices, and for ships that spend relatively more time sailing. We show that the potential for speed differentiation inside and outside ECAs has been diminished. This framework can be a useful decision support system for selecting the best response amongst different compliance options to environmental regulations.