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.

Item Type:	Refereed Article
Keywords:	IMO 2020 sulphur limit, low-sulphur fuel oils, scrubber, cost-benefit analysis, sensitivity check
Research Division:	Commerce, Management, Tourism and Services
Research Group:	Transportation, logistics and supply chains
Research Field:	Road transportation and freight services
Objective Division:	Transport
Objective Group:	Water transport
Objective Field:	Coastal sea freight transport
UTAS Author:	Shi, W (Dr Wenming Shi)
ID Code:	137008
Year Published:	2020
Web of Science® Times Cited:	24
Deposited By:	Maritime and Logistics Management
Deposited On:	2020-01-28
Last Modified:	2020-04-30
Downloads:	2 View Download Statistics