Joint decision of green technology adoption and sailing pattern for a coastal ship under ECAs

Abstract

In order to comply with the latest Emission Control Areas (ECAs) regulations, ships must use expensive low-sulphur fuel oil or relatively cheap high-sulphur fuel oil (HFO) with desulphurization equipment. This study investigates the choice of green fuel and green technology for a coastal container ship with endogenous decision of sailing pattern. The sufficient and necessary conditions for a ship to adopt scrubber installation (SI) strategy are derived, which is dependent on factors including the equivalent sailing distance, the fuel price ratio, and scrubber parameters. The case study based on the China's coastal area is conducted. Numerical examples show that the introduction of scrubber technology on coastal vessels will reduce their evasion behavior. However, the increased sulphur reduction efficiency of scrubbers increases the evasion strategies of ships, which will increase the total emissions in coastal areas. The numerical example shows that introduction the scrubber technology to the coastal ships will reduce their evasion behavior. However, the scrubber investment will increase ships' sailing speed, increasing emissions within ECA. Therefore, governments can subsidize high abatement efficiencies of the scrubber to reduce actual ship emissions.