Abating Carbon Dioxide and Sulfur Oxides Emissions from Container Shipping: Articulation between Deep-Sea Shipping and Feedering in Sulfur Emission Control Areas

This paper examines the impacts on the container shipping markets of two future environmental policies aimed at reducing ship-based emissions: the low-sulfur fuel requirements from the International Convention for the Prevention of Pollution from Ships in sulfur emission control areas (SECA) and a European market-based instrument on carbon dioxide (CO2) emissions. Two regulatory scenarios are defined as well as a cost model for liner services. The paper assesses the cost implications as of the year 2018 of sulfur and CO2 policies for a typical North Europe–Asia service and two feeder lines in North Europe articulated with this transcontinental service through transshipments. The results are examined through a comparative evaluation of the impacts of these policies on deep-sea shipping and feedering (short sea shipping dedicated to transportation on feeder ships), depending on the options of compliance to the low-sulfur fuel requirements. A discussion on the possible strategies of reorganization of the container maritime networks to deal with these environmental extra costs leads to the conclusion that avoiding SECAs and CO2 scope for transcontinental routes and extending the feeder routes to capitalize on the savings from scrubbing in SECAs might rarely prove cost-effective.