Costs and benefits of reducing SO 2 emissions from shipping in the Greek seas
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Costs and benefits of reducing SO2 emissions from shipping in the Greek seas Ernestos Tzannatos Department of Maritime Studies, University of Piraeus, 40 Karaoli & Dimitriou, Piraeus 18532, Greece. E-mail: [email protected]
A b s t r a c t A future designation of the Mediterranean Sea as a Sulphur Emission Control Area will mandate the use of low-sulphur fuels by all shipping within the Mediterranean basin, or it will necessitate the application of SO2 abatement technologies with equivalent effects. To this effect, the Greek seas make a suitable point of reference for examining the economic consequences of such a designation, because of the heavy ship traffic within this region and its high sensitivity as a receptor of SO2 exhaust emissions from shipping. According to the results of this work, it is found that international shipping within the Greek seas produces higher external (SO2 emission) costs per unit of private (fuel) cost, in comparison to domestic shipping. It is further shown that the application of the 1.5 per cent and 1.0 per cent sulphur limit to marine fuels used by all shipping within the Greek seas will lead to reductions of SO2 emission costs which outweigh the increase in fuel costs. This was found to be most evident in the case of international shipping, since its current fuel use within the Mediterranean is limited by the IMO global sulphur cap of 4.5 per cent, allowing for sizeable desulphurization of fuel with significant impact on the private and external costs relationship. On the contrary, the impact of sulphur capping on the private and external costs associated with the domestic shipping within the Greek seas is found to be less significant, because the passenger ships which dominate domestic operations are already restricted to fuel use with 1.5 per cent sulphur by the relevant EU legislation. Finally, it is shown that for maximum reduction of SO2 emission costs from domestic (passenger) shipping within the Greek seas, the application of seawater scrubbing offers a substantially lower private cost alternative than that of using ultra-low (0.1 per cent) sulphur fuel. Maritime Economics & Logistics (2010) 12, 280–294. doi:10.1057/mel.2010.9
Keywords: ship emissions; marine pollution; shipping; transport externalities
r 2010 Macmillan Publishers Ltd. 1479-2931 Maritime Economics & Logistics Vol. 12, 3, 280–294 www.palgrave-journals.com/mel/
Costs and benefits of reducing SO2 emissions
Introduction Ship transport accounts for the overwhelming majority of world global trade and is widely acknowledged as being environment friendly compared to other modes of transport. However, shipping is currently an important contributor to global anthropogenic emissions, with a share of around 15, 4–9 and 2.7 per cent for NOX, SO2 and CO2, respectively. Emission scenario calculations up to the year 2050 show that a significant increase has to be expected in the future if ship emissions remain unabated (Eyring et al, 2005). Between 1990 and 2007, the emissions of basic pollutants (NOX, SO2, particulate matt
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