New fuels and polcy instruments for shipping; an analysis of the potential to reduce risks for the environment

Purpose and goal

This project aimed to analyze solutions to reduce emissions to air from ships. Using data from actual ships, reductions in emissions were calculated and from this reduced external costs which were compared with the actual costs of these vessels. The environmental performance was studied from a life cycle perspective as well as various policy instruments. The goal of the project, which was achieved, was to analyse the costs and benefits of the various ships as well as to investigate how these benefits can be realized by means of policy measures.

Expected results and effects

LCA analysis shows that improvements can be obtained with respect to health, acidification and eutrophication of these fuel compared to traditional fuels. However, no major effects on the climate are obtained since the fuels are fossil. Cost-benefit analysis shows benefits of NOX emission control areas in the Baltic Sea and the North Sea. A number of other policy instruments were analysed with regard to the impact that one might expect regarding reduced emissions. A means of control that appears promising is a combined NOX tax and fund for investment in abatement technology.

Planned approach and implementation

LCA was performed with established methods. Fuel production, fuel transportation and ship operation were included. A number of impact categories were presented and comparisons made with similar vessels using traditional fuels. Cost-benefit analysis was done by collecting technology costs from published reports, as well as the participating companies. The benefits were calculated by studying how emission reductions of NOX, PM and CO2 reduce the costs of health impacts, impacts on crop and climate. Policy instruments were studied by comparing incentives with technology costs.