How the establishment of carbon emission trading system affects ship emission reduction strategies designed for sulfur emission control area

Abstract

As the backbone of the international seaborne trade, the pollution and emission from shipping are highly concerned by governments and international organizations as well. The International Maritime Organization has designated five emission control areas (ECAs) to limit sulfur oxides emissions of ships. Meanwhile, the European Union has included the shipping industry in the EU Emission Trading System since 2024 to control their carbon emissions. The strategies like switching fuel, installing scrubber or detour, are commonly used to comply with the ECA regulation, but they may increase carbon emissions and possibly incur extra carbon trading cost. In this case, the shipping company should investigate the influence of marine emission trading system (METS) on emission reduction strategies used under ECA regulation. Therefore, this paper focuses on this problem and formulates it as a mixed-integer nonlinear programming model. Several numerical experiments are conducted to show the applicability of the proposed model. The results show that ship's detour behavior is inevitable under the ECA regulation, which incurs more carbon emissions. When METS regulation is not considered, the optimal emission reduction strategy is installing scrubber. In contrast, when METS regulation is considered, the optimal choice may be installing scrubber or fuel switching depending on different sailing route, which indicates the effect of METS on ship emission reduction strategy. Moreover, the fleet deployment and sailing speed of scrubber installation strategy are affected by METS regulation, while the strategies of fuel switching and using LNG-powered ship are almost unaffected. This indicates that installing scrubber is more easily affected by emission control policies.