emission reductions and costs of abatement measures for air...

VTI notat 8A-2019

Published 2020 www.vti.se/en/publications

Emission reductions and costs of abatement measures for air pollutants and

greenhouse gases from shipping

Selected measures with importance for the Swedish Environmental Quality Objectives

Kristina Holmgren

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easures for air pollutants and greenhouse gases from shipping

http://www.vti.se/en/publications/

VTI notat 8A-2019

Emission reductions and costs of abatement measures for air pollutants and greenhouse gases from shipping

Selected measures with importance for the Swedish Environmental Quality Objectives

Kristina Holmgren

Author: Kristina Holmgren, VTI, http://orcid.org/0000-0003-2080-7947 Reg.No., VTI: 2017/0352-7.4 Publication No.: VTI notat 8A-2019 Cover pictures: Andy Li/Unsplash and Chris Pagan/Unsplash Published by VTI, 2020

http://orcid.org/0000-0003-2080-7947

Foreword Shipping is a major source of emissions of harmful air pollutants and greenhouse gas emissions. The purpose of the "Carrots and sticks" project was to identify the policy instruments and measures that can reduce air emissions from shipping and contribute to the fulfilment of the Swedish environmental quality objectives Reduced climate impact, Clean Air, Natural acidification only and Zero eutrophication in a cost-effective way. The project has been carried out by a research team from the Swedish National Road and Transport Research Institute (VTI) and the University of Gothenburg (GU) between the end of 2017 and the beginning of 2020.

During that period several things happened that had a significant impact on the project:

(1) The Swedish environmental quality objectives were revised and comprise, except for the climate goal, no longer quantitative targets. The International Maritime Organization (IMO) agreed on a goal to reduce the greenhouse gas emissions from international shipping by at least 50 percent by 2050, as compared to the 2008 level.

(2) Sweden’s official statistics on air emissions from shipping were improved using data from the Automatic information system (AIS). The "Carrots and sticks" applied a similar AIS-based approach to calculate the emissions and compared the outcome, as far as possible, to the official statistics that were published in the end of 2019. See Trosvik et al. (2020).

(3) The Swedish Transport Administration commissioned a study on emission factors for sea transports that are supposed to be used in the Swedish CBA guidelines. This study (Carlsson et al, 2019) was published in august 2019. The "Carrots and sticks" project used emission factors from the literature and compared them to the emission factors in Carlsson et al. (2019). See data set A and B in Holmgren (2020).

(4) The Swedish Maritime Administration appointed VTI to evaluate the impacts of the in 2018 revised fairway dues, see Johansson et al. (2020). The "Carrots and sticks" project used the results regarding port calls and environmental discounts derived in this study. See Vierth (2020).

A summary of Trosvik et al. (2020), Holmgren (2020) and Vierth (2020) is available in Vierth et al. (2020), which includes results and recommendations from the three reports.

The authors would like to thank the participants of the reference group, Sofi Holmin-Fridell (Swedish Maritime Administration), Leif Holmberg and Per Andersson (Swedish Environmental Protection Agency), Katarina Wigler (Swedish Transport Agency), Björn Garberg (Swedish Transport Administration), Helena Leander and Katarina Händel (Swedish Energy Agency), Christine Hanefalk (Ports of Sweden), Åsa Burman (Lighthouse), Fredrik Larsson (Swedish Shipowners´ Association), Christer Ågren (Air Pollution and Climate Secretariat) and Siri Strandenes (Norwegian School of Economics NHH) for their contributions. We especially thank Siri and Christer for valuable comments on earlier versions of our reports.

Furthermore, we thank the Swedish Transport Administration and Sweden’s Innovation Agency (Vinnova) for funding the project.

Stockholm, March 2020

Inge Vierth Project leader

VTI notat 8A-2019

Quality review Internal peer review was performed on 15 March 2020 by Nina Svensson. Kristina Holmgren has made alterations to the final manuscript of the report. The research director Mattias Haraldsson examined and approved the report for publication on 19 March 2020. The conclusions and recommendations expressed are the author’s and do not necessarily reflect VTI’s opinion as an authority. Kevin Cullinane, University of Gothenburg has proofread the script.

Kvalitetsgranskning Intern granskning har genomförts 16 mars 2020 av Nina Svensson. Kristina Holmgren har genomfört justeringar av slutligt rapportmanus. Forskningschef Mattias Haraldsson har därefter granskat och godkänt publikationen för publicering 19 mars 2020. De slutsatser och rekommendationer som uttrycks är författarens egna och speglar inte nödvändigtvis myndigheten VTI:s uppfattning. Kevin Cullinane, Göteborgs universitet har språkgranskat manuset.

VTI notat 8A-2019

Table o f contents

Summary .................................................................................................................................................7

Sammanfattning .....................................................................................................................................9

1. Introduction .....................................................................................................................................11

1.1. Background ................................................................................................................................11 1.2. Objectives...................................................................................................................................11 1.3. Delimitations ..............................................................................................................................11 1.4. Report outline .............................................................................................................................12

2. Method .............................................................................................................................................13

2.1. Abatement costs .........................................................................................................................13 2.2. Selection of abatement measures ...............................................................................................14 2.3. Emission reductions ...................................................................................................................14 2.4. The use of representative vessels and data sets ..........................................................................15 2.5. Sensitivity analysis .....................................................................................................................16

3. Description of abatement measures, assumptions and data for calculations .............................17

3.1. Emission levels and regulations for emission abatement in shipping ........................................17 3.1.1. Emissions of sulphur from shipping and related regulation..................................................18 3.1.2. Emissions of nitrous oxides from shipping and related regulation .......................................20 3.1.3. Emissions of PM and related regulation ...............................................................................22 3.1.4. Emissions of greenhouse gases and related regulation .........................................................22 3.1.5. Background on selected abatement measures .......................................................................24

3.2. Economic parameters and fuel prices ........................................................................................30 3.3. Emission factors and related parameters ....................................................................................31 3.4. Representative vessels ................................................................................................................35 3.5. Assumptions for specific abatement measures...........................................................................39

3.5.1. Onshore Power supply (OPS) ...............................................................................................39 3.5.2. Fuel switch and full electrification (alternative energy carriers) ..........................................42 3.5.3. SCR .......................................................................................................................................45 3.5.4. Energy efficiency measures and wind power .......................................................................46 3.5.5. Speed reduction/ slow steaming ............................................................................................49

4. Results ..............................................................................................................................................51

4.1. Onshore power supply ...............................................................................................................51 4.2. Fuel switches and full electrification .........................................................................................54 4.3. SCR ............................................................................................................................................64 4.4. Energy efficiency measures and wind power .............................................................................65 4.5. Speed reduction/slow steaming ..................................................................................................69

5. Discussion and Conclusions ............................................................................................................70

5.1. Discussion and conclusion of emission reductions and abatement cost calculations ................70 5.2. Uncertainties and delimitations ..................................................................................................75

References .............................................................................................................................................77

Appendix 1 ............................................................................................................................................87

VTI notat 8A-2019

Nomenclature

CH4 Methane

CO2 Carbon dioxide

CO2eq CO2 equivalents

CO2eq. incl. air pollutants CO2 equivalents including the climate impact of air pollutants

DME Dimethyl Ether

EGR Exhaust Gas Recirculation

ECA Emission Control Area

EQO Environmental Quality Objectives

GHG Greenhouse gas

GWP Global Warming Potential

HFO Heavy fuel oil

IMO International Maritime Organisation

LBG Liquid biogas

LFO Light Fuel Oil

LNG Liquid Natural Gas

MDO Marine Diesel Oil

MeOH Methanol

MGO Marine Gas Oil

MVA Mega Volt Ampere

NOX Nitrous oxides

N2O (Di)nitrous oxide

PM Particulate Matter

PM10 Particulate matter of a size ≤ 10 µm

PM2.5 Particulate matter of a size ≤ 2.5 µm

RPM Revolutions per minute

SCR Selective Catalytic Reduction

SDS Sustainable Development Scenario

SO2 Sulphur dioxide

STEPS Stated policy scenario

TTP Tank-to-propeller

WTT Well-to-tank

WTP Well-to-propeller

VTI notat 8A-2019

Summary

Emission reductions and costs of abatement measures for air pollutants and greenhouse gases from shipping – Selected measures with importance for the Swedish Environmental Quality Objectives

by Kristina Holmgren (VTI)

This report is part of the Carrot and Sticks project which has the overall objective to analyse policy instruments and measures that most cost-effectively can reduce air emissions from maritime transport in Sweden. The objective of the study presented in this report is to assess cost estimates for abatement options for measures reducing air emissions of Sulphur dioxide (SO2), nitrous oxides (NOX), particular matter (PM) and greenhouse gases (GHGs) from shipping, along with estimates of emission reductions. The emission reductions in turn contribute to the fulfilment of the Swedish Environmental Quality Objectives; Clean Air, Natural Acidification Only, Zero Eutrophication and Reduced Climate Impact. The results in this report are used as input in a simplified cost-benefit analysis, that is used to derive policy recommendations (see Vierth (2020)).

A selection of measures that can reduce air emissions from shipping impacting the Swedish Environmental Quality Objectives related to air emissions are analysed in terms of emission reductions and costs for shipowners. The time perspectives for the reductions are focused on 2030 and 2045, but also consider costs in the base case 2015. The analysed abatement measures are:

• Fuel switches, from MGO (Marine Gas oil) to LNG (liquified natural gas), LGB (liquified biogas), fossil and renewable methanol

• Full electrification by rechargeable batteries

• Onshore power supply (OPS)

• Selective Catalytic Reduction (SCR)

• Wind power (by Flettner rotors)

• Energy efficiency measures including advanced route planning, optimized propeller, slender hull, and hybridization

• Speed reduction

The cost calculations are made from a shipowner’s perspective, including investment costs for installing the abatement technology on the ship, changed operational and maintenance costs and, in many cases, cost savings due to reduced fuel consumption. Associated costs that are (not obviously) taken by the shipowner/ operator are not included. Costs per year are calculated for a base- case 2015 with cost estimates and fuel prices for 2015 and for four future fuel price scenarios for 2030 and 2045, based on projections for fossil fuel prices by the International Energy Agency.

Cost calculations are made for two sets of representative vessels and emission factors, representing both a tank-to-propeller (TTP) and a well-to-propeller (WTP) perspective. The impact on climate targets are analysed by considering CO2 alone and by summarising the greenhouse gas emissions (carbon dioxide (CO2), methane (CH4) and nitrous oxide (N2O)) in terms of their global warming potential (GWP100). There are also calculations where the all the considered air pollutants are summarised together with the greenhouse gases using GWPs, but these should be considered as indicative due to the higher uncertainty in the GWP values for the non-greenhouse gases. The results including GWP summarised air pollutants and are not used for further policy analysis.

The results of this study show that fuel switches to renewable fuels (LBG and renewable methanol) and full electrification are very effective abatement measures when it comes to the reduction of the air emissions

VTI notat 8A-2019 7

from shipping. However, fuel switches to LNG and fossil methanol have lower abatement costs (than the switches to the corresponding renewable fuels and full electrification) in the base-case 2015 but also under the future fuel price scenarios 2030 and 2045 unless a CO2 cost is introduced in the shipping sector, which is assumed to correspond to the including of the shipping sector in the EU Emissions Trading System (EU ETS) for greenhouse gases. With a CO2 cost for the shipping sector in 2030 and 2045 LBG can be a profitable abatement option.

The results show that switching to LNG will lead to increased climate impact when considering both CO2

and CH4 emissions, both in a tank-to propeller (TTP) and a well-to-propeller (WTP) perspective. This is due to the high methane slip in marine engines. Also, switching to fossil methanol will result in a net increase in CO2-equivalents in the WTP perspective. According to the fuel price scenarios, the switch to LNG will be profitable in the future. Thus, in order to mitigate the increase of climate impact, measures should be taken to reduce methane emissions both in marine engines and in the production and distribution chain of the fuel.

Many of the energy efficiency measures and the Flettner rotors have negative abatement costs in many of the fuel price scenarios. Speed reduction has a significant potential to reduce air emissions from each ship (and for fleets) and costs are negative for most cases.

Although the results from the two different data sets gave somewhat different results for the costs and emission reductions for OPS, they both showed that RoPaxes have the best conditions for using onshore power supply (OPS). Cruise vessels use a high share of their fuel consumption at berth for electricity production and local air pollutants could be reduced significantly in the ports if these ships can use OPS.

At the 2015- year price level, SCR had the lowest specific NOX reduction cost among the measures that specifically aim at reducing NOX (i.e. SCR, Fuel switches and full electrification), followed by fuel switch to LNG. Since the cost for switching to LNG will be lower in the future (according to the results) this will be a cheaper alternative in the future.

The analysis shows that N2O has a small impact on the overall results, whereas CH4 significantly impacts the results for LNG and LBG. The focus for the shipping sector should be on CO2 and CH4 for the greenhouse gas reduction targets.

VTI notat 8A-2019 8

Sammanfattning

Emissionsreduktioner och kostnader för åtgärder som minskar utsläppen av luftföroreningar och växthusgaser från sjöfarten – ett urval av åtgärder med betydelse för de svenska miljökvalitetsmålen

av Kristina Holmgren (VTI)

Denna rapport är en del av forskningsprojektet Morötter och Piskor som har som syfte att analysera styrmedel och åtgärder som på ett kostnadseffektivt sätt kan minska sjöfartens emissioner till luft. Syftet med studien är att sammanställa och beräkna kostnader för åtgärder som minskar utsläpp av svaveldioxid (SO2), kväveoxider (NOX), partiklar (PM) och växthusgaser (VHG) från sjöfart tillsammans med uppskattningar av utsläppsminskningar för dessa åtgärder. Utsläppsminskningarna bidrar i sin tur till uppfyllandet av de svenska miljökvalitetsmålen; Ren luft, Bara naturlig försurning, Ingen övergödning samt Minskad klimatpåverkan. Resultat från denna rapport används som indata i en förenklad kostnads-nytto-analys som genomförs för att rekommendera styrmedel.

