Strategies for the Low Sulfur Policy of IMO—An Example of a Container Vessel Sailing through a European Route

Abstract

Ships are an important part in international trade transportation and a major source of pollution. Therefore, the International Maritime Organization (IMO) implemented an amendment to the International Convention for the Prevention of Pollution from Ships (MARPOL) Annex VI, which stipulates that the sulfur content in marine fuel oil shall not exceed 0.5 wt.% starting in 2020. In order to meet the IMO low sulfur policy, shipping lines could adopt one of the following strategies: (1) using very low sulfur fuel oil (VLSFO), i.e., with sulfur content less than 0.5 wt.%; (2) installing scrubbers or other exhaust gas aftertreatment systems; or (3) replacing current fuels with clean alternative fuels such as natural gas. This study evaluates the feasibility and benefits of these strategies for shipping lines in order to determine the most cost-effective measures. First, according to the feasibility of the strategies evaluated by SWOT analysis, although scrubbers can reduce emissions of sulfur oxides into the atmosphere, more and more countries are restricting the discharge of wastewater from open-loop scrubbers into their waters. Instead, VLSFO and liquefied natural gas (LNG) are good choices in terms of environmental protection and economic benefits. Therefore, this study further evaluates the two strategies of replacing high sulfur fuel oil (HSFO) with VLSFO and converting diesel engines to LNG engines based on a cost-benefit methodology. This study took an 8500 TEU container vessel, which is powered by a marine diesel engine with the nominal power of 61,800 kW, sailing the Asian-European route as an example, and calculated the total incremental costs, pollutant emission reductions, and cost benefits arising from the implementation of the VLSFO and LNG strategies, respectively. According to the results of this study, the total incremental cost of LNG is higher than that of VLSFO in the first 4.7 years, but this gradually decreases, making the gap of the total incremental costs between the two strategies wider year by year. In comparison with using HSFO without any improvement, the total incremental costs of the VLSFO and LNG strategies increase by 12.94% and 22.16% over the following five years, respectively. The use of LNG can significantly reduce SOx, PM, NOx, and CO2 emissions; on the other hand, it leads to more CH4 emissions than the VLSFO strategy. Compared to doing nothing, the cumulative reduction rates of SOx, PM, NOx, and CO2 emissions over the next five years after the adoption of the LNG strategy are 3.6%, 7.0%, 70.4%, and 15.7%, respectively. The higher emission reduction rates of LNG compared to VLSFO illustrate that the former has a good effect on the suppression of exhaust gas pollution. In terms of the cost-benefit evaluation of the two strategies, this study shows that the VLSFO strategy is more cost-effective than the LNG strategy in the first 2.5 years, but that the cost-benefit ratio of the latter increases year by year and exceeds that of the former, and the gap between them widens year by year. Based on the evaluation results of this study, the LNG strategy is suitable for ocean-going container vessels with fixed routes and younger or larger sized vessels to meet the IMO low sulfur policy. In contrast, the VLSFO strategy is appropriate for old merchant ships with fewer container spaces. LNG is a suitable medium- and long-term strategy, i.e., for more than 2.5 years, for shipping lines to meet the IMO low sulfur policy, while VLSFO is a suitable short-term strategy.

Keywords

• IMO low sulfur policy
• very low sulfur fuel oil
• liquefied natural gas (LNG)
• cost benefit
• pollutant emissions