The global sulphur cap is the final step in a series of regulations that aim to reduce SO x emissions from shipping. It affects international shipping and requires all vessels to use fuel with a maximum of 0.5% sulphur content or use abatement technologies that achieve a similar reduction in SO x emissions. The existing legislative framework poses several challenges, stemming mainly from a highly non-homogeneous and spatially differentiated system, with cases where the penalty fines are as low as the benefit that the violator enjoyed from non-compliances. The purpose of this paper is to develop a game theoretic modelling framework that improves the effectiveness of sulphur regulations enforcement and proposes a uniform violation fine system. A mixed strategy game with two players is formulated, representing the ship operator (who can either comply or not with the regulation), and an enforcement agency (that can opt to inspect or not inspect the ship) respectively. The proposed model can improve compliance rates and increase societal environmental benefits through reduced sulphur emissions. We also consider a new system with warnings issued for repeated violations of the regulation that would lead to a mandatory retrofit of the vessel with sulphur abatement technologies. Such models can ensure a level playing field for ship operators that currently have invested heavily in abatement options to comply with the sulphur regulations.
In: Zis , T 2018 , ' A Game theoretic approach to improve compliance to sulphur regulations ' , EURO 2018 conference on Operational Research , Valencia , Spain , 09/07/2018 - 11/07/2018 .
The purpose of this paper is to develop a game theoretic modelling framework that improves the effectiveness of sulphur regulations enforcement. The existing legislative framework poses several challenges, stemming (mainly) from a highly non-homogeneous and spatially differentiated system, with cases where the penalty fines are as low as the benefit that the violator enjoyed from not complying. This paper presents the status quo of enforcement in different countries, where the regulation applies, and develops a game theoretic approach for a uniform violation fine system. A mixed strategy game with two players is proposed, representing the ship operator (who can choose to comply or not comply to the regulation), and an enforcement agency (that can opt to inspect or not inspect the ship) respectively. The equilibrium results in an improved penalty system (for both violators and enforcing agencies). Such a system can ensure a level playing field for ship operators that currently have invested heavily in an abatement of options to comply with the sulphur regulations, by promoting good practices among ship operators, while at the same time improve compliance rates and maximize societal environmental benefits. A discussion on the implications of the global sulphur cap of 2020 is concluding the paper, and recommendations for transferability of this framework to other regulations are provided.
In: Zis , T P V 2021 , ' A game theoretic approach on improving sulphur compliance ' , Transport Policy , vol. 114 , pp. 127-137 . https://doi.org/10.1016/j.tranpol.2021.09.012
The global sulphur cap is the final step in a series of regulations that aim to reduce SO x emissions from shipping. It affects international shipping and requires all vessels to use fuel with a maximum of 0.5% sulphur content or use abatement technologies that achieve a similar reduction in SO x emissions. The existing legislative framework poses several challenges, stemming mainly from a highly non-homogeneous and spatially differentiated system, with cases where the penalty fines are as low as the benefit that the violator enjoyed from non-compliances. The purpose of this paper is to develop a game theoretic modelling framework that improves the effectiveness of sulphur regulations enforcement and proposes a uniform violation fine system. A mixed strategy game with two players is formulated, representing the ship operator (who can either comply or not with the regulation), and an enforcement agency (that can opt to inspect or not inspect the ship) respectively. The proposed model can improve compliance rates and increase societal environmental benefits through reduced sulphur emissions. We also consider a new system with warnings issued for repeated violations of the regulation that would lead to a mandatory retrofit of the vessel with sulphur abatement technologies. Such models can ensure a level playing field for ship operators that currently have invested heavily in abatement options to comply with the sulphur regulations.
On 1 January 2015, the sulphur upper limit for marine fuels used within sulphur emission control areas was lowered from 1% to 0.1%, with which vessels can comply only through using pricier ultra-low-sulphur fuel, or investing in abatement technologies. A potential increase of fuel prices could lead to closures of services due to the combined effects of loss of market due to higher freight rates, and increased operational costs. This paper builds on previous work allowing the modelling of modal shifts between sea and land-based options, and assesses the potential of operational measures that ship-owners can deploy to cope with the threat of the low-sulphur requirements. The measures include speed reduction, change of service frequency, use of alternative fuels such as liquefied natural gas, investments in scrubber systems, and improved fleet assignment. The proposed measures are tested on a set of case studies for services that are part of a short sea shipping network of a leading Ro-Ro operator. The results of this work can be useful to practitioners seeking to design new strategies that improve the resilience of their network, as well as to regulatory bodies designing new regulation that could have negative implications on certain sectors.