Ett urval av åtgärder som kan minska utsläppen till luft från sjöfart och som påverkar de svenska miljökvalitetsmålen som relaterar till luftutsläpp analyseras avseende reduktionspotential och åtgärdskostnader för redare. Tidsperspektivet i studien är inriktat på 2030 respektive 2045 och 2015 används som basår. De åtgärder som inkluderats i analyser är:

• Bränslebyten från MGO (Marine Gas Oil) till: flytande naturgas (LNG), flytande biogas (LBG) samt till fossil, respektive förnybar metanol.

• Full elektrifiering genom laddbara batterier.

• Anslutning till landström i hamn (Onshore Power Supply, OPS).

• Selektiv katalytisk reduktion av NOX (SCR).

• Framdrivning med hjälp av rotorsegel (Flettner-rotorer).

• Energieffektiviseringsåtgärder, inklusive avancerad ruttplanering, optimerad propeller, slanka skrov och hybridicering.

• Hastighetsreducering.

Kostnadsberäkningarna är gjorda från redarnas perspektiv och inkluderar investeringskostnader för att installera åtgärderna på fartygen, förändrade kostnader för drift och underhåll, och i många fall kostnadsbesparingar till följd av minskad bränsleförbrukning. Kostnader som inte uppenbart kommer att betalas av redarna är inte inkluderade. Kostnaderna per år beräknas för dels för basåret 2015 samt för fyra framtida bränsleprisscenarier för åren 2030 och 2045 som baserats på scenarier från International Energy Agencys (IEAs).

Kostnadsberäkningarna är gjorda för två uppsättningar med representativa fartyg och emissionsfaktorer. Beräkningarna görs både ur tank-till-propeller-perspektiv (TTP) och ur källa-till-propeller-perspektiv (WTP). Klimatpåverkan av åtgärderna utvärderas både genom att titta på effekten på utsläppen av koldioxid (CO2) separat samt genom att summera effekten av utsläppsminskningar från samtliga inkluderade växthusgaser, CO2, metan (CH4) och dikväveoxid (N2O), genom att summera med hjälp av global warming potentials (GWP100) värden. I studien användes också GWP100 faktorer för de andra inkluderade luftföroreningarna för att summera deras effekter, men dessa resultat betraktas som mycket mer osäkra än de som endast inkluderar växthusgaser eftersom osäkerheten för GWP-faktorer för luftföroreningar är betydligt osäkrare och beror till exempel på var utsläppen sker. Resultaten från dessa beräkningar används inte för vidare policyanalyser eller rekommendationer.

VTI notat 8A-2019 9

Resultaten från denna studie visar att bränslebyten till förnybara bränslen (LBG och förnybar metanol) samt helelektrifiering är mycket effektiva åtgärder för att minska utsläppen av samtliga luftföroreningar och växthusgaser från sjöfart. Dock uppvisar bränslebyten till LNG och fossil metanol lägre åtgärdskostnader i basfallet, men också för bränsleprisscenarierna till 2030 och 2045 så länge det inte finns en CO2-kostnad för fossila utsläpp. CO2 -kostnaden för fossila utsläpp antas motsvara att sjöfartssektorn inkluderas i EU:s utsläppshandelssystem. Med en CO2-kostnad även för sjöfarten så kan bränslebyte till LBG bli en lönsam åtgärd i perspektivet till 2030 och 2045.

Enligt resultaten förväntas ett bränslebyte till LNG leda till en ökad klimatpåverkan om man tar hänsyn till både koldioxid och metanutsläpp oavsett om man har ett TTP eller ett WTP-perspektiv. Den främsta anledningen till den ökade påverkan är den metanslip som finns i motorerna. Även bränslebytet från konventionellt bränsle (marin gasolja, MGO) till fossil metanol resultera i att öka klimatpåverkan ur ett WTP-perspektiv. Enligt bränsleprisscenarierna 2030 och 2045kommer det att bli lönsamt att gå över till LNG i framtiden. För att motverka och komma till rätta med den ökade klimatpåverkan vid användning av LNG behöver man införa åtgärder och styrning för att minska utsläppen från motorerna men också för att minska utsläppen längs produktions och distributionskedjan för bränslet.

Många av de inkludera energieffektiviseringsåtgärderna och rotorseglen uppvisar negativa åtgärdskostnader för många av bränsleprisscenarierna. Hastighetsminskningar uppvisar också en betydande potential till utsläppsminskning och kostnaderna är negativa för de flesta fall.

Även om beräkningarna enligt de två dataseten gav olika resultat för utsläppsminskningar och åtgärdskostnader avseende användning av landström för fartyg som ligger i hamn så visade bägge beräkningarna att RoPax fartyg har de bästa förutsättningarna för landströmsanslutning. Kryssningsfartyg använder en stor andel av bränsleförbrukningen i hamn för att producera el och de lokala utsläppen av luftföroreningar i hamnen kan minskas avsevärt om dessa fartyg kan ansluta till landström.

I 2015 års prisnivå så uppvisar SCR de lägsta specifika åtgärdskostnaderna för minskning av NOX-utsläppen om man jämför mellan de åtgärder som är specifikt avsedda att minska NOX-utsläppen (SCR, bränslebyten och helelektrifiering), följt av övergång till LNG. Eftersom resultaten visar att kostnaden för övergång till LNG minskar i de framtida scenarierna så kommer detta åtgärdsalternativ för att minska NOX-utsläppen bli billigare i framtiden.

Beräkningarna med dataset A som också inkluderade N2O emissioner visar att dessa är obetydliga i jämförelse med de andra inkluderade växthusgaserna (CO2 och CH4). Metanutsläppen är däremot mycket viktiga vid bränslebyte till både LNG och LBG och därför bör fokus för sjöfartssektorn vara både på CO2 och CH4 i arbetet med att nå de uppsatta klimatmålen.

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1. Introduction

1.1. Background Shipping is a significant source of air pollution including sulphur dioxide (SO2), nitrogen oxides (NOX) and particular matter (PM) that poses negative impacts on human health and ecosystems (Brandt et al., 2013; Cofala et al., 2007; Corbett et al., 2007, Brynolf et al., 2016; Claremar et al., 2017; Cofala et al., 2018). In addition, shipping contributed to ~3% of global greenhouse gas (GHG) emissions in 2015 and the projected development is a continuous increase of this share (Olmer et al., 2017). In April 2018, the International Maritime Organization (IMO) adopted the IMO Greenhouse Gases Emissions strategy, which is a strategy to reduce the GHG emissions from shipping. For other air pollution from maritime shipping, including sulphur, NOX and other pollutants, the IMO also has regulation in the form of Annex VI to the MARPOL1 73/78.

The air emissions from shipping comes from combustion of fuel in the engines and boilers. Most ships have several engines: main engines (for propulsion mainly) and auxiliary engines (for generating power for purposes other than propulsion, such as electricity, lighting etc.). In addition, most vessels also have boilers on board to meet the demand for heating and the supply of hot water. The engines and boilers are usually run on fossil fuels, such as Heavy Fuel Oil (HFO), or Marine Gas Oil (MGO) and the exhaust gases contain fossil carbon dioxide (CO2), as well as methane (CH4), nitrous oxide (N2O), SO2, NOX and PM.

This report is written as part of the Carrot and Sticks project and has the specific objective to assess cost estimates for abatement options for measures reducing the air emissions of SO2 (sulphur dioxide), NOX

(nitrogen oxides), PM (particular matter) and greenhouse gases (GHG) from Swedish shipping along with estimates of emission reductions.

1.2. Objectives The objective of this report is to assess the costs of specific abatement measures reducing air emissions in terms of NOX, SO2, (PM) and greenhouse gases (CO2, CH4 and N2O) from shipping in or close to Swedish waters and related emission reductions for the implementation of such measures.

The results from this study are used as a basis for a Cost-Benefit Analysis (CBA) and for policy recommendations regarding policies related to the fulfilment of four of the Swedish Environmental Objectives related to air emissions: Clean Air, Natural Acidification Only, Zero Eutrophication and Reduced Climate Impact and for achieving the IMO’s GHG objectives for 2030 and 2050. In addition, the potential of measures to contribute to the recently adopted target (April 2018) by the International Maritime Organisation (IMO), to reduce greenhouse gas emissions from global shipping by at least 40% by 2030 and 50% by 2050 compared to the level in 2008, is taken into consideration. The related policy analysis and analysis of target fulfilment is presented in Vierth (2020) and Trosvik et al. (2020).

1.3. Delimitations There is a significant amount of scientific literature estimating and describing options to abate emissions from the shipping sector for compliance with current and forthcoming regulations from the IMO, the EU and others (e.g. (Bouman et al., 2017; Brynolf et al., 2014; Buhaug et al., 2009; Faber et al., 2011; Grahn et al., 2013; Lindstad et al., 2015a, 2015b; MEPC Marine Environment Protection Committee, 2018; Parsmo et al., 2017; Smith et al., 2014). Most of these studies focus on one type of emission or one specific regulation, e.g. sulphur or nitrous oxides or greenhouse gases (GHGs). However, several abatement options have an impact on more than one type of emission. In this study, the abatement costs and reductions of four emission categories; SO2, NOX, PM and GHGs (i.e. CO2, CH4 and N2O) are estimated for each abatement measure.

1 MARPOL = The international convention for the Prevention of Pollution from Ships. This convention was developed by the IMO with the objective to minimize pollution of the oceans and seas. MARPOL stands for maritime pollution


In this study, two sets of representative vessels and emission factors (referred to as dataset A and B) are used to estimate investment costs from a shipowner’s perspective and the associated changes in fuel consumption and emissions for the abatement measures. Further, in this study, a set of relevant abatement measures were selected based on their assumed potential to have an impact on the Swedish Environmental Quality Objectives for the specified pollutants. These measures include fuel switch, full electrification, SCR (Selective catalytic reduction), speed reductions (slow steaming), onshore power supply (OPS) and a set of energy efficiency measures; slender hull design, advanced route planning, optimized propeller, wind power (by Flettner rotors) and hybridization.

The measures described in this report are not exhaustive. The selection of measures to be analysed was made with the aim of including measures with the potential to have a significant impact on the emissions and possibilities to reduce them in a near term time perspective. The focus in this report is on measures that are ready to be implemented and little or no focus is on measures that are not yet technically mature or have only been implemented as demonstrations.

1.4. Report outline In chapter 2 the method used for calculating the abatement costs and emission reductions of the included measures is described. It also describes how the measures were selected.

Chapter 3 gives a background on the emission levels of the included emission categories from shipping and a background on some of the important regulations that drives the implementation of emission reducing measures in the shipping sector. In chapter 3 there is also a more general description of abatement options for emissions from shipping with focus on the selected measures. Section 3.2 presents the economic parameters used in the calculations of this study, including fuel prices. Section 3.3. presents the two sets of emission factors used in the calculations and section 3.4 describes the two sets of representative vessels used in the calculations. In section 3.5 the specific assumptions and data used for calculating the costs and emission reductions for the abatement measures are given in detail.

Chapter 4 presents the calculated emission reductions and abatement costs. The detailed data can be found in the Supplementary material

Chapter 5 includes a discussion and the conclusions draw from this work.

There is also some additional data and explanations given in the Appendix to this report.


2. Method This study has a Swedish perspective, since the results are intended to be used in a cost-benefit analysis (CBA) for Sweden for the years 2015, 2030 and 2045, with the aim of estimating the efficiency of contributing to the fulfilment of four of the Swedish Environmental Objectives, i.e. Clean Air, Natural Acidification Only, Zero Eutrophication and Reduced Climate Impact. For the GHG emissions, the current project takes a larger perspective than just Swedish, by also considering the IMO GHG reduction targets and by including not only tank-to-propeller (TTP), but also well-to-propeller (WTP) perspectives on emissions.

In this study the abatement costs for reducing the emissions of SO2, NOX, PM and greenhouse gases (CO2, CH4 and N2O) are estimated from a shipowner’s (or operator’s) perspective. This means that infrastructural costs are not directly included (e.g. investments on the land side for OPS (onshore power supply) or infrastructure investments for alternative fuel supply in ports etc.). Rather, these costs will be included in the analysis of the efficiency of policy instruments that will be carried out in other parts of the Carrots & Sticks project. It could be argued that costs falling upon actors other than shipowners, (e.g. ports) will be passed on to shippers by increased fees, but these costs have not been included in the abatement cost estimates for the shipowners in this study. The investment costs for the different measures used in the analysis undertaken within this study are based on estimates available in the scientific literature and reports. The base year for the cost calculations is 2015 and, hence, all costs have been recalculated to the monetary values of 2015. Cost estimates are also made for the years 2030 and 2045 using different fuel price scenarios. Fuel prices used are presented in section 3.2 and are based on the scientific literature and statistics.

2.1. Abatement costs The abatement cost of a specific measure is calculated as the annualized costs, including investments cost and operational costs, of the abatement technology.

𝐴𝐴𝐶𝐶𝑗𝑗 = 𝐶𝐶𝑗𝑗 + 𝛥𝛥𝑂𝑂&𝑀𝑀𝑗𝑗 − 𝐸𝐸𝑗𝑗 , where Eq. (1)

ACj = abatement cost for measure j

Cj = annualized investment cost for measure j

ΔO&Mj = the change in service or operating and maintenance cost related to the use of technology j as compared to the base-case

Ej = the energy (or fuel) savings from an energy saving measure, which is the product of the price of energy and the saving of energy according to Eq. (2a) below:

𝐸𝐸𝑗𝑗 = 𝛼𝛼𝑗𝑗 ∗ 𝐹𝐹𝑏𝑏 ∗ 𝑃𝑃 Eq. (2a)

Where, in the case of an energy saving measure:

αj = fuel reduction rate of technology j

Fb = pre-installation or original annual fuel consumption for a ship

P = price of fuel

or in the case of a fuel switch:

𝐸𝐸𝑗𝑗 = 𝐹𝐹𝑏𝑏 ∗ 𝑃𝑃𝑏𝑏 − 𝐹𝐹𝑗𝑗 ∗ 𝑃𝑃𝑗𝑗 Eq. (2b)

Where

Fb = original (base-case) annual fuel consumption

Pb = price of original (base-case) fuel

Fj = annual fuel consumption with fuel j


Pj = price of fuel j

The abatement costs are calculated from a shipowner’s perspective and, hence, the investment and operational costs included are those that will fall upon the shipowner.

