University of Tasmania
Browse

File(s) under permanent embargo

How can shipowners comply with the 2020 global sulphur limit economically?

journal contribution
posted on 2023-05-20, 10:12 authored by Zhu, M, Li, KX, Lin, K-C, Wenming ShiWenming Shi, Yang, J
To comply with the International Maritime Organization’s (IMO) 2020 global sulphur limit for maritime shipping, low-sulphur fuel oils (LSFOs) and scrubbers are the most commonly applied approaches in practice, as a result of which, however, shipowners’ profits will be affected. This paper is to identify a more economical sulphur reduction approach, for which a 19,000 twenty-foot equivalent unit container ship sailing between Far East and Europe is set as a case study. Using the cost-benefit analysis, the use of scrubbers is proved to be more economical due to the higher net present value and lower annual unit cost. The sensitivity check suggests that a scrubber is more attractive in most cases except for two scenarios where LSFOs are more popular. That is, a scrubber is losing its attractiveness when prices of LSFOs and heavy fuel oil (HFO) move in the same direction with the price spread is equal to or below US$56 per ton, and when prices of HFO rise and prices of LSFOs fall with the price spread is equal to or below US$16 per ton. This finding well explains the current popularity of installing scrubbers among shipowners although retrofitting still faces many challenges.

History

Publication title

Transportation Research. Part D

Volume

79

Article number

102234

Number

102234

Pagination

1-11

ISSN

1361-9209

Department/School

Australian Maritime College

Publisher

Pergamon-Elsevier Science Ltd

Place of publication

The Boulevard, Langford Lane, Kidlington, Oxford, England, Ox5 1Gb

Rights statement

Copyright 2020 Elsevier Ltd.

Repository Status

  • Restricted

Socio-economic Objectives

Coastal sea freight transport

Usage metrics

    University Of Tasmania

    Exports

    RefWorks
    BibTeX
    Ref. manager
    Endnote
    DataCite
    NLM
    DC