This paper assesses cost as a function of abatement options in maritime emission control areas (ECA). The first regulation of air pollutions from ships which came into effect in the late 1990's was not strict and could easily be met. However the present requirement (2015) for reduction of Sulphur content for all vessels, in combination with the required reduction of nitrogen and carbon emissions for new-built vessels, is an economic and technical challenge for the shipping industry.Additional complexity is added by the fact that the strictest nitrogen regulations are applicable only for new-built vessels from 2016 onwards which shall enter US or Canadian waters. This study indicates that there is no single answer to what is the best abatement option, but rather that the best option will be a function of engine size, annual fuel consumption in the ECA and the foreseen future fuel prices. However a low oil price, favors the options with the lowest capex, i.e.Marine Gas Oil (MGO) or Light Fuel Oil (LFO), while a high oil price makes the solutions which requires higher capex (investments) more attractive.

a b s t r a c tPolicy emphasis in ship design must be shifted away from global and idealized towards regional based and realistic vessel operating conditions. The present approach to reducing shipping emissions through technical standards tends to neglect how damages and abatement opportunities vary according to location and operational conditions. Since environmental policy originates in damages relating to ecosystems and jurisdictions, a three-layered approach to vessel emissions is intuitive and practical. Here, we suggest associating damages and policies with ports, coastal areas possibly defined as Emission Control Areas (ECA) as in the North Sea and the Baltic, and open seas globally. This approach offers important practical opportunities: in ports, clean fuels or even electrification is possible; in ECAs, cleaner fuels and penalties for damaging fuels are important, but so is vessel handling, such as speeds and utilization. Globally we argue that it may be desirable to allow burning very dirty fuels at high seas, due to the cost advantages, the climate cooling benefits, and the limited ecosystem impacts. We quantify the benefits and cost savings from reforming current IMO and other approaches towards environmental management with a three-layered approach, and argue it is feasible and worth considering.

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