The total abatement cost is calculated by summing the annualized investment cost (C), and the annual change in operational costs. The annualization of the investment costs is achieved by using an annualization factor (or capital recovery factor, CRF) defined by the equations below:

Annualization

𝐶𝐶 = 𝐼𝐼 ∗ 𝐶𝐶𝐶𝐶𝐹𝐹 Eq. (3)

Where

I = investment cost (1+r)𝑙𝑙𝑙𝑙∗r 𝐶𝐶𝐶𝐶𝐹𝐹 = Eq. (4) (1+r)𝑙𝑙𝑙𝑙−1

Where

CRF = capital recovery factor

r = real interest rate

lt = lifetime of the investment (years)

Data on investment costs and the emission reduction potential of the different abatement measures are presented in section 3.5.

2.2. Selection of abatement measures In order to limit the abatement measures to a tractable number of measures, a selection was made based on the potential of an individual measure to have a significant impact on the achievement of the Swedish Environmental Quality Objectives; Clean Air, Natural Acidification Only, Zero Eutrophication and Reduced Climate Impact. The selection excluded measures that are not yet mature (such as fuel cells, ammonia as a fuel etc.) and measures that, to a large extent, have already been implemented and where additional or further implementation would have a small effect (e.g. measures reducing Sulphur emissions, see Section 3.1.1). Note that omitted abatement measures might be important for emission reductions under the longer time frame, until 2045, but due to the immaturity of the technology and the difficulty in estimating costs, they have not been included in this report.

The included abatement measures are presented in more detail in section 3.5.

2.3. Emission reductions The emission categories considered in this study are CO2, CH4, N2O2, NOX, SO2 and PM. Emission reductions for the three greenhouse gases; CO2, CH4, and N2O are calculated separately, but results are summarised to CO2-equivalents (CO2eq.) by using GWP100-factors (global warming potential factors for the time span of 100 years). The air pollutants NOX, SO2 and PM also have an impact on the radiative balance (climate impact) and, therefore, results are also presented in terms of CO2-equivalents using the GWP-factors for these air pollutants. However, the uncertainty in the GWP-factors for the air pollutants is greater, mainly since these gases are involved in different processes in the atmosphere where they can both contribute to warming and cooling of the climate and there is also a dependency on where these emissions occur.

2 N2O is included in the calculations according to one of the data sets analysed (data set A - see section 2.4), but not in the calculations according to the other (data set B – see section 3.5). This is because the results from the analysis of data set A showed that these emissions are generally very low and do not have a significant impact on the results.


Therefore, these results should be considered as more uncertain than the GWP summarised emissions that only include greenhouse gases.

The emission reductions are calculated from two different perspectives:

• From a tank-to-propeller (TTP) perspective, which shows the emission changes from the ship (i.e. emissions directly connected to the shipping sector).

• From a well-to-propeller (WTP) perspective, which also includes upstream emissions (emissions related to fuel production, production of electricity used etc.) and thereby indicates the overall impact of an abatement measure in a manner that is more directly related to the targets of reducing total emissions, and not only emissions from the shipping sector.

Data on emission factors and GWP-factors used in the calculations are given in Section 3.3. Two different sets of emission factors for maritime fuels are used:

• emission factors given by Brynolf (2014) and

• emission factors as recommended by Carlsson et al. (2019), complemented by emission factors from Brynolf (2014) for the well-to-tank (WTT) perspective3 and for CH4-emissions (which are not included in Carlsson et al. (2019)).

2.4. The use of representative vessels and d ata sets Many of the investment costs and emissions reduction potential are dependent on different vessel-specific factors such as: vessel category, vessel size, main engine capacity, annual fuel consumption etc. In this study, representative vessels are used for estimating costs and emissions reductions.

At the starting point of this study the data available on fuel consumption for Swedish domestic and international shipping was not reflecting the actual consumption at an acceptable level of uncertainty. There was also a lack of good data for fuel consumption divided upon different ship types and vessel sizes etc. Therefore, the SMHI (Swedish Meteorological and Hydrological Institute) was commissioned to use the SHIPAIR model for estimating better fuel consumption data for shipping in Sweden and the surrounding seas. The work by SMHI resulted in Windmark (2019) which includes both fuel consumption and detailed information on the characteristics of the fleet that was sailing the waters in 2015. In addition, in September 2019 Carlsson et al. (2019) was published which included the updated and relevant emission factors for Swedish shipping sector.

Due to the changing availability of data, this study includes emission reduction and abatement cost calculations based on two different data sets:

Data set A: Uses the emission factors from Brynolf (2014) and a set of representative vessels presented in Table 16. The set of representative vessels include four vessels representing four different ship types (i.e. one specific size for each ship type) selected on the basis of the ship types that contributed the most to emissions from shipping in the Baltic sea according to Johansson and Jalkanen, (2016) – see section 3.4.

Data set B: Uses the emission factors from Carlsson et al. (2019), complemented by some factors from Brynolf (2014) and the representative vessels presented in Table 15. The set of representative vessels include eight different ship types and different size classes within each ship type. This data set includes several more specific characteristics of each vessel and is based on the data calculated from AIS data using the SHIPAIR model presented in Windmark (2019).

3 Well-to-tank (WTT) + Tank-to-propeller (TTP) = Well-to-propeller (WTP).


2.5. Sensitivity analysis The use of the two data sets should not be seen as a sensitivity analysis. The sensitivity analysis is rather performed by applying the different fuel price scenarios (see section 3.2) since most of the measures are very dependent on the fuel prices.


3. Description of abatement measures, assumptions and d ata for calculations

This chapter includes a description of the abatement measures and the data used for the cost and emissions reduction calculations. It also includes a background on some of the important regulations that drives the implementation of emission reducing measures in the shipping sector.

3.1. Emission levels and regulations for emission abatement in shipping This section includes a short background and description of some incentives and regulations that are effective or are becoming effective for shipping in Sweden and its surrounding waters (mainly including the North Sea and the Baltic Sea). The regulations and incentives described here do not fully cover all incentives and regulations; a full assessment of regulations and incentives on a global level has been done by Christodoulou et al., (2019). The coverage in the present report is mainly of administrative policy instruments (compulsory regulations) and does not include economic and informative instruments such as the Clean Shipping Index or Environmental Ship Index and port fees etc. This chapter also describes the current emission levels and projected emission levels for the studied emission categories.

Air emissions from the shipping sector continue to grow as the sector grows. The most concerning emissions from shipping are NOX, SO2, PM and CO2.

According to e.g. Winkel et al. (2016), the contribution of shipping emissions has been increasing globally, while on the other hand the emissions from other sources are declining. Global NOX and SO2 emissions from all shipping represent about 15% and 13% of the relevant air pollutants from anthropogenic sources reported in the latest IPCC Assessment Report - AR5 (Tocker et al., 2013). In harbour cities or in cases where ports are located near to densely populated areas, ship emissions are often one of the dominant sources of urban air pollution.

According to the 3rd IMO GHG study (Smith et al., 2014), maritime transport emits around 1,000 Mtonnes of CO2 annually, corresponding to approximately 2.5% of global greenhouse gas emissions. Further, shipping emissions are predicted to increase between 50 and 250% by 2050, depending on future economic and energy developments. According to EEA (2019a) the maritime transports in the EU accounted for 13% of the greenhouse gas emissions from the transport sector

Fuel use

Traditionally, the most commonly used fuel in marine shipping on a global scale is heavy fuel oil (HFO) with high sulphur content (Lindstad et al., 2015a). Heavy fuel oil is the residual fuel remaining after removal of lighter fractions such as naphtha, petrol, diesel and jet fuels, from crude oil in a refinery.

In Swedish waters and in the North European SECA (comprising the Baltic Sea and the North Sea4) the distribution of fuel used by ships looks somewhat different than on the global scale, due to the stricter sulphur emissions regulations which apply (see section 3.1.1). As can be seen in Table 1 many ships use Marine gas oil (MGO), Marine Distillate oil (MDO) or Heavy fuel oil with ultra-low sulphur content (ULSHFO), which all are cleaner fuels. High sulphur fuel oil (HSFO) and liquid natural gas (LNG) are used in relatively low quantities.

In this study, the focus is on emissions from shipping in (or near) Sweden and, therefore, the selection of abatement measures is focused on measures relevant for shipowners operating ships in Swedish waters (or surrounding area) and calling at Swedish ports.

4 For the exact definition of the sea areas included in the North European SECA, please visit (IMO, 2020).


Table 1. Fuel consumption for vessel propulsion 2015 per fuel type for different geographical areas. Source: Vierth, (2018).

Fuel type* National

transports

Swedish

waters

Economic

zone

National

transports

Swedish

waters

Economic

zone

Cubic meters Tonnes

HSFO (HFO) 1 164 (1%) 17,107 (6%) 29,159 (7%) 1,164 (1%) 17,107 (8%) 29,159 (9%)

ULSFO (HFO) 37,535 (37%) 105,511 (39%) 159,652 (41%) 31,529 (37%) 88,629 (40%) 134,108 (41%)

MGO 42,332 (42%) 110,308 (41%) 164,452 (42%) 35,560 (42%) 92,658 (42%) 138,138 (42%)

MDO 19,196 (19%) 19,188 (7%) 19,195 (5%) 16,124 (19%) 16,118 (7%) 16,124 (5%)

LNG 0 (0%) 17,528 (7%) 17,528 (4%) 0 7,713 (3%) 7,713 (2%)

Total 100,227 269,642 389,986 84,377 222,225 325,242

3.1.1. Emissions of sulphur from shipping and related regulation In Europe, SO2 emissions have shown a decreasing trend over the past 30 years. According to (EEA (2019a) the sulphur emissions from the EU28 have decreased by 70% between 2005 and 2017 (all sectors, however not including international maritime shipping). Based on the emissions reported under the LRTAP5

Convention,(which includes national and international shipping, but not international maritime shipping) the EEA, (2019) states that national and international shipping in 2017 was responsible for 12% of the total SOX

emissions in the EU. According to Winkel et al. (2016) the SO2 emissions in the year 2000 from international shipping in the seas surrounding the EU were between 20% and 30% of the land-based emissions, while in 2020 these emissions from maritime activities are projected to be about as large as those from land-based sources.

In the EU, sulphur emissions have been regulated by the EU Directive 1993/12/ (EU Communities Council, 1993) and subsequent amendments (e.g. 1999/32/EC (EU COM, 1999), 2012/33/EU (EU COM, 2012) and, most recently, by EU Directive 2016/802 (EU COM, 2016)), known as the “sulphur Directive”. The Sulphur Directive regulates the sulphur content in fuels used both in land-based and maritime applications. When and where relevant, the Directive adapts EU legislation to developments under MARPOL Annex VI. .

The Baltic Sea and the North Sea have been SECA areas (Sulphur Emission Control Areas) since 2006 and 2007 respectively. ECAs (Emission Control Areas) are sea areas where stricter controls have been established to minimise airborne emissions as defined by Annex VI of the 1997 MARPOL Protocol. The SECA regions have regulations for all ships (new and old) on the emission of SO2. Since the amount of sulphur emitted is directly related to the sulphur content of the fuel, the regulation has been set as a maximum allowed sulphur content (by weight) of the fuel used. Using fuels with higher sulphur content is allowed, if the ship is equipped with end-of-pipe solutions (e.g. scrubbers) that reduce the sulphur content in the exhaust gases to levels corresponding to the use of a fuel with sulphur content complying with the set limits. The SECA region in the Baltic, the North Sea and the English Channel has had a limit on the sulphur content of fuel set at a maximum of 0.1% wt. since 2015, see Table 2. This limit can be compared to the global limit on sulphur content in marine fuels, which until the end of 2019 was 3.5% wt. and from 1st

January 2020 is 0.5% wt.

According to Transport Analysis (2017a), the restrictions of only 0.1% wt. sulphur content in marine fuels within the SECA from 2015 resulted in a clear shift to Marine distillate fuels (MD, e.g. MGO and MDO) from Residual Oils (RO, e.g. HFO): For the Swedish domestic shipping, the share of MD fuels more than doubled in the period 2014-2016. The analysis of fuel utilization after the change of sulphur limits in the

5 LRTAP = Long-range Transboundary Air Pollution.


North and Baltic Seas clearly show that there has been a significant change. In addition, the ratio of compliance with the SECA regulations seems high (95%) (Transport Analysis, 2017a).

Table 2 summarizes the IMO and EU regulation on sulphur emissions for different types of ships and the progression during the last decade.

Table 2 Allowed sulphur contents of marine fuels according to IMO MARPOL Annex VI and EU regulations (source:(IMO, 2016a)). This shows the historical development up until 1st January 2020. The percentages are based on a mass to mass basis.

Global sulphur limits outside SECAs

Sulphur limits inside SECAs established to limit SOX and PM

Sulphur limits for passenger ships operating on regular services inside European sea areas according to EU Directive

Ships in EU ports according to EU Sulphur Directive (to be at berth >2 hours)

4.5% prior to 1 January 2012 1.5% prior to July 2010 1.50% prior to 1 January 2020

0.10% after December 2012

3.5% on and after 1 January 2012

1.00% on and after 1 July 2010




The sulphur emissions to air from shipping comes from sulphur in the exhaust gases from the engines and boilers. The emission levels are directly dependent on the sulphur content in the fuel and there are mainly two ways of reducing the sulphur emissions:

1. Shifting to fuels with lower sulphur content or

2. Using scrubbers to remove the sulphur from the flue gases before they reach the atmosphere.

There are several types of scrubbers, i.e. wet scrubbers, membrane scrubbers and dry scrubbers. Today, the wet scrubber is the technology that is present in the largest number of onboard applications and these can be operated in two modes:

• open-loop mode in which the treated wash water is disposed back into the sea and

• closed-loop mode where the treated wash water (scrubber liquid) can be collected for disposure in port.

The available scrubber systems can either be open-loop, closed loop or hybrid scrubbers, where the latter can switch between open-loop and closed-loop mode.

