Decarbonization Strategy Optimization for Liner Fleet under Emission Trading Policy

Abstract

Policy adaptation and the dynamic advantages of green technologies play a crucial role in optimizing decarbonization strategies for shipping companies. In this paper, a nonlinear mixed-integer model is developed to optimize fleet renewal, deployment, and sailing speed for liner fleets under the European Union (EU) emission trading system (ETS). Three heuristic algorithms are evaluated, and sensitivity analyses provide insights into the optimal timing and strategies for transitioning to alternative fuels under varying market conditions and policy scenarios. The results indicate that the model can contribute to the adjustment of strategies in response to the implementation of ETS and carbon emission reduction. The sensitivity analysis reveals that, in the short term, speed reduction and the adoption of energy-efficient technologies are prioritized, while transitioning to alternative fuels is essential for achieving long-term decarbonization goals. However, uptake costs are identified as the primary barrier to the widespread use of alternative fuels, and ETS alone may be insufficient to drive this transition. These findings provide valuable insights for policymakers in designing effective ETS frameworks for other regions and countries.

Keywords

decarbonization strategy strategy optimization liner fleet emission trading policy carbon emission

Get full access to this article

View all access options for this article.

References

Jiang

Qin

Zuo

Emission Reduction Decisions in Blockchain-Enabled Low-Carbon Supply Chains Under Different Power Structures. Mathematics, Vol. 12, No. 5, 2024, p. 704. https://doi.org/10.3390/math12050704.

Xia

Wang

Xia

Qin

Carbon Emission Reduction and Precision Marketing Decisions of a Platform Supply Chain. International Journal of Production Economics, Vol. 268, 2024, p. 109104. https://doi.org/10.1016/j.ijpe.2023.109104.

Meng

L. P.

Liu

K. M.

J. L.

Han

C. F.

Liu

P. H.

Carbon Emission Reduction Behavior Strategies in the Shipping Industry Under Government Regulation: A Tripartite Evolutionary Game Analysis. Journal of Cleaner Production, Vol. 378, 2022, p. 134556. https://doi.org/10.1016/j.jclepro.2022.134556.

Beckmann

Zöttl

Grimm

Becker

Schober

Zipse

Setting the Course for Net Zero: Translating Climate Science into Political and Corporate Targets. In Road to Net Zero: Strategic Pathways for Sustainability-Driven Business Transformation ( Zipse

Hornegger

Becker

Beckmann

Bengsch

Feige

Schober

, eds.), Springer International Publishing, Cham, 2023, pp. 17–59. https://doi.org/10.1007/978-3-031-42224-9_2.

IMO. Fourth IMO Greenhouse Gas Study. https://wwwcdn.imo.org/localresources/en/OurWork/Environment/Documents/Fourth%20IMO%20GHG%20Study%202020%20-%20Full%20report%20and%20annexes.pdf. Accessed February 1, 2020.

Saether

E. A.

Eide

A. E.

Bjorgum

Sustainability Among Norwegian Maritime Firms: Green Strategy and Innovation as Mediators of Long-Term Orientation and Emission Reduction. Business Strategy and the Environment, Vol. 30, No. 5, 2021, pp. 2382–2395. https://doi.org/10.1002/bse.2752.

Raza

Woxenius

Customer-Driven Sustainable Business Practices and Their Relationships with Environmental and Business Performance-Insights from the European Shipping Industry. Business Strategy and the Environment, Vol. 32, No. 8, 2023, pp. 6138–6153. https://doi.org/10.1002/bse.3477.

Wang

Zhen

Psaraftis

H. N.

Three Potential Benefits of the EU and IMO’s Landmark Efforts to Monitor Carbon Dioxide Emissions from Shipping. Frontiers of Engineering, Vol. 8, No. 2, 2021, pp. 310–311. https://doi.org/10.1007/s42524-020-0096-2.

UNCTAD. Review of Maritime Transport. https://unctad.org/publication/review-maritime-transport-2023. Accessed September 27, 2023.

10.

IMO. 2020Procedures for Sampling and Verification of the Sulphur Content of Fuel Oil and the Energy Efficiency Design Index (EEDI). https://wwwcdn.imo.org/localresources/en/OurWork/Environment/Documents/Air%20pollution/MEPC.324(75).pdf. Accessed November 20, 2020.

