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How can shipowners comply with the 2020 global sulphur limit economically?

Zhu, M, Li, KX, Lin, K-C, Shi, W ORCID: 0000-0001-6551-0499 and Yang, J 2020 , 'How can shipowners comply with the 2020 global sulphur limit economically?' , Transportation Research. Part D, vol. 79 , pp. 1-11 , doi: 10.1016/j.trd.2020.102234.

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Abstract

To comply with the International Maritime Organization’s (IMO) 2020 global sulphur limit formaritime shipping, low-sulphur fuel oils (LSFOs) and scrubbers are the most commonly appliedapproaches in practice, as a result of which, however, shipowners’ profits will be affected. Thispaper is to identify a more economical sulphur reduction approach, for which a 19,000 twenty-footequivalent unit container ship sailing between Far East and Europe is set as a case study.Using the cost-benefit analysis, the use of scrubbers is proved to be more economical due to thehigher net present value and lower annual unit cost. The sensitivity check suggests that ascrubber is more attractive in most cases except for two scenarios where LSFOs are more popular.That is, a scrubber is losing its attractiveness when prices of LSFOs and heavy fuel oil (HFO) movein the same direction with the price spread is equal to or below US$56 per ton, and when pricesof HFO rise and prices of LSFOs fall with the price spread is equal to or below US$16 per ton. Thisfinding well explains the current popularity of installing scrubbers among shipowners althoughretrofitting still faces many challenges.

Item Type: Article
Authors/Creators:Zhu, M and Li, KX and Lin, K-C and Shi, W and Yang, J
Keywords: IMO 2020 sulphur limit, low-sulphur fuel oils, scrubber, cost-benefit analysis, sensitivity check
Journal or Publication Title: Transportation Research. Part D
Publisher: Pergamon-Elsevier Science Ltd
ISSN: 1361-9209
DOI / ID Number: 10.1016/j.trd.2020.102234
Copyright Information:

Copyright 2020 Elsevier Ltd.

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