There are regulations set by the IMO on several parameters of the wash water from scrubbers that needs to be met before discharge back to the sea (including turbidity, PAHs (polycyclic aromatic hydrocarbons), and pH) and local regulation can also be stricter. The open-loop scrubbers are less expensive but questionable from an environmental point of view, since the scrubber water not only contains sulphur (i.e. the scrubber water will be acid, although the sea water will buffer this, but also other toxic components such as heavy metals etc. that will have a negative impact on the marine ecosystem. The closed loop scrubbers are more expensive and there also needs to be infrastructure in ports to accept the scrubber disposure, as well as the capacity and infrastructure for further handling.

There is an ongoing discussion about the environmental impact of open-loop scrubbers and several ports and countries have already banned the use of them, including Singapore, Latvia, Lithuania, Belgium, Dublin in Ireland, Fujairah and Abu Dhabi in the United Arab Emirates, India and China, In the US; Connecticut, Massachusetts, California and Hawaii (Argus Media, 2019; Reuters, 2019).

According to Lindstad and Eskeland (2016), both the investment costs and the running costs for a closed loop scrubber are double those for an open loop scrubber. In addition, the closed loop system also requires investments in ports for enabling the handling of the discharge.


3.1.2. Emissions of nitrous oxides from shipping and related regulation Emissions of nitrogen oxides (NOX) cause damage to health and ecosystems. In Europe, shipping contributes to a large and growing share of the total NOX emissions. According to the EEA (2019) NOX emissions from shipping (international and international inland, but not international maritime shipping) were in 2017 responsible for 23% of the NOX emissions in the EU. If also considering NOX emissions from international maritime shipping in the seas surrounding the EU, the share is even bigger. During the last few decades, the EU and its member states have gradually strengthened NOX emission abatement for a wide range of land-based activities, including industrial installations (stationary) and road vehicle transport. These efforts have resulted in a more than halving of the total emissions in 2018 compared to the level in 1990 (Eurostat, 2018). According to the EEA (2019), all transport modes have reduced their emissions of air pollutants (CO, NH3, NMVOCs, SOX and NOX) since 1990, except for international aviation and shipping from which several of these pollutants have increased. For international shipping CO, NOX and NMVOCs have increased.

NOX emissions from shipping do not originate from the fuel as, for instance, do the sulphur and GHG emissions. NOX is formed during combustion when nitrogen and oxygen in the ambient air reacts at the high pressures and temperatures in the engine during operation. High temperatures and pressures are necessary to accomplish the high efficiency and power from the engine (Transport Analysis, 2017b).

MARPOL Annex VI regulates NOX emissions from the shipping sector. The regulation applies to each marine diesel engine with a power output of more than 130 kW installed on a ship, with the exception of engines used solely for emergencies and engines on ships operating solely within the waters of the state in which they are flagged. The latter exception only applies if these engines are subject to an alternative NOX

control measure. The specifics of the IMO NOX regulations are summarized in Table 3.

Table 3. MARPOL Annex VI NOX emission limits. Source: (IMO MEPC, 2014).

Tier level, date and comprehensiveness Effective from

Rated engine speeda and emission limits

Rpm< 130 Rpm 130- < 2000c

Rpm > 2000

I – includes vessels built between 2001 – 2010 and applies globallyb

2005 17.0 g NOX/kWh 45*n-0.2 9.8 g NOX/kWh

II – includes vessels built from 2011 and onwards and applies globally

2010 14.4 g NOX/kWh 44*n-0.23 7.7 g NOX/kWh

III – includes vessels built from 2016 and onwards, in the North American and US Caribbean NECA – while it applies for vessels built from 2021 in the North Sea and Baltic Sea NECA areas

2016/2021d 3.4 g NOX/kWh 9*n-0.2 1.96 g NOX/kWh

a Engine maximum operating speed

b Tier I standards are applicable to existing engines, installed on ships built between 1January 1990 to 31 December 1999, with a displacement ≥ 90 liters per cylinder and rated output ≥ 5000 kW, subject to the availability of an approved engine upgrade kit. Further, it includes any engine that undergoes a major conversion on or after 1 January 2000. Major conversions include the replacement by a new engine, an increase of the maximum continuous rating (MCR) of the engine by more than 10% or substantial modification as defined in the NOX Technical Code. c n = rpm, revolutions per minute. d For the NECA in North America and the United States Caribbean Sea, the NOX Tier III levels are effective from 1 January 2016 and in the NECA of the North Sea and the Baltic sea it will be effective from 1 January 2021.

As Table 3 shows, the IMO has decided that the North Sea and the Baltic Sea will be a NECA (Nitrogen Oxides Emission Control Area) as from 2021, and the Tier III NOX emission levels will then be required for new ships operating within this area. As from 2016, the Tier III levels are already required for new ships within the American ECA regions. The Tier III level corresponds to an 75-76% reduction of NOX emissions


compared to Tier II levels (which is the global requirement for ships built from 2011 and onwards) and an 80% reduction compared to Tier I levels.

Since 1998, Sweden has environmentally differentiated fairway dues. Between 1998 and 2014, the system was differentiated for sulphur oxides (SOX) and nitrogen oxides (NOX) based on reduction certificates. The implementation of the sulphur directive in the SECA in 2015 made the SOX differentiation obsolete and the fairway dues were only differentiated for NOX between 2015 and 2017. The procedure for reducing SOX

emissions by switching to fuels with lower sulphur content is easy compared to measures to reduce NOX

emissions (which require investments in e.g. Selective Catalytic Reduction (SCR) systems). The number of vessels with SOX reduction certificates is considerably higher than the number of vessels with NOX reduction certificates (Lindé and Vierth, 2018). In 2018, the differentiated fairway dues system was replaced by a system that is differentiated based on the Clean Shipping Index.

There are mainly four different ways to reduce NOX emissions from ships:

• Aftertreatment measures (e.g. SCR).

• Combustion modifications (to prevent the formation of NOX).

• Fuel switches (and/or changing engine technology).

• Reducing fuel consumption.

NOX emissions in the exhaust gases from ship engines can be reduced to Tier II levels by internal engine modifications that adjust combustion parameters (Winnes et al., 2016). However, to reach Tier III limits, major changes will be needed. In order to comply with the Tier II standards, there are several technical measures as listed in, for example, SMA (2009). Yaramenka et al. (2017) stated that at the current level of knowledge and technology standards, only catalytic options or fuel switch are abatement options that can result in compliance with the NOX Tier III emission levels. The reduction in NOX due to fuel switch varies significantly; switching from HFO to LNG reduces the NOX significantly (up to 90% for lean engines), whereas a fuel switch to MGO only reduces the emissions by a few percent (Brynolf et al., 2014).

SCR (Selective Catalytic Reduction) is a technology that has proven to be able to reduce NOX emissions to the Tier III standards. In SCR, the flue gases pass over a base metal catalyst via an added reducing agent, normally a water solution of urea. Further, SCR can be used in combination with several marine fuels, i.e. high sulphur levels, and different marine engines. However, low engine load (i.e. low temperatures) may still prove to be an issue for the successful operation of the SCR, along with a potential catalytic deactivation over time (Brynolf et al., 2014).

According to Transport Analysis (2017a), NOX emissions reductions can be met by SCR or fuel switch to LNG in the short time perspective. Even though there might be situations when engine load is low and, therefore, the function of the SCR is reduced, there are also studies stating that SCR can be designed to reduce the NOX emissions far below the Tier III level (Zetterdahl et al., 2016).

The compilation of vessels with NOX reduction certificates during 2007-2016 by Lindé and Vierth (2018), show that the most commonly used technology (corresponding to over 75% of the vessels with NOX

reduction certificates) was SCR, followed by installation of a gas turbine ( about 6% of the vessels).

There is an ongoing development of technologies to reduce NOX emissions from marine engines and there are other technologies (other than SCR and fuel shifts) that in combination can reach the Tier III levels. Kumar (2019) lists the following technologies: scavenging air moisturising or In-cylinder in combination with EGR (Exhaust gas recirculation), dual fuel engines (using LNG as a fuel) and two stage turbocharging using Miller cycle.

For the reduction of NOX emissions, the present study includes the most common technologies used; introduction of SCR and fuel switches, since these measures are judged to potentially have a significant impact on NOX emissions from Swedish shipping or shipping in nearby waters. Other measures introduced to


comply with Tier II standards are judged to have a more limited impact and were, therefore, not included in this study.

3.1.3. Emissions of PM and related regulation The regulations of NOX and SO2 emissions from shipping on a global scale, as defined in Annex VI to the MARPOL convention, has a significant impact on the amounts emitted. This regulation also reduces the emissions of PM, since the compliance measures mean utilising fuels and equipment that will lower PM emissions. The Annex VI to the MARPOL convention does not include specific regulation for PM emissions. However, there is regulation for PM from marine engine in several jurisdictions. Some examples of countries/regions with PM regulations for marine engines (or inland waterways) are; China, where there is regulation on PM for domestic shipping since July 1 2018, see (ICCT, 2017), the EU where there is regulation on PM for marine engines (inland waterways) since 2004 (EU COM, 2004) and the US which also has a quite long history of regulation for PM for marine diesel engines.

3.1.4. Emissions of greenhouse gases and related regulation Greenhouse gas emissions from international aviation and shipping fuels are treated separately in the national statistics and reporting and are not included in the national totals. The responsibility for international agreements and regulations for reducing and limiting the emissions from international marine fuels has been given to the IMO. The process to find global agreements within the IMO has been long.

There are two mandatory mechanisms in Chapter 4 of MARPOL Annex VI on energy efficiency standards for ships, with the main objective being to reduce the GHG emissions from international shipping via improved ship design and operations. The regulatory mechanisms are:

• Energy Efficiency Design Index (EEDI), for new ships

• Ship Energy Efficiency Management Plan (SEEMP), for all ships.

The EEDI is an index that indicates the energy efficiency of a ship in terms of g CO2/tonne-mile; calculated for a specific reference ship and operational conditions. The intention is that by imposing limits on this index, the IMO will be able to drive ship technologies to more energy efficient ones over time. EEDI is thus a goal-based technical standard that is applicable to new ships. Over time, the EEDI level will be tightened up; gradually leading to more energy efficient ships (IMO, 2016b).

SEEMP is a management tool and establishes a mechanism for ship operators to improve the energy efficiency of a ship during its operational lifecycle. It works according to the planning, implementation, monitoring and review of several energy efficiency measures within a continuous improvement/management cycle (IMO, 2016b).

In April 2018, the IMO agreed on a goal to reduce the GHG emissions from shipping by 50% by 2050 as compared to the 2008 level. Bouman et al. (2017) have made a review of technologies and potential for GHG emission reductions in the shipping sector and state that the second IMO GHG study (Buhaug et al., 2009) is the most comprehensive study of GHG abatement options in the shipping industry. According to Buhaug et al. (2009), shipping’s energy consumption and CO2 emissions could be reduced by up to 75% by applying operational measures and implementing existing technologies.

According to a study by Lindstad et al. (2015b), the GHG emissions from EU-related maritime transport can be reduced by up to 36% by 2030 by applying known abatement measures and some additional alternative fuels (LNG, biofuels, H2 fuel cells and cold ironing) compared to a reference scenario. Lindstad et al. (2015b) also include an assessment of the economic impacts of these emission reduction measures. For ten ship types, the costs and benefits were evaluated for a set of abatement measures. Lindstad et al. (2015b) focused on abatement measures that can be implemented in ships in the very near future. The estimated investment costs and CO2 reduction potential for measures included in Lindstad et al. (2015b) are given in


Table 4. Note that several of the measures listed in Table 4 that are not included in the present study, still are important measures that together, will contribute to increased energy efficiency of the global fleet and reductions of GHG emissions. They were omitted in this study in order to keep the number of measures to a reasonable number and abatement measures with higher estimated emission reductions are included instead.

Table 4. GHG emission reduction measures with estimated reduction potential and investment cost by Lindstad et al. (2015b) and indication on which measures that are included in the present study.

CO2 saving potential % (compared to 2030 reference)

Investment cost estimate

Considered in this study

Profit sharing 2% (for bulk carriers, general cargo and tankers)

No investment required Not included

Advanced route planning

5-10% (depending on vessel category)

50,000 – 100,000 €/vessel

Yes included.

Slow steaming (speed reductions)

2-18% depending on vessel category (not applicable for RoPax and LNG/LPG tankers)

No investment required Yes, included. Assumption of emissions and reductions described in section 3.5.5.

Efficient lighting 1.5-3% depending on ship type 50,000 – 200,000 €/vessel

Not included, .

Optimized propeller

5% for all ship types Depending on engine size and ship type.

Yes, included

Slender hull 10-30% depending on ship type ~ 10% of new-build vessel cost

Yes, included for new vessels

Ballast water reduction

2.5% for all ship types 2-5% of hull cost Not included.

Hybridization 5-10% depending on ship type Yes, included

Waste heat recovery

3.5% for all ship types except tankers

Not included.

Solar cells 0.2%, but not applicable to all ship types

Not included.

Wind power 5% but not applicable for all ship types

Flettner rotors (type of wind power) are included.

LNG as a fuel 8% for all ship types Included but other cost and emission reduction estimates used.

Biofuels (as drop in 10%)

6% for all ship types Not included. But fuel switches to renewable fuels are included.

H2 fuel cell for aux. power during sailing

2-4% depending on ship type Not included

H2 fuel cell for aux. power during sailing and in port

7-11% depending on ship type Not included.

Cold ironing 3-7% Included but emission reductions and cost estimates are not based on Lindstad et al. (2015b)

A recent report by Faber et al., (2019) lists short term measures for reducing greenhouse gas emissions from ships until 2030 and estimates the impacts of these measures on the annual CO2 emissions relative to a


business-as-usual scenario. Faber et al. (2019) conclude that the measures with the greatest potential to impact the 2030 annual emissions are different speed limiting measures, CO2 intensity and operational efficiency standards.

