Study on Cost-Effective Performance of Alternative Fuels and Energy Efficiency Measures for Shipping Decarbonization

Abstract

Within the context of global initiatives to address climate change, the shipping industry is facing increasingly intensified pressure to decarbonize. The industry is engaging in the exploration and implementation of greenhouse gas (GHG) emission reduction measures, including energy efficiency technologies and alternative fuels, with the objective of accelerating the progression towards greenhouse gas mitigation. The application of various GHG emission reduction measures usually requires different levels of investment costs, and economic feasibility is a key factor influencing policy formulation and investment decisions. In this regard, this paper developed a cost-effective model for energy efficiency measures and alternative fuels based on the marginal abatement cost (MAC) methodology. This model can distinguish the differences between energy efficiency measures and alternative fuels in terms of Tank-to-Wake emissions and Well-to-Wake emissions in the GHG emission evaluation system. By taking typical ship types with significant emission contributions as study cases, i.e., bulk carriers (61–63K DWT), container ships (8000 TEU), product tankers (115K DWT), crude oil tankers (315–320K DWT), and Ro-Ro passenger ferries (3500 DWT), the GHG abatement cost-effective performance of major categories of measures such as operational measures, technical measures, renewable energy sources, and alternative fuels were calculated. According to the MAC results, the marginal abatement cost curves were plotted based on the ranking of energy efficiency measures and alternative fuels, respectively. The impacts of bunker fuel prices and carbon market prices on the cost-effectiveness were analyzed. The research results provided the GHG abatement potential of the integrated application of cost-effective energy efficiency measures, the cost-effectiveness ranking of alternative fuels, and the carbon emission price expected to bridge the price gap between alternative fuels and conventional bunker fuel. The presented methodology and conclusions can be used to assist shipping companies in selecting emission reduction measures, and to support maritime authorities in developing market-based measures.