11.

IMO. 2021Guidelines on the Method of Calculation of the Attained Energy Efficiency Existing Ship Index (EEXI). https://wwwcdn.imo.org/localresources/en/OurWork/Environment/Documents/Air%20pollution/MEPC.333(76).pdf. Accessed June 17, 2021.

12.

IMO. 2022Guidelines for the Development of a Ship Energy Efficiency Management Plan (SEEMP). https://www.imorules.com/MEPCRES_346.78.html. Accessed June 10, 2022.

13.

IMO. 2016Data Collection System for Fuel Oil Consumption of Ships. https://wwwcdn.imo.org/localresources/en/OurWork/Environment/Documents/278%2870%29.pdf. Accessed October 28, 2016.

14.

IMO. 2021Revised MARPOL Annex VI. Annex 1. Resolution MEPC.328 (76). https://wwwcdn.imo.org/localresources/en/KnowledgeCentre/IndexofIMOResolutions/MEPCDocuments/MEPC.328(76).pdf. Accessed December 21, 2021.

15.

IMO. 2018Initial IMO Strategy on Reduction of GHG Emissions from Ships. Annex 11. Resolution MEPC.304 (72). https://wwwcdn.imo.org/localresources/en/OurWork/Environment/Documents/Resolution%20MEPC.304%2872%29_E.pdf. Accessed April 13, 2018.

16.

IMO. 2023IMO Strategy on Reduction of GHG Emissions FROM Ships. Annex 1. Resolution MEPC.377(80). https://wwwcdn.imo.org/localresources/en/OurWork/Environment/Documents/annex/MEPC%2080/Annex%2015.pdf. Accessed July 7, 2023.

17.

European Union. EUR-Lex. Directive (EU) 2023/959 of the European Parliament and of the Council of 10 May 2023 amending Directive 2003/87/EC establishing a system for greenhouse gas emission allowance trading within the Union and Decision (EU) 2015/1814 concerning the establishment and operation of a market stability reserve for the Union greenhouse gas emission trading system (Text with EEA relevance). https://eur-lex.europa.eu/eli/dir/2023/959. Accessed May 10, 2023.

18.

Huang

Wang

Zhen

Shao

Green Technology Adoption and Fleet Deployment for New and Aged Ships Considering Maritime Decarbonization. Journal of Marine Science and Engineering, Vol. 11, No. 1, 2023, p. 36. https://doi.org/10.3390/jmse11010036.

19.

Zhao

Chen

Fagerholt

Lindstad

Zhou

Pathways Towards Carbon Reduction Through Technology Transition in Liner Shipping. Maritime Policy & Management, Vol. 52, No. 3, 2023, pp. 417–439. https://doi.org/10.1080/03088839.2023.2224813.

20.

Zhu

Yuen

K. F.

J. W.

K. X.

Impact of Maritime Emissions Trading System on Fleet Deployment and Mitigation of CO₂ Emission. Transportation Research Part D: Transport and Environment, Vol. 62, 2018, pp. 474–488. https://doi.org/10.1016/j.trd.2018.03.016.

21.

Dai

W. L.

X. W.

Yip

T. L.

Wang

Emission Charge and Liner Shipping Network Configuration - An Economic Investigation of the Asia-Europe Route. Transportation Research Part A: Policy and Practice, Vol. 110, 2018, pp. 291–305. https://doi.org/10.1016/j.tra.2017.12.005.

22.

Chua

Y. J.

Soudagar

S. H.

Meng

Impact Analysis of Environmental Policies on Shipping Fleet Planning Under Demand Uncertainty. Transportation Research Part D: Transport and Environment, Vol. 120, 2023, p. 103744. https://doi.org/10.1016/j.trd.2023.103744.

23.

Sun

Wang

X. H.

Z. J.

Ning

Carbon and Cost Accounting for Liner Shipping Under the European Union Emission Trading System. Frontiers in Marine Science, Vol. 11, 2024, p. 1291968. https://doi.org/10.3389/fmars.2024.1291968.

24.

Bouman

E. A.

Lindstad

Rialland

A. I.

Stromman

A. H.

State-of-the-Art Technologies, Measures, and Potential for Reducing GHG Emissions from Shipping: A Review. Transportation Research Part D: Transport and Environment, Vol. 52, 2017, pp. 408–421. https://doi.org/10.1016/j.trd.2017.03.022.