The EU has also worked on strategies to reduce and limit emissions from international shipping within its waters. From 1 January 2018, the EU has introduced a new regulation for the use of a monitoring, reporting and verification system (MRV) for maritime emissions of CO2. The objective is to reduce CO2 emissions from shipping in a cost-efficient way and the system is seen as a starting point for future international agreements about global measures to reduce the greenhouse gas emissions from shipping (Transport Analysis, 2016). The system includes all vessels larger than 5000 GT and they shall report fuel consumption and CO2 emissions per voyage on an annual basis. From 1 January 2019, the IMO introduced the IMO DCS (Data collection system) valid for vessels larger than 5000 GT. This system collects data on consumed fuel in total, distance travelled and hours underway under a ship’s own propulsion. The EU regulation is mandatory for all vessels calling at EU ports, whereas the IMO regulation is mandatory for vessels globally. Since ships calling into EEA ports will have to report under both the IMO and the EU systems from 1 January 2019, the EU has made an impact assessment of different options of aligning the EU MRV and the IMO DCS systems (EU COM, 2019). Although some alignment between the two systems might be introduced, the IMO system will not replace the EU system.

Abbasov et al. (2018) also assessed possible options for decarbonizing the European shipping sector. The study simplifies the number of possible solutions by saying that carbon-based alternative fuels, i.e. fuels that result in CO2 emissions from the vessels (i.e. the combustion of carbon-containing fuels) should be avoided, since there are other sectors that are more difficult to decarbonize that will need those fuels (e.g. biofuels). Instead, Abbasov et al. (2018) focus on electrification by either battery electric propulsion or propulsion relying on fuel cells using hydrogen or ammonia. Abbasov et al. (2018) emphasize that full battery electric propulsion is the most energy efficient pathway (not considering the loss of cargo carrying capacity due to space lost for accommodating the batteries) and that this technology is more readily available compared to fuel cells. According to their analysis, battery electric propulsion could be more cost-effective for small and mid-size ships, notably RoRo vessels that are mainly engaged in shortsea coastal shipping.

3.1.5. Background on selected abatement measures The sources of air emissions from shipping are the combustion of fuel in engines, including main engines (for propulsion), auxiliary engines (for power, lighting etc.) and boilers (for heating and hot water). Figure 1 categorises different options for reducing air emissions from shipping and gives examples of the abatement options (not exhaustively). In order to limit the number of measures handled within this study, a selection was made. The selected measures include only those that could have a significant impact on the emission levels in a short to medium time perspective and excluded measures that are far from technical maturity (fuel cells, ammonia) or that are already largely implemented and where additional implementation would have a small effect. The included measures are:

• Fuel switch from MGO to: LNG, LBG, fossil methanol or renewable methanol

• Full electrification by rechargeable batteries.

• Onshore power supply

• Selective Catalytic Reduction.

• Wind power (by Flettner rotors).

• Energy efficiency measures including Hybridization, Advanced route planning, Optimized propeller and Slender hull design.

• Speed reductions (Slow steaming)


Figure 1. Description of factors influencing air emissions and options for reducing emissions from maritime shipping. Source: Adjusted from Hansson (2020).

Based on the already strict sulphur requirements for shipping in Swedish waters and the surrounding waters (i.e. the SECA regions of the North Sea and the Baltic Sea) it was decided not to include measures specifically reducing sulphur emissions (scrubbers) in the present study. Such measures have already been introduced to a large extent in the shipping in nearby waters (SECA region) and there are also forthcoming stricter global regulations that will further reduce emissions from shipping outside the SECA regions. Hence, additional measures to those already in place are estimated to have a small impact on the Swedish Environmental Quality Objectives (EQO) on acidification.

Table 5 gives an overview on which abatement measures impact which emission categories. In the following sections, the selected abatement measures are described in more detail, along with their current status in Sweden.


Table 5. Description of the impacts on air emissions of the included abatement options. (+) means an increase of emissions and (–) a decrease. One sign means a more moderate impact whereas three signs means a stronger impact on the emissions.

Measure CO2 CH4 NOX SO2 PM Emission intensity reductions

Fuel switches (alternative energy carriers) LNG (switch from MGO) - + --- --- ---MGO – LBG --- + --- --- -MGO – Methanol (fossil) -d no --- --- ---MGO – Methanol (renewable) --- no --- --- ---Full electrificationb - no --- --- ---

Alternative energy sources Flettner rotors (wind power) - - - - -Onshore power supplyb - - - - -

Reducing energy needc

Ship design Slender hull - - - - -

Power and propulsion Hybridization - - - - -

Operational measure Speed reductions/ slow steaming - - - - -Optimized route planning - - - - -

a The impact on the emissions depends on which perspective that is used. Here, the focus is on TTP emissions. There might be slight differences if also considering the WTT emissions. b In a WTP perspective, it is very important to consider the emissions of electricity production. In cases where renewable electricity, or the Swedish electricity mix (which is a low carbon mix) can be used, all the emissions are reduced significantly. If using a more carbon-intensive electricity mix, emissions will not be reduced to the same extent. c Note that the options reducing the energy need in general have a lower impact on emissions. d From a TTP perspective, the CO2 emissions are reduced using methanol instead of MGO. However, from a WTP perspective CO2

emissions are increased if the methanol is produced from natural gas.

3.1.5.1. Fuel switches and full electrification – alternative energy carriers. Switching fuel can be one way of simultaneously complying with stricter sulphur regulation, NOX regulation and reducing greenhouse gas emissions (see Table 5). On the other hand, depending on which fuel a vessel is shifting to, only one or two of the abovementioned objectives might be reached. Electrification is another measure that can provide a way to comply with several regulations and to mitigate several pollutants simultaneously.

The Swedish Transport Administration (Hjalmarsson, 2018) has investigated how state-owned vessels can be converted to fossil-free propulsion in order to comply with the two national goals; to reduce GHG emissions by 70% by2030 and to have net zero GHG emissions by 2045. Nine different alternative fuels for the propulsion of vessels were analysed and Hjalmarsson (2018) concluded that the cheapest and easiest way to convert the vessels to fossil-free propulsion would be to replace the fossil fuels by drop-in fuels (Hydrotreated vegetable oil, (HVO), Fatty acid methyl ester (FAME)) or renewable diesel. However, to only use drop-in fuels is also considered to be a risky approach, since the supply of these fuels is limited and expected to be needed for other parts of the transport sector. The suggestion by the Swedish Transport Administration is therefore to do a combination of drop-in fuels, renewable diesel and petrol (small amounts) and apply technical solutions that enables the use of other biofuels. Hjalmarsson (2018) also emphasizes that the conversion should mainly be done within the regular replacement cycle of the vessels (i.e. when investing in new ones or when doing other maintenance and renovations).

Hjalmarsson (2018) judged that battery electric propulsion has the highest potential for GHG emission reductions but is not possible to implement in all vessel types. According to Hägg et al. (2018), there are several examples of electrification of vessels in Sweden today.


To start with there are several degrees and technologies of electrification of the propulsion:

• Diesel electric. In this case, the vessel has several (smaller) diesel engines connected to one generator each. The produced electricity powers one or two propulsion units, which include both an electric motor and a propeller. With this setup, one or several engines can be completely turned off. A vessel with six engines can use three of these in full effect and run on half speed, with optimal fuel efficiency and lowest possible emissions. For passenger ferries and supply vessels, that often run with varied load and speed, diesel electric propulsion gives significant environmental improvements.

• Battery hybrid. In this setup, the vessel has the possibility to store energy in batteries in order to even out the engine load. As in the diesel electric case, this also means that the engines can be run in optimal mode for a larger part of the time and thereby improve fuel efficiency and reduce emissions.

• Full electric. For vessels with frequent access to charging opportunities and with an energy and power demand that can be covered by onboard batteries, full electric propulsion is possible. This means that it is fully powered by batteries that are charged with electricity from the landside when in port. For cable ferries, it is also possible to be full electric via a cable connection to landside electricity.

Passenger ferries is a segment where the degree of electrification is currently high. In Norway, there are several examples of full electric vessels and there are also a few in Sweden. These ferries sail on well-defined and short routes. In Sweden, there are also some examples of full electric cable operated ferries. However, there are currently several ongoing projects widening the scope of electrification within marine shipping that include RoPax-ferries, inland vessels and container vessels (Hägg et al., 2018).

The most common battery type for marine applications is lithium-ion batteries. An example of full electrification of RoPax ferries in Sweden are the two vessels Tycho Brahe and Aurora of Forsea sailing between Helsingborg and Helsingör. These ferries were retrofitted with lithium-ion batteries and use recharging stations operated by fully automated laser-controlled robot arms to dock the recharging cable when at port. The vessels can also be run by the old diesel engines or in a hybrid mode if necessary.

The current trend of fuel switches for shipping in Sweden includes hybridization, electrification, conversion to LNG and one case of methanol conversion. Hjalmarsson (2018) also mentions HVO and FAME (which are biofuels available on the market today) and FT-diesel which is available in small quantities (no domestic production) as interesting alternative fuels for the conversion of the Swedish state-owned vessels in a short-term perspective. All these fuels can be used as drop-in fuels in vessels with diesel engines and, therefore, require no specific investment for the shipper. Further, Hjalmarsson (2018) also lists methanol, ethanol, LBG and electricity as interesting fuels for the shipping sector in a short time perspective. In the longer time perspective, other fuels are also on the list; ammonia, renewable methanol, renewable petrol, fuel cells using hydrogen, electro-fuels and possibly also DME (in combination with fuel cells).

LNG and methanol are not renewable fuels, but both fuels could be produced from biobased/renewable feedstock. Biogas is today used for land-based transport and potentially LBG could also be used for shipping in the future, although the quantities required is clearly a challenge. Methanol, which today is mainly produced from natural gas, can also be produced from renewable sources via several pathways. Today there are plants in Iceland, the Netherlands and Canada that are all utilising different technologies and feedstock for producing renewable methanol and there are plans for Swedish production starting in 2019.

Included measures

In this study fuel switches from MGO to: LNG, LBG, methanol (produced from natural gas) and methanol (produced from biomass) are included. The drop-in fuels were left out, as well as the fuels that are interesting in the longer time perspective according to Hjalmarsson (2018).


3.1.5.2. Alternative energy sources

3.1.5.3. SCR (NOX emission abatement)

3.1.5.4. Energy reducing measures

In addition, hybridization is included (see section on reduced energy demand), as are onshore power supply and full electrification. For full electrification, emission reductions and costs were only calculated for RoPax ferries, based on data from the Foresea ferries.

Onshore power supply

Ships at berth need electricity for loading, unloading, lighting and other onboard activities. For the vast majority of ships, this electricity is supplied by the auxiliary engines (diesel fuelled) at the ship. The air quality in port cities is impacted by the emissions from auxiliary engines for ships at berth. One way to significantly reduce these emissions is to provide power from the shoreside, so that the auxiliary engines can be turned off. This requires not only adjustments on board the ships, but also new installations in the harbour at the quay and, potentially, also for the electricity supply to the harbour (grid capacity).

Several previous studies have estimated the environmental benefits, technical solutions and the costs for onshore power supply ((EIC, (2004), Vaishnav et al., (2016), Winkel et al. (2016), Thulin (2014), Ericsson and Fazlagic (2008), MEPC (2018)) and specific case studies for specific ports, .e.g. Wilske et al. (2012), Zanetti, (2013), Molitor et al. (2017) .

According to Christodoulou et al. (2019), there are several incentives implemented mainly in the North American context, for the use of onshore power supply. In the EU, there is the Directive 2014/94/EU (2014), according to which “Member States shall ensure that the need for shore-side electricity supply for inland waterway vessels and seagoing ships in maritime and inland ports is assessed in their national policy frameworks”. Such shore-side electricity supply shall be installed as a priority in ports of the TEN-T Core Network, and in other ports, by 31 December 2025, unless there is no demand and the costs are disproportionate to the benefits, including environmental benefits”.

One complicating factor for shore side supply is that ships have different power demands (kV) and can have either 60 Hz or 50 Hz electricity systems. However, there is an ISO standard for onshore power supply. In Directive 2014/94/EU, it is stated that “Member states shall ensure that shore-side electricity supply installations for maritime transport, deployed or renewed as from 18 November 2017 comply with the technical specifications set out in IEC/ISO/IEEE 80000 5-1 standard”.

Several of the Swedish ports have onshore power supply and, as such, onshore power supply is one of the studied abatement options in this study.

Flettner rotors (wind power)

There are discussions of alternative energy sources, both solar (solar panels on deck) and wind power in different forms, e.g. kites, sails etc. In this study, Flettner rotors are included as an abatement option. Flettner rotors can be installed on the deck of vessels, where space is available. One example of a vessel with Flettner rotor in Sweden is the Viking Grace ferry, sailing between Stockholm (Sweden) and Åbo/Turku (Finland).

Lindé et al., (2019) have assessed vessels with NOX reduction certificates (between 2007-2016) and which abatement technologies that are used on board these vessels in order to reduce NOX emissions. The assessment shows that SCR was the most common technology (approximately 75% of the vessels). SCR is one of the studied abatement options in this study.

This category of abatement options includes new/improved ship designs, changes and improvements to the power and propulsion system and operational measures. This study includes measures from all three categories, which are described below.


Slender hull (improved ship design)

This measure is a design measure that reduces the energy demand for propulsion by increasing the hydrodynamic performance of the ship. The relation between hull design and fuel consumption is complex and the fuel saving potential is dependent on wave and wind conditions, speed etc. This is described in detail in Lindstad and Ingebrigtsen Bø (2018), who conclude that there is little or no effect of the slender hull design in calm waters at slow speeds, whereas the effect (fuel saving potential) is higher at higher wave conditions and higher speeds. Hence, the development of a slender hull (defined as hull shapes that modifies the main ratios between beam, draught and length to reduce block coefficients, while keeping the cargo-carrying capacity unchanged) should be made taking into consideration the routes and conditions for the use of the ship. This is being done for new vessels, but no specific figure on how common it is has been found.

Hybridization (power and propulsion systems)

As described earlier in this chapter, hybridization is a way to save energy demand for propulsion by using either batteries for storage or electric propulsion in combination with diesel engines and, thereby, being able to run the diesel engines at a more even rate (by turning off engines when the power demand is lower, instead of running on lower loads). Hybridization is especially efficient for applications using dynamic positioning or varying loads, such as the speciality vessels and tugs used in the offshore industry, but also RoPax and passenger ferries. According to Hägg et al. (2018), there are some examples of battery-hybrid ferries, e.g. two ferries operated by Scandlines on the route Rødby (Denmark) -Puttgarden (Germany) and three RoPaxes by Caledonia Maritime Assets in Scotland. However, the total number of hybridizations still seems limited.

