Journal
TRANSPORTATION RESEARCH PART D-TRANSPORT AND ENVIRONMENT
Volume 79, Issue -, Pages -Publisher
PERGAMON-ELSEVIER SCIENCE LTD
DOI: 10.1016/j.trd.2020.102234
Keywords
IMO 2020 sulphur limit; Low-sulphur fuel oils; Scrubber; Cost-benefit analysis; Sensitivity check
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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 ISFOs 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.
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