25.

Clarksons Research. Green Review 2023 (Chinese). https://sin.clarksons.net. Accessed January 1, 2024.

26.

Optimization of Shipping Freight Forwarding Services Considering Consumer Rebates Under the Impact of Carbon Tax Policy. Ocean & Coastal Management, Vol. 258, 2024, p. 107361. https://doi.org/10.1016/j.ocecoaman.2024.107361.

27.

Kosmas

Acciaro

Bunker Levy Schemes for Greenhouse Gas (GHG) Emission Reduction in International Shipping. Transportation Research Part D: Transport and Environment, Vol. 57, 2017, pp. 195–206. https://doi.org/10.1016/j.trd.2017.09.010.

28.

Cariou

Halim

R. A.

Rickard

B. J.

Ship-Owner Response to Carbon Taxes: Industry and Environmental Implications. Ecological Economics, Vol. 212, 2023, p. 107917. https://doi.org/10.1016/j.ecolecon.2023.107917.

29.

Tan

Y. F.

Liu

T. T.

Wang

Liu

X. M.

An Overview on Implementation of Environmental Tax and Related Economic Instruments in Typical Countries. Journal of Cleaner Production, Vol. 330, 2022, p. 129688. https://doi.org/10.1016/j.jclepro.2021.129688.

30.

Wang

X. Y.

Khurshid

Qayyum

Calin

A. C.

The Role of Green Innovations, Environmental Policies and Carbon Taxes in Achieving the Sustainable Development Goals of Carbon Neutrality. Environmental Science and Pollution Research, Vol. 29, No. 6, 2022, pp. 8393–8407. https://doi.org/10.1007/s11356-021-16208-z.

31.

Gössling

Meyer-Habighorst

Humpe

A Global Review of Marine Air Pollution Policies, Their Scope and Effectiveness. Ocean & Coastal Management, Vol. 212, 2021, p. 105824. https://doi.org/10.1016/j.ocecoaman.2021.105824.

32.

Shi

Y. B.

Gullett

International Regulation on Low-Carbon Shipping for Climate Change Mitigation: Development, Challenges, and Prospects. Ocean Development and International Law, Vol. 49, No. 2, 2018, pp. 134–156. https://doi.org/10.1080/00908320.2018.1442178.

33.

K. X.

Xiao

Yuen

K. F.

Carbon Emission Trading Scheme in the Shipping Sector: Drivers, Challenges, and Impacts. Marine Policy, Vol. 138, 2022, p. 104989. https://doi.org/10.1016/j.marpol.2022.104989.

34.

Balcombe

Brierley

Lewis

Skatvedt

Speirs

Hawkes

Staffell

How to Decarbonise International Shipping: Options for Fuels, Technologies and Policies. Energy Conversion and Management, Vol. 182, 2019, pp. 72–88. https://doi.org/10.1016/j.enconman.2018.12.080.

35.

Christodoulou

Cullinane

The Prospects for, and Implications of, Emissions Trading in Shipping. Maritime Economics & Logistics, Vol. 26, No. 1, 2024, pp. 168–184. https://doi.org/10.1057/s41278-023-00261-1.

36.

Wang

Luo

Modeling the Impacts of Alternative Emission Trading Schemes on International Shipping. Transportation Research Part A: Policy and Practice, Vol. 77, 2015, pp. 35–49. https://doi.org/10.1016/j.tra.2015.04.006.

37.

Wallace

S. W.

Wang

Can an Emission Trading Scheme Really Reduce CO₂ Emissions in the Short Term? Evidence from a Maritime Fleet Composition and Deployment Model. Transportation Research Part D: Transport and Environment, Vol. 74, 2019, pp. 318–338. https://doi.org/10.1016/j.trd.2019.08.009.

38.

Wang

Zhen

Psaraftis

H. N.

Yan

Implications of the EU’s Inclusion of Maritime Transport in the Emissions Trading System for Shipping Companies Comment. Engineering, Vol. 7, No. 5, 2021, pp. 554–557. https://doi.org/10.1016/j.eng.2021.01.007.

39.