Optimized route planning (operational measure)

When planning shipping routes, it is common to use a sequential approach where it is assumed that each ships sails at a given service speed, and then later, during the execution of the route, optimise the sailing speeds along the routes (Andersson et al., 2015). However, during recent years, new software and models are being proposed to also consider entire fleets and also to consider a more dynamic approach (e.g. Wang et al., 2020). New software that combines data on voyage optimization and weather insights can reduce fuel consumption and keep safety high. It seems that route planning is commonly used, but there is a continuous development of more advanced systems.

Speed reduction/ Slow steaming (operational measure)

Slow steaming means the reduction of speed and has been widely adopted (on a voluntary basis by shipping companies) in response to the slump in demand and oversupply of ships that accompanied the start of the economic crisis in 2008 (Todts, 2012). The increased (voluntary) use of slow steaming has resulted in a significant reduction in emissions of GHGs and air pollutants. Large reductions can be made by sailing more slowly, as the fuel consumption curve is exponentially related to speed. Even though a ship will need more time to provide the same amount of transport work and/or more ships may be required to provide the same amount of transport work per unit time, emissions will be reduced. Speed reduction is relevant for all vessel types and has the highest reduction potential for vessels on long transits and running at higher speeds (Glomeep, 2019). Regulated speed limits for shipping have also been discussed and a comprehensive study on possible options was conducted by Faber et al., (2012). More recently, Faber et al. (2019) also describe the current status of slow steaming and the potential of introducing regulatory measures (speed limits) on a regional or global scale. According to Faber et al. (2019), there has been a decrease in the operational speed of ships as a result of the oversupply from 2007 and onwards. Faber et al. (2019) also state that speed reduction can be a cost-efficient option from the shipowner´s (ship operator´s) perspective, especially if fuel prices are high.


3.2. Economic parameters and fuel prices The abatement costs of this study are calculated from a shipowner’s perspective and include only the costs and investments that are related to the adjustment of the vessel and changes in operational or maintenance aspects of the vessel (see section 2.1).

In the base, the CRF (capital recovery factor, see section 2.1) of 0.1 is used, corresponding to an estimated lifetime of the investment of 20 years and an interest rate of 7.75%. Some exceptions occur, but this is indicated in the specific assumptions given in Section 3.5.

Cost estimates have been done for five different fuel price levels: one representing the level in 2015 and four future price levels based on two price scenarios developed by the IEA, as presented in the World Energy Outlook 2019 (IEA, 2019a). The fuel prices used for the different points in time are presented in Table 6.

Estimates for 2015

The values for 2015 have been based on statistics and historical trends and the method and data for assembling these values are given in detail in the section on fuel prices in the Appendix.

Fuel price scenarios for 2030 and 2045

The fuel prices for the future scenarios are based on two fuel price scenarios given in the World Energy Outlook (IEA, 2019a) for 2030 and 2040. The values for 2040 have been assumed to be valid for 2045. The following scenarios by the IEA have been used:

• The Stated Policies Scenario (STEPS). This scenario considers policies that have already been announced (“stated”) but does not speculate on how these might evolve in the future. Policies announced by governments include some far-reaching commitments, including aspirations to achieve full energy access in a few years, to reform pricing regimes and, more recently, to reach net zero emissions in some countries and sectors. These ambitions are not automatically incorporated into the scenario, but the timing and prospects of their realization are based upon assessments by the IEA of the relevant regulatory, market infrastructure and financial constraints.

• The Sustainable development scenario (SDS) is an essential counterpart to the Stated Policies Scenario. It sets out the major changes that would be required to reach the key energy-related goals of the United Nations Sustainable Development Agenda. These are:

o An early peak and rapid subsequent reductions in emissions, in line with the Paris Agreement.

o Universal access to modern energy by 2030, including electricity and clean cooking. o A dramatic reduction in energy-related air pollution and the associated impacts on public

health.

The Word Energy Outlook (IEA, 2019a) gives fuel prices for crude oil, natural gas and coal for various regions in the world under the different scenarios. In addition, they also give CO2 prices for the trading schemes of the different regions of the world under the different scenarios. In the present study, the prices for Europe are used. Note that the fuel prices are prices at the market and CO2 costs are paid by industry and power producers in Europe. In this study, calculations are made for a case which assumes that shipping would also be included in the European emissions trading scheme (ETS). For those cases, a CO2 cost was added to the fuel price depending on the CO2-intensity of the fuel (determined by the CO2 emission factor). Only CO2 was priced, not the other greenhouse gas emissions (i.e. not CH4 or N2O). More about the assumptions regarding policy instruments in the scenarios are given in Table A4 in the Appendix.


Table 6. Fuel price scenarios based on historic fuel costs and projected costs by IEA, (2019a).

Base case 2015

Stated policy scenario 2030

Stated policy scenario 2045

Sustainable development scenario, 2030

Sustainable development scenario, 2045

Crude oil U$/bbl. (€/MWh)

51.0 (29.0) 88.0 (45.4) 103.0 (53.1) 62.0 (32.0) 59.0 (30.4)

Natural gas U$/MBtu (€/MWh)

7.0 (21.5) 8.0 (22.3) 8.9 (24.8) 7.5 (20.9) 7.5 (20.9)

HFO €/MWh 23.6 34.7 40.1 25.4 24.3

MGO €/MWh 39.1 50.2 55.6 40.9 39.9

MGO incl. CO2-charge 41.2 57.6 65.2 63.2 71.0

CO2-price €/ton 8 27 35 82 114

LNG €/MWh 41.5 27.9 28.4 24.2 24.2

LNG incl. CO2-charge 43.2 33.4 35.6 41.0 47.6

LBG €/MWh 63.1 56.0 55.3 53.7 49.5

Methanol (fossil) €/MWh 53.6 55.7 62.0 52.3 52.3

Methanol incl. CO2-charge (fossil) €/MWh

55.6 62.4 70.7 72.5 80.7

Methanol (renewable) €/MWh 80.4 69.7 68.2 65.3 57.5

Electricity, small industry (Swe) €/MWh

65 70 65 70 65

Electricity incl. CO2-charge (Swe el) €/MWh

65.3 70.97 66.23 72.9 69.1

Electricity, small industry (EU) €/MWh

110.0 115.0 110.0 115.0 110.0

Electricity incl. CO2-charge (EU) €/MWh

112.5 123.5 121.0 140.7 146.0

According to the (IEA, 2019a), the trajectory for emissions under the SDS is consistent with reaching global “net zero” carbon dioxide emissions in 2070. If net emissions stay at zero after this point, this would mean a

C above the preindustrial levels. ֯ 66% chance of limiting the global average temperature rise to 1.8

Detailed information on the assumptions made for the fuel prices not explicitly given in the (IEA, 2019a) are given in the section on fuel prices in the Appendix. .

Calculations with a CO2 cost

For some of the abatement options, calculations are made for a case where it is assumed that the shipping sector will be included in the EU ETS and, therefore, fuel prices increase depending on its carbon intensity and the CO2 price, as given by the IEA (2019a) – see Table 6.

3.3. Emission factors and related parameters As described in section 2.3, two sets of emission factors are used in this study. The first set of emission factors is presented in Table 7 and is used in the data set A calculations.


Table 7. Emission factors for different fuels given for TTP and WTP perspectives (based on Brynolf (2014) and Brynolf et al. (2014)) These emission factors were used in the data set A calculations.

Fuel HFO HFO (ECA)

MGO MGO (SCR)e

LNG LBGc MeOH (nga) MeOH (bmb)

Emissions to air during combustion in marine engines (tank to propeller)

CO2 g/MJfuel 77 77 73 73 54 0 69 0

CH4 g/MJfuel 4.5*10-

4 4.5*10-4 4.5*10-4 4.5*10-4 0.71 0.79 0 0

N2O g/MJfuel 0.0035 0.0035 0.0035 0.0035 0 0 0 0

NOX g/MJfuel 1.6 0.28 1.5d 0.28 0.11 0.11 0.28 0.28

SO2 g/MJfuel 0.69 0.047 0.047 0.047 5.6E-04 5.8*10-4 0 0

PM10 g/MJfuel 0.093 0.07 0.011 0.011 0.0043 0.0043 0.0043 0.0043

Emission to air during well to propeller (raw material acquisition, fuel production and distribution and combustion in marine engines)

CO2 g/MJfuel 83.7 85.3 80.1 81.6 62.3 27 89 17

CH4 g/MJfuel 0.072 0.074 0.078 0.080 0.743 0.97 0.011 0.042

N2O g/MJfuel 0.0037 0.0037 0.0037 0.0037 1.7*10-4 3.3*10-4 2.9*10-4 2.2*10-4

NOX g/MJfuel 1.62 0.305 1.52 0.306 0.12 0.16 0.33 0.34

SO2 g/MJfuel 0.729 0.09 0.088 0.091 0.0014 0.074 0.0021 0.048

PM10 g/MJfuel 0.094 0.072 0.012 0.013 0.0046 0.022 0.0049 0.015

a Methanol produced from natural gas. b Methanol produced from biomass, gasification of willow. c LBG produced via gasification of willow d The emission factor is valid for medium speed diesel engines and is also in line with the emission factors reported by Cooper and Gustafsson (2004). e Note that the emissions for WTP for MGO (SCR) also include emissions for the production and distribution of urea.

In the data set B, the TTP emission factors are based mainly on Carlsson et al. (2019) and complemented by some factors from Brynolf (2014). These emission factors are given in Table 8, Table 9 and Table 10. Note that Carlsson et al. (2019) only include TTP emission factors. The WTT emission factors and some TTP emissions factors from Brynolf (2014) are also used in the data set B calculations for the fuels and air pollutants that are not covered by Carlsson et al. (2019).


Table 8. Emission factors (TTP) for combustion of marine fuels as recommended by Carlsson et al. (2019) (bold) complemented by emission factors from Brynolf (2014) (non-bold). The emission factors from Carlsson et al. (2019) are recommended for the entire period (2017-2046).

Fuel CO2 CH4 SO2 PM

g /MJfuel g/kgfuel g/MJfuel g/kgfuel g/MJfuel g/kgfuel g/MJfuel g/kgfuel

HFO/IFO 76.9 3114 4.5*10-4 0.049 0.099

MDO/MGO 75.3 3206 4.5*10-4 0.047 0.026

LNG 56.6 2750 0.71 5.6*10-4 0.0037

LBG 0 0 0.71 5.8*10-4 0.0037

Methanol (natural gas based) 69.0 1380 0 0 0.0043

Methanol (willow based) 0 0 0 0 0.0043

Table 9. Emission factors (TTP) NOX for combustion of marine fuels for propulsion (main engines) as recommended by Carlsson et al. (2019).

Fuel 2017 2025b 2040 2046b

g/ MJfuel g/kgfuel g/ MJfuel g/kgfuel g/ MJfuel g/kgfuel g/ MJfuel g /kgfuel

HFO/IFO

0-10,000 1.52 61.7 48.2 21.9 0.31 12.6

10,000 – 25,000 1.81 73.3 58 26.4 0.37 15

25,000 – 50,000 2.07 83.7 66.8 30.4 0.42 17.2

50,000 – 100,000 2.10 85 67.8 30.9 0.43 17.4

>100,000 2.10 84.9 67.8 30.9 0.43 17.4

MDG/MGO

0-10,000 1.68 71.7 1.29 24.9 0.33 14.2

10,000 – 25,000 1.86 79.2 1.43 27.7 0.37 15.7

25,000 – 50,000 2.02 86 1.56 30.3 0.40 17.1

50,000 – 100,000 2.06 87.7 1.59 30.9 0.41 17.4

>100,000 2.07 88 1.59 31 0.41 17.4

LNG 7.8 g NOX/kgfuel corresponding to 0.160 g NOX/MJfuel (same value for all sizes and years)

LBGa 7.8 g NOX/kgfuel corresponding to 0.160 g NOX/MJfuel (same value for all sizes and years)

Methanol (natural gas) 8.0 g NOX/kgfuel corresponding to 0.4 g NOx/MJfuel (same value for all sizes and years)

Methanol (willow)a 8.0 g NOX/kgfuel corresponding to 0.4 g NOX/MJfuel (same value for all sizes and years)

a Carlsson et al. (2019) do not give NOX emission factors for LBG and renewable methanol, but the values were assumed to be the same as for the fossil alternatives in a TTP perspective. b The values for 2025 were used for calculating the emission reductions to 2030 and the values for 2046 were used for calculating the emission reductions to 2045.


Table 10. NOX emission factors (TTP) for combustion of MGO in auxiliary engines as recommended by Carlsson et al. (2019).

2017 2030 2045

CO2 g/MJfuel (g/kWh) 74.6 (690)

CH4 g/MJfuel (g/kWh) n/a n/a n/a

NOX g/MJfuel (g/kWh) 1.46 (13.5) 0.72 (6.7) 0.32 (2.9)

SO2 g/MJfuel (g/kWh) 0.043 (0.4)

PM g/MJfuel (g/kWh) 0.03 (0.3)

a Carlsson et al. (2019) estimates the specific fuel consumption in the auxiliary engines to 217 gfuel/kWhout for MGO/MDO.

GWP100-values (global warming potential values for a 100-year time frame) are used for summarizing the greenhouse gas emissions to kg CO2-equivalents (CO2eq. and CO2eq. incl air pollutants as described in section 2.3) and are based on Myhre et al. (2013) and Gasser et al. (2017). The GWP100 used are those that include also climate carbon feedbacks, i.e. the values given in Table 11 (along with specific explanation). The climate impact of particulates (PM) was handled by assuming that of the PM emitted, 25% is black carbon and 28% is organic carbon, whereas there is a residual of 47% being other components. Applying the same assumptionas Åström et al. (2018), (based on Corbett et al. (2010)), the residual of the PM emissions was assumed to have the same climate impact (GWP100) as SO2.

