Incremental costs for reduction of air pollution from ships: a case study on North European emission control area

ABSTRACT In addition to sulphur oxides control, the North and the Baltic Seas have recently been designated as nitrogen oxides control area. Amidst ongoing developments in energy markets and international trade, shipowners have to develop cost-efficient strategies to comply with the new regulation. This study creates and tests a model calculating the incremental costs of abating NOx and SOx emissions under MARPOL Annex VI regulations for the following methods: SCR, HAM and internal engine modifications, marine gas oil, wet scrubbers, and liquefied natural gas propulsion. The model is tested empirically on a broad sample of 244 ships from the Swedish Commercial Fleet database for different operating contexts and fuel prices. Individual ship emission reductions and incremental abatement costs are calculated and the results are presented for the entire studied sample and per ship type class. The study also explores the sensitivity of the chosen abatement methods to cost determinants and to main engine time operation under the light of economic performance and cost-efficiency. The results of the study aim to contribute to company abatement strategy.