Reducing sulfur and nitrogen emissions in shipping economically

The abatement technology choices are complicated by the growing ban on open-loop scrubbers, the dawn of nitrogen emission control areas (NECAs) and the current drop of fuel prices. This paper develops a model to select the optimal technology choice that meets both sulfur limits and Tier III nitrogen limits, and applies it to three feeder services. The results show that the most economic choice is installing exhaust gas recirculation (EGR) with or without scrubbers, depending on different fuel prices and characteristics of ships and shipping services. Scrubber installation is more suitable for a new ship or the one with remaining lifespan equaling the lifespan of scrubbers. However, installing EGR without scrubbers is recommended for risk-averse shipowners as it is always optimal or nearly optimal. The paper also indicates that expanding the ban on open-loop scrubbers within territorial water areas only slightly impacts the technology choices for many feeder services.

Automated summary

This study develops a model to analyze and select emission reduction technologies for ships. The results show that installing EGR without scrubbers is the optimal choice for risk-averse shipowners. Additionally, expanding the ban on open-loop scrubbers within territorial waters has minimal impact on technology choices for feeder services.