Table 11. GWP100-values used for summarizing greenhouse gas emissionsf to CO2eq. and CO2eq. incl.air pollutants. The values are based on Gasser et al., (2017) and is taking climate feedbacks into consideration.

GWP100 CO2 CH4 N2O NOX SO2 BC OC

1 34a 298f -14.7b -41c 451d -65e

a The value for methane is the value suggested by Myhre et al (2013) including climate carbon feedbacks and is also the value given by Gasser et al. (2017) using their OSCAR model for updated climate carbon feedbacks. b The factor for NOX is based on Myhre et al., (2013) and valid for EU + North Africa and scaled by 0.94 to account for updated CO2-values. c The value for SO2 is from Gasser et al (2017) based on updated values for radiative efficiency and climate carbon feedbacks. d The value for BC is based on Gasser et al., (2017) using their OSCAR model for updated climate carbon feedbacks. e OC is not included in Gasser et al (2017). The value here is the one presented as a global value by Myhre et al., (2013) but adjusted by a factor 0.94 to account for updated CO2-values (as suggested by Myhre et al. (2013)). f N2O emissions are only included in the data set A calculations and left out in the data set B calculations since these emissions from ships are small and have a negligible impact on the overall climate impact from shipping.

For some of the abatement measures, electricity is used instead of fuel (i.e. onshore power supply and full electrification). The use of electricity reduces the onsite emissions but, in a life-cycle perspective, the emissions from the production and distribution of the electricity should also be considered. In Table 12, the emission factors used for electricity are presented.


Table 12. Emission factors for electricity mixes.

CO2 g/MJ CH4 g/MJ NOX g/MJ SO2 g/MJ PM g/MJ g CO2eq./MJ (CO2eq./kWh)

Swedish electricity mixa (2015) 10 0.05 0.02 0.01 0.003 11.9 (43.0)c

European electricity mixb (2015) 87.3 0.05 0.096 0.0917 0.0054 89.2 (321.5)

a Based on Börjesson et al. (2010) and Lantz et al. (2009). The value for CO2 within parentheses is a value updated using the EEA data for 2015 (EEA, 2019d) and shown here only for comparison. b Based on EEA (2019b) for CO2 and for the other emissions on IEA (2016). Note that there were no values given for CH4, so it was assumed to be the same as for the Swedish electricity mix (which probably is an underestimate). c This value is well in line with the value given by Moro and Lonza (2018). It is also close to the value given by Lantz et al. (2019), who refer to the Swedish Energy Agency giving a value of 47.0 g CO2eq./MWh valid for 2013.

3.4. Representative vessels The two sets of representative vessels described in section 2.4 are presented here. In Table 15, the characteristics of the representative vessels based on the SHIPAIR model, using AIS-data, are presented (Windmark, 2019). This set was used in the data set B calculations. In Table 13 a description of the ship types included in Windmark (2019) is given. The selection of ship types and size classes was made so that eight of the ship types (included in Windmark (2019)) were represented and those size classes that contributed most to the total fuel consumption were included. In total, the selected ship types presented in Table 15 correspond to 80% of the domestic total fuel consumption and 91% of the total international fuel consumption6, based on the modelling by Windmark (2019). In Table 14 the total fuel consumption and distance travelled for the different representative vessels as estimated by Windmark (2019) (for the domestic) and by Trosvik et al. (2020) (for the international)7 are presented.

In Table 16 the representative vessels used in the data set A calculations are shown. The characteristics of the vessels are based on Lindé and Vierth, (2018) and selected based on the vessel category’s total fuel consumption by main engines in the Baltic Sea from Johansson and Jalkanen (2016). According to Johansson and Jalkanen, (2016), the four ship types, RoPax, General cargo, Container and Tanker ships were responsible for 82% of the fuel consumption in main engines by ships in the Baltic Sea. According to Johansson and Jalkanen (2016), the most significant emissions are also associated with these four ship types. This is also in line with data for Swedish waters as assessed by Vierth, (2018) – see Table 17.

For the onshore power supply, abatement costs and emission reductions are also made for a cruise ship in the data set A calculations. The costs and characteristics of this representative vessel are based on data given for cruise ships in Winkel et al. (2015) and Thulin (2014).

6The description‘international includes ship journeys that either start or end in Sweden and is calculated from the results of Windmark (2019) by Trosvik et al. (2020). The estimated fuel consumption for the international shipping is delimited to the SHIPAIR area, see Figure A2 in the Appendix. In the official statistics for Swedish international shipping, only journeys departing from Sweden are included, but all the way to its destination (Trosvik et al. 2020). 7 Trosvik et al. (2020) calculated the values for international travels based on the modelling by Windmark (2019).


Table 13. Description of ship types.

Ship type Abbreviation Description (according to Statcode5)

Tanker ship TA A1 - Including vessels carrying liquefied gas, chemicals, oil and other liquids

Bulk Carrier BU A2 – Including vessels carrying bulk dry, bulk dry/oil, self-discharging bulk dry, and other bulk dry

Cargo Ship CA A31, A32, A34, A38 – Including vessels carrying general cargo, passenger/general cargo, refrigerated cargo, and other dry cargo

Container Ship CO A33 – Including vessels carrying containers

RoPax RP A36 – Including vessels carrying passenger/Ro-Ro cargo

Passenger Cruise PC A37A – Including passenger cruise ships

Passenger Ferry PF A37B – Including passenger ships

Fishing Vessel FI B1 – Including vessels for catching fish and other fishing

Service Ship SS B2, B3 – Including vessels for offshore supply (e.g. platform supply ships and pipe burying vessels) and miscellaneous (e.g. research vessels, towing/pushing vessels, icebreakers, and dredging vessels)

Vehicle Carrier VE A35 – Including vessels carrying Ro-Ro cargo

Other Ships OT W, X, Y, Z – Including all other ships (W = Inland waterways, X = Non-merchant ships, Y = Non-propelled ships and Z = Non-ship structures)

Source: Windmark (2019) and IHS Markit (2019).

Table 14. Fuel consumption in tonnes and per cent of total fuel consumption for different ship types and areas based on modelling using AIS data. Source: Windmark, (2019).

Vessel categorya

Domestic Fuel consumption[ton]

International Fuel consumption [ton]

Domestic [km]

International [km]

Domestic [tonfuel/vessel km]

International [tonfuel/vessel km]

RP 61,518 (42%) 520,993 (53%) 97,8513 8,493,861 62.9 61.3

PC 813 (0.6%) 51,274 (5%) 15,794 564,018 51.5 90.9

PF 9,248 (6%) 488 (0%) 1,455,280 1,533,946 6.4 0.3

BU 8,760 (6%) 20,735 (2%) 329,096 1,008,445 26.6 20.6

CA 11,314 (8%) 98,063 (10%) 710,922 7,596,499 15.9 12.9

CO 7,025 (5%) 55,998 (6%) 159,625 1,432,083 44.0 39.1

TA 27,139 (18%) 151,283 (15%) 745,627 4,592,337 36.4 32.9

VE 9,389 (6%) 78,427 (8%) 25,0074 2,185,248 37.5 35.9

Other 12,843 (9%) 14,602 (1.5%) 2,383,605 1,537,927 5.4 9.5

Total 148,049 991,864 7,028,536 24,299,433

a RP = RoPax, PC = Passenger cruise, PF = passenger ferries, BU = bulk carrier, CA = cargo ship, CO = Container ship, TA = Tanker ship, VE = Vehicle carrier.


VTI notat 8A

-2019

Table 15. Data for representative vessels included in the calculations of emission reductions and costs according to dataset B. Most of the data are based on Windmark (2019). Note that the number of running hours are based on estimates from Parsmo et al. (2017).

Vessel type GT Machine power

category

ME average [kW}

Estimated Running hours per ship

Fuel consumption at berth per ship

Hours at berth per ship

Estimated fuel consumption per

ship (main engines)

Dom Int kW Dom Int Ship ME

SCR equip. dom

SCR equip. int

Dom [ton/y]

Int [ton/y]

Dom [h/y)

Int [h/y]

Dom. MGO

[ton/y]

Int MGO

[ton/y]

RoPax 19,156 18,630 8,000-18,000 13,879 13,372 6,000 5,500 5,500 10 7 48 1,995 13,920 13,410

RoPax 32,587 30,968 18,000-25,000 22,274 22,322 6,000 5,500 5,500 18 273 59 1,361 22,380 22,380

RoPax 35,796 35,910 25,000-40,000 29,646 29,563 6,000 5,500 5,500 41 320 221 1,914 29,650 29,650

RoPax 29,746 35,138 40,000-55,000 50,400 47,460 6,000 5,500 5,500 1597 139 3,997 3,352 47,590 47,590

Passenger Cruise 39,386 37,812 18,000-25,000 21,788 21,457 3,000 1,000 500 4 46 8 178 10,760 10,760



Passenger Cruise 103,211 105,430 >55,000 65,300 66,339 3,000 1,000 500 1 19 2 120 33,260 33,260

Passenger Ferry 266 265 <1,000 551 134 4,000 3,500 3,000 14.5 1.0 1,298 2,923 90 90

Passenger Ferry 334 334 1,000-2,000 1,416 162 4,000 3,500 3,000 5.6 0.3 348 3,541 110 110

Bulk carrier 16,269 17,205 2,000-8,000 5,730 1,356 3,000 2,750 2,500 10.2 6.4 120 190 680 680

Cargo 2,438 2,457 1,000-2,000 1,528 524 3,000 2,750 2,500 13.5 31.8 582 1,214 770 260

Cargo 5,475 5,641 2,000-8,000 3,518 902 3,000 2,750 2,500 96.6 114.6 2,078 2,570 1,760 450

Container 11,561 11,298 8000-18000 10,160 3,824 4,000 935 500 25.1 25.6 118 321 6,790 2,560

Container 150,985 148,628 >55,000 66,876 15,077 4,000 935 500 20.6 30.8 19 62 44,710 10,080

Tanker 7,786 8,131 2,000-8,000 4,551 1,751 3,300 2750 1000 22.3 22.0 81 179 2,510 970

Tanker 36,268 38,394 8,000-18,000 11,596 3,014 3,300 2750 1000 19.2 31.9 20 67 6,400 1,660

Vehicle carrier 32,141 47,231 8,000-18,000 11,724 3,439 6,000 3,000 1,500 22.6 17.3 112 153 11,760 3,450

Vehicle carrier 35,652 48,514 18,000-25,000 20,215 5,595 6,000 3,000 1,500 19.5 56.8 64 461 20,270 5,610

37

Abbreviations in table: dom. = domestic, Int = international, i.e. either starting or ending in Sweden; equip. = equipment, ME = main engines. For all representative vessels, the average engine load of the main engines was set to 0.8. In the Machine power category “All” means the summarized value for the vessel category, including all sizes – see Windmark (2019).

Table 16. Representative vessels and associated properties used in data set A calculations of emission reductions and costs.

Vessel type GTc Machine power kWc

Rpmc Estimated fuel consumption [tonne HFO]a

Estimated fuel consumption [tonne MGO]a

Estimated annual running hours

Average engine load

For ship For SCR equipmentd

RoPax 20,000 17,500 600 19,600 18,600 6,000 5,500 0.85

Bulk carrier 3,200 3,300 230 1,800 1,800 3,000 2,750 0.85

Container vessel 93,500 63,000 100b 47,100 44,600 4,000 935 0.85

Costal tanker 11,500 6,200 500 6,900 3,500 3,300 2,750 0.85

aThe estimated fuel consumption is based on a lower heating value of HFO of 40.5 MJ/kg and 47.5 MJ/kg for MGO. b This is the only vessel with a slow speed engine. c The vessel properties in the first three columns (GT, Machine power and rpm) are based on Lindé and Vierth (2018). The estimated average fuel consumption is based on Lindstad & Eskeland (2016). dThe estimated annual running hours for SCR equipment is based on Parsmo et al. (2017).

Table 17. Fuel consumption in tonnes, cubic meters and in cubic meters per vessel-kilometre 2015 for different vessel types and areas. Source: Vierth (2018), Olsson et al. (2018).

Vessel type National transports Swedish waters Economic zone

National transports

Swedish waters

Economic

Zone

Fuel (m3) Fuel (m3) per vessel-km

Bulk 5,474 (5%) 7,556 (3%) 12,711 (3%) 24.4 27.9 28.8

Container 6,355 (6%) 15,444 (6%) 29,020 (7%) 30.4 32.3 31.6

General cargo 8,639 (9%) 36,019 (13%) 54,819 (14%) 15.9 15.0 13.4

Cruise 195 (0%) 6,559 (2%) 13,195 (3%) 33.3 44.8 54.0

Ro-ro 5,126 (5%) 17,710 (7%) 32,071 (8%) 9.3 30.4 54.8

Ro-pax 40,289 (40%) 130,472 (48%) 165,835 (42%) 19.0 50.9 52.3

Tanker 13,961 (14%) 32,839 (12%) 58,465 (15%) 19.1 12.6 17.7

Other 20,188 (20%) 23,043 (9%) 24,516 (6%) 26.7 17.2 10.2

Total 100,227 269,642 390,632 19.5 25.9 25.8


3.5. Assumptions for specific abatement measures Note that for all measures it was assumed that in the base-case the vessels use MGO as fuel.

3.5.1. Onshore Power supply (OPS) Winkel et al. (2016)8 have conducted a detailed study quantifying the economic and environmental potential for onshore power supply (synonymous with shoreside electricity, SSE) in Europe through estimating in-port ship emissions and relevant energy demand. Winkel et al. (2016) concluded that cruise ships and RoRo vessels are the best candidates for onshore power supply.

Winkel et al. (2015) covers all ports in the EU and estimates parameters such as: calls per ship per year, hours at berth connected and land-side investment costs, across several ship types. The energy demand at berth is highly dependent on the ship type and cargo.

Wilske (2009) and Wilske et al. (2012) have conducted a detailed study of costs for onshore power supply in the Port of Gothenburg. A case study for a ferry service is given in Wilske (2009). Thulin, (2014) gives detailed data for costs of onshore power supply in Swedish ports. Molitor et al. (2017) also give details on costs for implementing onshore power supply, especially in terms of costs for the ports.

