Marine environmental emission reduction policy in the liner shipping the economic impact from trade lane perspective

This study focuses on the economic impact of the IMO Sulfur air pollution marine emissions reduction policy on carriers, as well as on socio-economic factors in the field of international liner shipping. Air pollution regulations, have the potential to shift freight away from its original port destination. This policy, which is implemented in an unequal manner (selective, global cap 0.5% out ECA and 0.1 in ECA), will create anew market failure from an economic and environmental perspective (‘pollution leakage’). This study will evaluate the economic impact by developing a Trade Lane (TL) Sulfur Emission Control Area (SECA) Cost Benefit Analysis (CBA) framework, based on the carrier problem, choosing an appropriate compliance action from aselection of alternatives, differentiated by compliance techniques. Results indicate that the scrubber is the most mature technological solution today, nevertheless, the expected impact on slot costs cannot be overlooked (compare to fuel switch alternative). Results indicate that a hypothetical alternative with a global sulfur content of 0.1% in a200 NM shore area and HFO uses in high seas were found to be more economic and less destructive to the maritime industry and less harmful to society in terms of health and potential pollution.