Operational measures to reverse the negative effects of the 0.1% sulphur limit on Ro-Ro shipping

01/24/2017 - 15:00-01/24/2017 - 17:00


Thalis Zis
(Technical University of Denmark)
Harilaos Psaraftis
(Technical University of Denmark)


Thalis Zis

In an effort to reduce the environmental impacts of maritime transportation, the International Maritime Organization designated special Sulphur Emission Control Areas (SECA) where ships are required to use low-sulphur fuel. In January 2015, the limit within SECA was lowered to 0.1%, which can only be achieved if vessels are using pricier ultra-low sulphur fuel, or invest in abatement technologies. The exact repercussions of the new sulphur limits are difficult to identify in the wake of the very low fuel prices for both low-sulphur and heavy fuel oil. Recent work has shown that despite the low fuel prices, there have been negative effects on Ro-Ro shipping as a result of the regulation. A potential increase of fuel prices to previous levels could lead to services being shut down due to the combined effects of loss of market due to higher freight rates and increased operational costs. This paper builds on previous work that allows the modelling of modal shifts between sea and landbased options, and assesses the potential of operational measures that shipowners have at their disposal to cope with the threat of the low sulphur requirements. The measures include speed reduction, change of service frequency, use of alternative fuels such as LNG, investments in scrubber systems, different pricing policies, and improved fleet assignment. The methodology developed in this work allows the quantitative economic assessment of such measures, considering the environmental balance of the system and the profitability of a route.