Impact study of the new sulphur regulations on a North Sea short sea route
Document typeBachelor thesis
Rights accessRestricted access - confidentiality agreement
The aim of the current study is to analyze the impact of the MARPOL Annex VI and the EU sulphur directive amendments on the short sea shipping industry taking as an example one route currently operating in the North Sea. To do so, it will be first analyzed the impact of the new requirements of the IMO on costs and prices for the chosen route. Two modes carrying the same commodity are considered. The first mode is the maritime route, affected by sulphur stringent policies and the second one is land-based. Firstly, we start our study initializing the baseline scenario where the stringent sulphur policies have not still entered into force. Secondly, we assess the effects of three low sulphur fuel (low, medium and high) and one scrubber scenarios. All the scenarios involve an increase of costs. The fuel scenarios involve an increase of fuel costs proportional to the three price per fuel tonne assumed. The scrubber scenario involves a one-time investment, an increase of operating expenses and an increase of fuel consumption. The company operating the maritime route can either absorb the totality of the cost increase of the scenarios or allocate part of this cost increase to the customer using a surcharge (increase the tariff). The first option has the advantage that no modal shift is experienced but the company experiences large loses while in the second option part of the costs are assigned to the customer but modal shift is experienced. We use the multinomial logit model to estimate the mode choice when applying surcharges. The initial route shares (proportion of the commodity using the maritime alternative), the surcharge applied and the inventory costs are the three main factors that determine the mode choice. When we apply surcharges without further measures we found that the increase of tariff is always outbalanced by the lost in modal shift. Thus, three different strategies are considered to increase the utilization: trip, vessel and speed reduction (four speed reductions are assessed). For each strategy the vessel capacity and the minimum (un)loading time in each port have to be respected. The scrubber scenario yields to better results than the fuel scenarios in all the strategies except in the speed reduction case for combinations of low yearly trips and speeds. However, the speed solutions are highly dependent on the inventory cost that are unknown. We finally recommend installing scrubbers and reducing the number of yearly trips down to 154 yearly trips per vessel experiencing a profit increase when compared with the baseline scenario of +42%.
SubjectsShort sea shipping -- Environmental aspects, Marine pollution -- North Sea, Oil pollution of the sea, Sulfur -- Environmental aspects, Convention for the Prevention of Pollution from Ships (1973), Short sea shipping -- North Sea, Transport marítim costaner -- Aspectes ambientals, Mar -- Contaminació -- Mar del Nord, Mar -- Contaminació per hidrocarburs, Sulfurs -- Aspectes ambientals, Convenio Internacional para Prevenir la Contaminación por los Buques (1973) International, Transport marítim costaner -- Mar del Nord