Deniz

Zincir

Environmental and Economical Assessment of Alternative Marine Fuels. Journal of Cleaner Production, Vol. 113, 2016, pp. 438–449. https://doi.org/10.1016/j.jclepro.2015.11.089.

40.

Xing

Stuart

Spence

Chen

Alternative Fuel Options for Low Carbon Maritime Transportation: Pathways to 2050. Journal of Cleaner Production, Vol. 297, 2021, p. 126651. https://doi.org/10.1016/j.jclepro.2021.126651.

41.

Al-Enazi

Okonkwo

E. C.

Bicer

Al-Ansari

A Review of Cleaner Alternative Fuels for Maritime Transportation. Energy Reports, Vol. 7, 2021, pp. 1962–1985. https://doi.org/10.1016/j.egyr.2021.03.036.

42.

Ampah

J. D.

Yusuf

A. A.

Afrane

Jin

Liu

H. F.

Reviewing Two Decades of Cleaner Alternative Marine Fuels: Towards IMO’s Decarbonization of the Maritime Transport Sector. Journal of Cleaner Production, Vol. 320, 2021, p. 128871. https://doi.org/10.1016/j.jclepro.2021.128871.

43.

Rehmatulla

Parker

Smith

Stulgis

Wind Technologies: Opportunities and Barriers to a Low Carbon Shipping Industry. Marine Policy, Vol. 75, 2017, pp. 217–226. https://doi.org/10.1016/j.marpol.2015.12.021.

44.

Xing

Spence

Chen

A Comprehensive Review on Countermeasures for CO₂ Emissions from Ships. Renewable & Sustainable Energy Reviews, Vol. 134, 2020, p. 110222. https://doi.org/10.1016/j.rser.2020.110222.

45.

Issa

Ilinca

Martini

Ship Energy Efficiency and Maritime Sector Initiatives to Reduce Carbon Emissions. Energies, Vol. 15, No. 21, 2022, p. 7910. https://doi.org/10.3390/en15217910.

46.

Gilbert

Bows-Larkin

Mander

Walsh

Technologies for the High Seas: Meeting the Climate Challenge. Carbon Management, Vol. 5, No. 4, 2014, pp. 447–461. https://doi.org/10.1080/17583004.2015.1013676.

47.

Eide

M. S.

Chryssakis

Endresen

CO₂ Abatement Potential Towards 2050 for Shipping, Including Alternative Fuels. Carbon Management, Vol. 4, No. 3, 2013, pp. 275–289. https://doi.org/10.4155/cmt.13.27.

48.

Agarwala

Chhabra

Agarwala

Using Digitalization to Achieve Decarbonization in the Shipping Industry. Journal of International Maritime Safety, Environmental Affairs, and Shipping, Vol. 5, No. 4, 2021, pp. 161–174. https://doi.org/10.1080/25725084.2021.2009420.

49.

Wei

Q. K.

Liu

Dong

T. Y.

A Digital Twin Framework for Real-Time Ship Routing Considering Decarbonization Regulatory Compliance. Ocean Engineering, Vol. 278, 2023, p. 114407. https://doi.org/10.1016/j.oceaneng.2023.114407.

50.

Munim

Z. H.

Dushenko

Jimenez

V. J.

Shakil

M. H.

Imset

Big Data and Artificial Intelligence in the Maritime Industry: A Bibliometric Review and Future Research Directions. Maritime Policy & Management, Vol. 47, No. 5, 2020, pp. 577–597. https://doi.org/10.1080/03088839.2020.1788731.

51.

Zhao

Peng

Zhou

A Risk-Based Decision-Making Scheme for Short-Sea Liner Fleet Renewal to Achieve Carbon Reduction Targets. Research in Transportation Business and Management, Vol. 54, 2024, p. 101112. https://doi.org/10.1016/j.rtbm.2024.101112.

52.

Corbett

J. J.

Wang

H. F.

Winebrake

J. J.

The Effectiveness and Costs of Speed Reductions on Emissions from International Shipping. Transportation Research Part D: Transport and Environment, Vol. 14, No. 8, 2009, pp. 593–598. https://doi.org/10.1016/j.trd.2009.08.005.

53.

