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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, JTo 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 DVolume
79Article number
102234Number
102234Pagination
1-11ISSN
1361-9209Department/School
Australian Maritime CollegePublisher
Pergamon-Elsevier Science LtdPlace of publication
The Boulevard, Langford Lane, Kidlington, Oxford, England, Ox5 1GbRights statement
Copyright 2020 Elsevier Ltd.Repository Status
- Restricted