In: Zis , T & Psaraftis , H N 2019 , ' Operational measures to mitigate and reverse the potential modal shifts due to environmental legislation ' , Maritime Policy and Management , vol. 46 , no. 1 , pp. 117-132 . https://doi.org/10.1080/03088839.2018.1468938
On 1 January 2015, the sulphur upper limit for marine fuels used within sulphur emission control areas was lowered from 1% to 0.1%, with which vessels can comply only through using pricier ultra-low-sulphur fuel, or investing in abatement technologies. A potential increase of fuel prices could lead to closures of services due to the combined effects of loss of market due to higher freight rates, and increased operational costs. This paper builds on previous work allowing the modelling of modal shifts between sea and land-based options, and assesses the potential of operational measures that ship-owners can deploy to cope with the threat of the low-sulphur requirements. The measures include speed reduction, change of service frequency, use of alternative fuels such as liquefied natural gas, investments in scrubber systems, and improved fleet assignment. The proposed measures are tested on a set of case studies for services that are part of a short sea shipping network of a leading Ro-Ro operator. The results of this work can be useful to practitioners seeking to design new strategies that improve the resilience of their network, as well as to regulatory bodies designing new regulation that could have negative implications on certain sectors.
In: Zis , T & Psaraftis , H N 2018 , ' Operational measures and logistical considerations for the decarbonisation of maritime transport ' , hEART 2018: 7th Symposium of the European Association for Research in Transportation , Athens , Greece , 05/09/2018 - 07/09/2018 .
Maritime shipping is widely considered as the most fuel-efficient mode of transport. During the past decade, the relative share of CO2 emissions of the shipping sector has seen a slight reduction that has been attributed to the depressed market conditions that led to the resurface of the slow steaming practice. The sector has seen increasing regulatory pressure to further improve its environmental performance, not only in greenhouse gas (GHG) terms, but also in other pollutant types. Important regulation has been implemented with regards to the maximum allowable content of sulphur in marine fuel from the International Maritime Organization (IMO), whereas the introduction of MRV(monitoring, eporting, verification) in Europe will also assist in the efforts to reduce the environmental impacts of shipping. The European Union has also adopted the Transport White Paper that has set ambitious targets for reductions in GHG emissions compared to 1990 for all transport modes. At the same time, it is noteworthy that international shipping has been excluded from the COP21 climate change agreement in Paris. The discussion on possible pathways to achieve reductions in the maritime sector is currently in a stalemate. While certain Market Based Measures (MBMs) for GHGs have been contemplated at the IMO, a final decision has not been reached. In February 2017, the European Parliament voted to include shipping into the EU Emissions Trading Scheme (ETS) as of 2023, in the event that no global agreement is reached by 2021. This potential solution has been met with criticism as there are concerns that the ETS could lead to distortions in trade, and actually not be an efficient method to reduce GHG emissions. Other measures have been submitted as potential solutions to the IMO such as the introduction of an additional levy on bunker fuel, as well as hybrid proposals that also take into consideration ETS type solutions, and the EEDI (Energy Efficiency Design Index). In this paper, the implications of these measures are examined in a quantitative context whereby the objective is to identify the potential for emissions reduction in different shipping sectors. In addition to estimations on emissions reduction, logistical considerations are thoroughly examined in the paper. For example, an introduction of a tax levy will result in a higher bunker price and thus operating costs for ship operators, which will de facto alter the optimal sailing speed of the vessel to lower levels. This will result in lower emissions per trip, but may require the deployment of additional vessels to satisfy the total transportation demand, or lead to a modal shift towards other modes due to the shippers' requirements for a faster service. This sort of distortion has already been observed due to the stricter fuel requirements within SECAs (Sulphur Emission Control Areas), but was rather anticlimactic due to the in general very low fuel prices observed in 2015. With regards to the EEDI, it is a well established fact that while the rationale was to improve vessel and engine design, a potential alternative to comply with the limits would be to simply lower the sailing speed, leading to underpowered vessels. In the case studies examined in this paper, a variety of vessel types, sizes, and deployed routes are considered to explore the impacts of the different decarbonisation pathways. This paper presents a new modelling framework that allows the quantitative estimation of the effectiveness of various MBMs in emissions reduction, also considering the total cost for the achieved reduction. The required tax on fuel to reduce emissions is calculated on a parametric analysis that considers desired reduction, sailing speed, carrying capacity, fuel price, and freight rates. Case studies on liner shipping, Ro-Ro shipping, and tankers are considered, with a discussion on the role of the operating area of the vessel (ocean-going vs short sea shipping, outside vs inside SECAs). Finally, using data on the world fleet and the current trade volumes, a range of the potential reduction for CO2 emissions is performed for different values of levies on bunker fuel. The results can be useful in the way forward to decarbonising maritime transport, while also considering the economic and environmental trade-offs due to potential modal shifts, closure of services, and required fleet renewal. The constructed modelling framework is also able of assessing the impact of various other environmental regulation that may be proposed but may have a more local character (for example speed limits near the coastlines, requirements at the port etc.).
