Future cost scenarios for reduction of ship CO₂emissions

Abstract

International shipping is a significant contributor to Global Greenhouse Gas (GHG) emissions, responsible for approximately 3% of global CO 2 emissions. The International Maritime Organization is currently working to establish GHG regulations for international shipping and a cost effectiveness approach has been suggested to determine the required emission reductions from shipping. To achieve emission reductions in a cost effective manner, this study has assessed the cost and reduction potential for present and future abatement measures based on new and unpublished data. The model used captures the world fleet up to 2030, and the analysis includes 25 separate measures. A new integrated modelling approach has been used combining fleet projections with activity-based CO 2 emission modelling and projected development of measures for CO 2 emission reduction. The world fleet projections up to 2030 are constructed using a fleet growth model that takes into account assumed ship type specific scrapping and new building rates. A baseline trajectory for CO 2 emission is then established. The reduction potential from the baseline trajectory and the associated marginal cost levels are calculated for 25 different emission reduction measures. The results are given as marginal abatement cost curves, and as future cost scenarios for reduction of world fleet CO 2 emissions. The results show that a scenario in which CO 2 emissions are reduced by 33% from baseline in 2030 is achievable at a marginal cost of USD 0 per tonne reduced. At this cost level, emission in 2010 can be reduced by 19% and by 24% in 2020. A scenario with 49% reduction from baseline in 2030 can be achieved at a marginal cost of USD 100 per tonne (27% in 2010 and 35% in 2020). Furthermore, it is evident that further increasing the cost level beyond USD 100 per tonne yield very little in terms of further emission reduction. The results also indicate that stabilising fleet emissions at current levels is obtainable at moderate costs, compensating for fleet growth up to 2030. However, significant reductions beyond current levels seem difficult to achieve. Marginal abatement costs for the major ship types are also calculated, and the results are shown to be relatively homogenous for all major ship types. The presented data and methodology could be very useful for assisting the industry and policymakers in selecting cost effective solutions for reducing GHG emissions from the world fleet.

The potential contribution of the shipping sector to an efficient reduction of global carbon dioxide emissions

“…The MACC estimates shown in Table 1 have in common that the maximum abatement potential of the world fleet is large (about 15% -40% relative to business-as-usual (BAU) 3 Faber et al (2009) (Eide et al, 2011, Faber et al, 2011a, or between 20%-26% of projected emissions in 2020.…”

“…, Eide et al, 2011, Faber et al, 2011a, and Faber et al, 2009. Table 1 presents an overview of the assumptions made in these studies and results for the year 2020, the year we focus on in our analysis.…”

“…The information on abatement costs and potentials that is available for the shipping sector is a few expert-based MACC studies that have been published recently , Eide et al 2011, Faber et al 2011a, and Faber et al, 2009). We use this information to generate a global MACC for the shipping sector that can be combined with a MACC for conventional CO 2 abatement in the production and consumption sectors around the world.…”

“…While there is some literature on the pros and cons of different allocation options to allocate shipping emissions to countries and on their effects for specific country groups (den Elzen et al, 2007, Gilbert and Bows, 2012, Heitmann und Khalilian, 2011, Wang, 2010 and some literature on technical abatement potentials and the costs of different measures , Eide et al 2011, Faber et al, 2011a, 2 Faber et al, 2009, Longva et al, 2010, the literature on how much the shipping sector should contribute to global emission reductions from an efficiency point of view remains limited. Only Eide et al 1 In addition, the shipping sector was one of the world's major CO 2 emitters in 2007 (evidenced by comparing CO 2 emissions of shipping in 2007 ) with data on CO 2 emissions from fuel combustion per country in 2007 (IEA, 2009b).…”

“…The MACC studies often differentiate between several categories of abatement measures, which differ from each other in terms of, e.g., costs and implementation, see Faber et al (2011a) Source: Own presentation based on Eide et al (2011) andFaber et al (2011a). 4 This number represents the central estimate of cost-effective potential (<0$/t) in Buhaug et al (2009 Operational measures mainly concern the operation and maintenance of ships and are characterized by low investment and moderate operating costs, and low abatement potential.…”