Xia

Z. C.

Guo

Z. J.

Wang

W. Y.

Jiang

Joint Optimization of Ship Scheduling and Speed Reduction: A New Strategy Considering High Transport Efficiency and Low Carbon of Ships in Port. Ocean Engineering, Vol. 233, 2021, p. 109224. https://doi.org/10.1016/j.oceaneng.2021.109224.

54.

W. H.

D. F.

Y. J.

Zhang

J. F.

Wang

D. H.

Green Maritime: A Routing and Speed Multi-Objective Optimization Strategy. Journal of Cleaner Production, Vol. 305, 2021, p. 127179. https://doi.org/10.1016/j.jclepro.2021.127179.

55.

Pasha

Dulebenets

M. A.

Fathollahi-Fard

A. M.

Tian

Lau

Y.-y.

Singh

Liang

An Integrated Optimization Method for Tactical-Level Planning in Liner Shipping with Heterogeneous Ship Fleet and Environmental Considerations. Advanced Engineering Informatics, Vol. 48, 2021, p. 101299. https://doi.org/10.1016/j.aei.2021.101299.

56.

Wang

Y. D.

Wang

S. A.

Deploying, Scheduling, and Sequencing Heterogeneous Vessels in a Liner Container Shipping Route. Transportation Research Part E: Logistics and Transportation Review, Vol. 151, 2021, p. 102365. https://doi.org/10.1016/j.tre.2021.102365.

57.

W. H.

Han

Y. Y.

Tang

D. F.

Zheng

H. R.

Zhang

Ship Route Planning Based on Intelligent Mapping Swarm Optimization. Computers & Industrial Engineering, Vol. 176, 2023, p. 108920. https://doi.org/10.1016/j.cie.2022.108920.

58.

D. F.

Zhou

S. Y.

Han

Y. Y.

W. H.

Huang

H. X.

Multi-objective Ship Weather Routing Method Based on the Improved NSGA-III Algorithm. Journal of Industrial Information Integration, Vol. 38, 2024, p. 100570. https://doi.org/10.1016/j.jii.2024.100570.

59.

X. H.

Yuen

K. F.

Xiao

Determinants of Ship Operators’ Options for Compliance with IMO 2020. Transportation Research Part D: Transport and Environment, Vol. 86, 2020, p. 102459. https://doi.org/10.1016/j.trd.2020.102459.

60.

Zhang

Bao

Z. H.

Y. E.

Investigating the Determinants of Shipowners’ Emission Abatement Solutions for Newbuilding Vessels. Transportation Research Part D: Transport and Environment, Vol. 99, 2021, p. 102989. https://doi.org/10.1016/j.trd.2021.102989.

61.

Adami

Figari

Multi-Parametric Methodology for the Feasibility Assessment of Alternative-Fuelled Ships. Journal of Marine Science and Engineering, Vol. 12, No. 6, 2024, p. 905. https://doi.org/10.3390/jmse12060905.

62.

Uyan

Atlar

Gürsoy

Energy Use and Carbon Footprint Assessment in Retrofitting a Novel Energy Saving Device to a Ship. Journal of Marine Science and Engineering, Vol. 12, No. 10, 2024, p. 1879. https://doi.org/10.3390/jmse12101879.

63.

Kolios

. Retrofitting Technologies for Eco-Friendly Ship Structures: A Risk Analysis Perspective. Journal of Marine Science and Engineering, Vol. 12, No. 4, 2024, p. 679. https://doi.org/10.3390/jmse12040679.

64.

Peša

Krčum

Kero

Šoda

Retrofitting Vessel with Solar and Wind Renewable Energy Sources as an Example of the Croatia Study-Case. Journal of Marine Science and Engineering, Vol. 10, No. 10, 2022, p. 1471. https://doi.org/10.3390/jmse10101471.

65.

Czermański

Oniszczuk-Jastrzabek

Spangenberg

E. F.

Kozlowski

Adamowicz

Jankiewicz

Cirella

G. T.

Implementation of the Energy Efficiency Existing Ship Index: An Important but Costly Step Towards Ocean Protection. Marine Policy, Vol. 145, 2022, p. 105259. https://doi.org/10.1016/j.marpol.2022.105259.

66.

Zhang

Guan

H. T.

Chen

Wan

Towards Decarbonization: How EEXI and CII Regulations Affect Container Liner Fleet Deployment. Transportation Research Part D: Transport and Environment, Vol. 133, 2024, p. 104277. https://doi.org/10.1016/j.trd.2024.104277.

