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How can shipowners comply with the 2020 global sulphur limit economically?
Zhu, M and Li, KX and Lin, K-C and Shi, W and Yang, J, How can shipowners comply with the 2020 global sulphur limit economically?, Transportation Research. Part D, 79 Article 102234. ISSN 1361-9209 (2020) [Refereed Article]
Copyright 2020 Elsevier Ltd.
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 Group:||Water transport|
|Objective Field:||Coastal sea freight transport|
|UTAS Author:||Shi, W (Dr Wenming Shi)|
|Web of Science® Times Cited:||24|
|Deposited By:||Maritime and Logistics Management|
|Downloads:||2 View Download Statistics|
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