In: Zis , T & Psaraftis , H N 2017 , ' The implications of the new sulphur limits on the European Ro-Ro sector ' , Transportation Research. Part D: Transport & Environment , vol. 52 , pp. 185-201 . https://doi.org/10.1016/j.trd.2017.03.010
In an effort to reduce the environmental impacts of maritime transportation, the International Maritime Organization (IMO) designated special Sulphur Emission Control Areas (SECAs) where ships are required to use low-sulphur fuel. In January 2015, the sulphur limit within SECAs was lowered to 0.1%, which can only be achieved if vessels are using pricier ultra-low sulphur fuel, or invest in abatement technologies. The increased operating costs borne by Ro-Ro operators in SECAs due to the stricter limits can result in the shutting down of some routes and a redistribution of cargo flows with land-based alternatives. The exact repercussions of the new sulphur limits are difficult to identify in the wake of significant recent reductions of the fuel prices for both low-sulphur and heavy fuel oil. This paper presents a modal split model that estimates modal shifts vis-a-vis competing maritime and land-based modes available to shippers. This allows examining the implications of the recent low prices to modal choice, and the influence a potential increase in fuel prices may have. The model is applied to seven routes affected by the regulation based on data from a leading European Ro-Ro operator. Sensitivity analyses on market share data, cargo values, freight rates, and haulers rates are conducted. Emissions inventories are constructed to assess the environmental efficacy of the SECA regulation. The novelty of the proposed model lies in the examination of the ex-post implications of shutting down a service and the redistribution of transport. Recommendations to mitigate and reverse the negative side-effects of such environmental legislation are proposed.
This paper aims to conduct an updated literature survey on the Market-Based Measures (MBMs) currently being proposed by various member states and organizations at the International Maritime Organization (IMO) or by the scientific and grey literature as a cost-effective solution to reduce greenhouse gas (GHG) emissions from ships. Τhe paper collects, summarizes, and categorizes the different proposals to provide a clear understanding of the existing discussions on the field and also identifies the areas of prior investigation in order to prevent duplication and to avoid the future discussion at the IMO to start from scratch. Relevant European Union (EU) action on MBMs is also described. Furthermore, the study identifies inconsistencies, gaps in research, conflicting studies, or unanswered questions that form challenges for the implementation of any environmental policy at a global level for shipping. Finally, by providing foundational knowledge on the topic of MBMs for shipping and by exploring inadequately investigated areas, the study addresses concrete research questions that can be investigated and resolved by the scientific and shipping community.
In: Lagouvardou , S , Psaraftis , H N & Zis , T 2020 , ' A literature survey on market-based measures for the decarbonization of shipping ' , Sustainability (Switzerland) , vol. 12 , no. 10 , 3953 . https://doi.org/10.3390/SU12103953
This paper aims to conduct an updated literature survey on the Market-Based Measures (MBMs) currently being proposed by various member states and organizations at the International Maritime Organization (IMO) or by the scientific and grey literature as a cost-effective solution to reduce greenhouse gas (GHG) emissions from ships. The paper collects, summarizes, and categorizes the different proposals to provide a clear understanding of the existing discussions on the field and also identifies the areas of prior investigation in order to prevent duplication and to avoid the future discussion at the IMO to start from scratch. Relevant European Union (EU) action on MBMs is also described. Furthermore, the study identifies inconsistencies, gaps in research, conflicting studies, or unanswered questions that form challenges for the implementation of any environmental policy at a global level for shipping. Finally, by providing foundational knowledge on the topic of MBMs for shipping and by exploring inadequately investigated areas, the study addresses concrete research questions that can be investigated and resolved by the scientific and shipping community.
In: Zis , T P V & Psaraftis , H N 2019 , Reducing Sulfur Emissions: Logistical and Environmental Considerations . in H N Psaraftis (ed.) , Sustainable Shipping : A Cross-Disciplinary View . Springer , pp. 249-284 . https://doi.org/10.1007/978-3-030-04330-8_7
In recent years the issue of sulfur emissions from maritime transport has seen newfound attention. This chapter presents an overview of the main issues of sulfur emissions and the legislative framework that seeks to reduce the sulfur footprint of the maritime sector. It also analyzes potential modal shifts toward less efficient land-based modes which may happen as a result of sulfur regulations and investigates the related potential economic damage to ship operators. To that effect, this chapter presents findings from a recently finished project at DTU and the developed methodological framework that can be used to estimate such modal shifts, as well as to measure the efficacy of policy and ship operators' measures to reverse such shifts.