67.

Wang

H. Q.

Liu

Wang

S. A.

Sustainable Maritime Transportation Operations with Emission Trading. Journal of Marine Science and Engineering, Vol. 11, No. 9, 2023, p. 1647. https://doi.org/10.3390/jmse11091647.

68.

Zheng

J. F.

Y. Q.

Chen

J. H.

Is the Weekly Service Frequency Constraint Tight When Optimizing Ship Speeds and Fleet Size for a Liner Shipping Service?

Ocean & Coastal Management, Vol. 212, 2021, p. 105815. https://doi.org/10.1016/j.ocecoaman.2021.105815.

69.

Cariou

Cheaitou

The Effectiveness of a European Speed Limit Versus an International Bunker-Levy to Reduce CO₂ Emissions from Container Shipping. Transportation Research Part D: Transport and Environment, Vol. 17, No. 2, 2012, pp. 116–123. https://doi.org/10.1016/j.trd.2011.10.003.

70.

Damen. Damen Air Cavity System (DACS). https://www.damen.com/. Accessed January 3, 2023.

71.

SILVERSTREAM. Air Lubrication for the Shipping Industry. https://www.silverstream-tech.com/. Accessed January 10, 2022.

72.

Clarksons Research. Shipping Intelligence network. https://sin.clarksons.net. Accessed January 12, 2020.

73.

Chiang

T. C.

Liu

C. H.

Huang

Y. M.

A Near-Optimal Multicast Scheme for Mobile Ad Hoc Networks Using a Hybrid Genetic Algorithm. Expert Systems with Applications, Vol. 33, No. 3, 2007, pp. 734–742. https://doi.org/10.1016/j.eswa.2006.06.020.

74.

Baluja

Caruana

Removing the Genetics from the Standard Genetic Algorithm. In Machine Learning Proceedings, Proc., Twelfth International Conference on Machine Learning, Tahoe City, CA, Morgan Kaufmann, Morgan Kaufmann Publisher, San Francisco, CA, July 9–12, 1995, pp. 38–46. https://doi.org/10.1016/B978-1-55860-377-6.50014-1.

75.

Suman

Kumar

A Survey of Simulated Annealing as a Tool for Single and Multiobjective Optimization. Journal of the Operational Research Society, Vol. 57, No. 10, 2006, pp. 1143–1160. https://doi.org/10.1057/palgrave.jors.2602068.

76.

DNV. Key Factors to Consider When Assessing Lay-Up Options. https://www.dnv.com/expert-story/maritime-impact/Key-factors-to-consider-when-assessing-lay-up-options/. Accessed April 2, 2020.

77.

Suez Canal. Suez Canal Authority’s website. https://www.suezcanal.gov.eg/. Accessed April 13, 2019.

78.

Xinde Marine News. Silverstream CEO: Improving Vessel Efficiency Is a Matter of Business Survival. https://www.xindemarinenews.com/m/view.php?aid=28939. Accessed April 26, 2021.

79.

eworldship.com. Nearly 10,000 Ships! Dual-Fuel Conversions Will Be a ‘Cure’ for Decarbonisation of the Shipping Industry. International Ship Network. https://www.eworldship.com/html/2023/ship_market_observation_0524/192722.html. Accessed May 24, 2023.

80.

Shimotsuura

. Environmental Consequences in Lifecycle Changes of Container Shipping Vessels. Journal of Environmental Management, Vol. 365, 2024, p. 121558. https://doi.org/10.1016/j.jenvman.2024.121558.

81.

IRENA. Innovation Outlook: Renewable Methanol, International Renewable Energy Agency. https://www.irena.org/publications/2021/Jan/Innovation-Outlook-Renewable-Methanol. Accessed January 2, 2021.

82.

EUR-Lex. Commission Delegated Regulation (EU) 2016/2071 of 22 September 2016 amending Regulation (EU) 2015/757 of the European Parliament and of the Council as regards the methods for monitoring carbon dioxide emissions and the rules for monitoring other relevant information (Text with EEA relevance). https://eur-lex.europa.eu/eli/reg_del/2016/2071/oj. Accessed November 26, 2016.