According to Vaishnav et al. (2016), the costs for the shipowners include costs for adjusting the vessels and reduced costs for fuel and maintenance of auxiliary engines. The adjustments include a cable from the ship to the shoreside. On the shoreside it is necessary to have switchgear and a high-voltage cable to the high voltage switchgear and transformers and switches.

In this study the abatement costs and emissions reduction potential for onshore power supply is determined using both data set A and data set B.

In the calculations based on data set A, the four representative vessels described in Table 16 are included and in addition calculations are also made for a cruise vessel. The assumptions used for the representative vessels for the OPS calculations are mainly based on Winkel et al. (2015, 2016), in combination with Wilske et al. (2012) and Thulin (2014). Data are provided in Table 18 - Table 20. However, for the RoPax ferry case, detailed data has been taken from Wilske, (2009), which includes a detailed case study for onshore power supply in the port of Gothenburg. The data used for the RoPax case are presented in Table A5 in the Appendix.

Calculations for onshore power supply are also made using data set B. The representative vessels included, and their properties are given in Table 15. Of importance for the cost and emission reductions of applying onshore power supply, one of the most significant differences between the two data sets are the number of hours at port and, thereby, also the estimated saved fuel and electricity demand.

The investment costs for the shipside installations in the data set A calculations are based on costs for retrofits taken from Wilske et al. (2012) and are presented in Table 18. It is assumed that the cost for retrofitting bulk carriers are the same as for Ro-Ro (according to Table 18).

8 The underlying report, Winkel et al. (2015), provides additional data.


Table 18. Data for costs and related parameters for the installation of onshore power supply.

Ship type Effect demand MVA

Gross tonnage

Shipsideinvestment [SEK2011]

Shipsideinvestment [€2015]

Reference Correspondingship-type

Ro-ro 1.5 25,000 4,100,000 477,220 Wilske et al. (2012) RoPax

Container 7 75,000 5,000,000 581,976 Wilske et al. (2012) Container

Tanker 1.5 11,500 4,100,000 477,220 Wilske et al. (2012)a Tanker

Cruise 15 80,000 7,700,000 896,243 Wilske et al. (2012) Cruise

Bulk carrier 1.5 n.a. 4,100,000 477,220 Wilske et al. (2012)

a Note that the tanker category in this study is represented by a coastal tanker that is much smaller than the representative tanker used in the study by Wilske et al. (2012). Therefore, it was assumed that the effect on demand would be smaller (1.5 MVA compared to 7 MVA) and, thereby, of the same size as for the Ro-Ro vessel. The estimated investment cost was, therefore, also assumed to be the same as for a Ro-Ro vessel.

In the data set A calculations, the costs were calculated by the following equations:

Annual costs for onshore power supply (shipowner) = Investment cost (ship side) *CRF-annual fuel cost savings + annual electricity costs Eq. (5)

Fuel cost savings = no of berthings/year * fuel consumption for electricity/ berthing* fuel price Eq. (6)

Annual electricity costs = electricity demand * electricity price Eq. (7)

The fuel prices and electricity price can be found in Table 6 and the CRF is explained by Eq. (4) in section 2.1.

There might also be a change in the maintenance cost between running the auxiliary engines and onshore power supply (both on the ship and at landside). In most cases, the operational and maintenance cost for the shoreside installation is neglected. However, for cruise ships that are used for only part of the year, Vaishnav et al. (2016) argue that there is an annual cost of maintenance which is not negligible, but this was not included in this study.

Wilske (2009) did not include maintenance costs either for the auxiliary engines or for the shoreside electricity connection. However, Thulin (2014) suggests a maintenance cost for the auxiliary engines to be 1.6 €2014/h, which is avoided in the case of onshore power supply. In this study, the estimate by Thulin (2014) is used, but since this is a very low cost it does not have a significant impact on the results.

In Table 19 the fuel consumption during berthing for different ship types is given. The fuel consumption at berth is not only for electricity generation and the auxiliary engines, but also the utilization of boilers is important, especially for certain types of vessel such as tankers, where the cargo might need to be warmed in order to stay liquid.

The fuel cost reduction achieved by not running the auxiliary engines was calculated based on the hourly fuel consumption at berth, the assumed fuel price and the estimated number of hours at berth. Data for this is given in Table 19 and Table 20. The electricity demand was calculated based on the assumption that the power demand would be the same as when using the auxiliary engines. The estimates of fuel consumption for electricity at berth (Table 19) was used, together with the assumption that the fuel to power efficiency of the auxiliary engines is 39%. Note that in the data set B calculations, the estimates for port calls and fuel consumption at berth are based on Windmark (2019).


Table 19. Fuel consumption for different ship types at berth. Source: van der Gon and Hulskotte (2010) and Winkel et al. (2015). Data is used both for data set A and data set B calculations.

Ship type Fuel consumption at berth (kg

fuel/1000 Gt hr)

Average berthing time

[h]a

% of fuel in auxiliary engines for

electricity generation

Kg fuel for electricity/1000 Gt/

berthing

Oil tankers 19.3 28 18% 97.27

Chemicals and other tankers 17.5 24 15% 63

Bulk carriers 2.4 52 (17) 64% 80

Containers (including reefers) 5 21 (19) 45% 47

General Cargo 5.4 25 (~6) 66% 89

Ferries and RoRo 6.9 24 (28) 50% 83

Cruise 9.2 28 75% 193

a Values within parentheses are based on data from Swahn et al. (2015).

Table 20 Estimates of stop-over times and number of port calls per week used in data set A calculations.

Stop-over time [h/port call]

Reference (stop-over) Port calls perweek

Reference (port calls)

Ro-Ro/RoPax n.a.a 4 Wilske (2009)

Bulk carrier (small) 17 Swahn et al. (2015) 2 Own assumption

Container 21 Winkel et al. (2015) 2 Own assumption

Tanker 28 Winkel et al. (2015) 2 Own assumption

Cruise 28 Winkel et al. (2015) 2 Own assumption

a Wilske (2009) instead gives an estimate of the electricity demand per call of 16,800 kWh/call and an energy conversion of 0.20 kg bunker fuel /kWh electricity.

In the Ro-Ro case, data from Wilske (2009) is used to estimate the amount of reduced fuel consumption per call. For the other ship types, data from Winkel et al. (2015) is used.

The estimated times at berth are based on data from Winkel et al. (2015). Note that in order to make estimates of the advantages of onshore power supply and the conversion of a vessel, it is necessary to estimate/make assumptions regarding how many ports will offer an onshore power supply. For vessels with only a few destinations, there is a higher probability of being able to take advantage of the full potential or benefits of a retrofit, whereas the situation might be different for vessels with many destinations. In this study it was assumed for the calculations that the retrofit of a vessel will enable full onshore power supply at all stops.

The emission reductions are calculated using emission factors for MGO (see Table 8) and emission data for (i) a Swedish electricity mix and (ii) an European electricity mix, as presented in Table 12.

Onshore power supply also includes investments on the shoreside. These investments include costs for equipment on land and maintenance. These costs are not included in the abatement cost calculations in this study, but some estimated costs are assessed here. Molitor et al. (2017) estimated the shoreside costs for the Gothenburg case to be approximately 5-6 MSEK/MVA based on connections for all quays in the port. Winkel et al. (2015) estimates the costs for land-side investment according to Table 21.


Table 21. Cost estimates for land-side investments for onshore power supply based on Winkel et al. (2015.)

Type of port Shore side investment (total) €2015/quay

Power capacity Electricity consumption Mega Volt Ampere (MVA)

Reference

Inland container port 20,000 Two connections per quay (each 25 kW, á 10,000 €)

50 kWh Winkel et al. (2015)

Inland bulk port 100,000 10 quays, each connection 25,000 kW, ~10,000 € each

250 kWh Winkel et al. (2015)

Bulk ports 425,000 2 MW 2 MVA Winkel et al. (2015)

Container ports & liquid bulk ports

1,725,000 2-3 MW 7 MVA Winkel et al. (2015)

Cruise ports 3,725,000 12 MW 12 MVA Winkel et al. (2015)

RoPax 220,000 Wilske (2009)

For the calculations according to data set B, the investment cost for the shipowner is based on the data given by Molitor et al. (2017), stating that the cost is dependent on the power demand varying between 0.7-1.5 MSEK/vessel/yr. These numbers are recalculated to the values in Table 22. These values are in line with the values given by Thulin (2014). Table 22 also shows which ship types are assumed to have which power demands (and, thereby, yields the investment cost for onshore power supply).

Table 22. Investment cost for retrofitting vessels for onshore power supply based on Molitor et al. (2017).

Power demand Total investment cost [€2015] Vessel categories

1.5 MVA 500,591 RoPax, Passenger ferries, Cargo ships, Tankers and Vehicle carriers

2 MVA 550,591 Bulk carriers

7 MVA 600,000 Container ships

15 MVA 1,072,696 Cruise

The characteristics of the vessel types for the data set B include estimated time in port (hours per year) and fuel consumption (see Table 16). These data are used and combined with the estimates of how much of the fuel consumption at berth that is used for electricity production (Table 19). The value for ferries and RoRo (Table 19)is used for RoPax, passenger ferries and vehicle carriers.

3.5.2. Fuel switch and full electrification (alternative energy carriers)

3.5.2.1. Fuel switches The investment costs for fuel switch are based on Grahn et al. (2013) and Taljegard et al. (2014) and include fuel shift from MGO to LNG, LBG (produced from willow), conventional methanol produced from natural gas and renewable methanol (produced from willow)9. Note that all these switches are calculated as the difference in investments for a new ship running on MGO as compared to a new ship running on any of the other fuels, and not for retrofits. In general, studies (e.g. Lindstad and Eskeland, 2016)) state that retrofitting, e.g. for LNG propulsion, is significantly more expensive than the investment in a new ship. There are several reasons for this; one being the fact that an already existing vessel has a shorter lifetime than a new ship and, hence, the investment needs to be annualized on a

9 Grahn et al (2013) does not specify in which way the LBG or methanol was produced. However, if using willow as the raw material (as stated by Brynolf (2014)) it was assumed that the production process is via gasification.


smaller number of years, i.e. increasing the annual cost significantly. Another reason is that the fuel tanks need space and, hence, cargo carrying capacity is lost. In addition, the time for installation can also contribute to significant cost. However, this can be avoided by coordinating with other maintenance activities. The costs for a fuel switch are calculated as the additional cost for a new vessel with LNG propulsion (or methanol) compared to investing in a conventional vessel with MGO propulsion. Data for the cost estimates of switching to Methanol or LNG are given in Table 23.

The fuel consumption was determined by the following equation:

Fuel consumption [tons/y] = Main engine capacity [kW] * annual running hours [h/y] * average engine load * specific fuel consumption [MJfuel/kWhprop]/specific energy content of fuel [MJ/kgfuel] /1000 [kg/ton] Eq.(8)

The heating values for the different fuels are given in Table A6 in the Appendix and the specific fuel consumption was set to 8.9 MJfuel/kWhprop, based on Andersson and Winnes (2010).

Table 23. Investment costs for fuel switches based on Grahn et al. (2013).

Short sea vessel cost, mostly passenger vessels, ferries and offshore vessels <15000DWT

Deep sea vessel cost, larger ships suitable for intercontinental trade,

>15 000 DWT

Container vessel cost, all types of container vessels

Propulsion system

ICE/FC (€2015/kW]

Storage tank (€2015/GJ)

ICE/FC [€2015/kW]


ICE/FC [€2015/kW]


MGO ICE 556 24 477 20 397 20

Methanol ICE 572 40 492 32 413 32

LNG ICE 806 87 691 64 576 64

Note that the values given by Grahn et al. (2013) have been recalculated from US$2012 to €2015 using exchange rates and HCPI.

The abatement costs for fuel switches were calculated as:

Abatement cost = investment cost * CRF+ change in fuel costs Eq. (9)

Change in fuel costs was calculated based on the annual fuel consumption (from data in Table 16) and the difference in fuel prices between MGO and the new fuel. Hence, it was assumed that there would not be a significant change in fuel consumption for changing fuel.

The emission estimates for the different fuels are based on Brynolf (2014) (as described in section 3.3). However, there are also other studies summarizing emissions from marine engines and fuels such as Carlsson et al., (2019), Stenersen and Thonstad (2017), Ushakov et al. (2019).

According to Stenersen and Thonstad, (2017), by December 2016, there were approximately 120 vessels worldwide running on LNG, covering many different vessel types but being most common for passenger ferries, offshore and LNG carriers. There are four different gas engine concepts with different combustion characteristics, with different effects on efficiency and exhaust emissions and available in different sizes (Stenersen and Thonstad, 2017):

• Lean-burned spark ignited engines (LBSI-engine), medium-high speed (0.5-8 MW).

• Low pressure dual-fuel engines (LPDF-engine), medium speed, 4-stroke (1-18 MW).

• Low pressure dual-fuel engines (LPDF-engine) slow speed 2-stroke (5-63 MW).

• High pressure gas injection (HPDF engine), slow speed, 2-stroke (> 2.5 MW).

Ushakov et al. (2019) state that using LNG as the main fuel is one of the most promising solutions for fulfilling the Tier III NOX standards, with LBSI and LPDF being the primary choice of engine


concepts. According to Sharafian et al. (2019), the HPDF engine technology is only available for the large low-speed engines used in ocean going vessels. For smaller vessels such as ferries, MS-LPDF and LBSI engines are used.

Stenersen & Thonstad (2017) explain that there are several reasons for methane slip (emissions of unburnt methane from combustion) from gas engines and there is a trade-off between methane and NOX emissions. However, they also state that it is possible to significantly reduce methane emissions and still fulfil the Tier III NOX requirements.

Stenersen & Thonstad (2017) performed measurements of exhaust emissions from gas-fuelled engines and estimated emissions based on engine manufacturers’ tests (test-cycles). Their results are in line with the emission factors given in Brynolf (2014) and Brynolf et al. (2014).

Ushakov et al. (2019) provides updated emission factors for LBSI and LPDF engine groups, based on onboard emission measurements, that can be used for more realistic exhaust emission estimates for new-build vessels. They claim that there has been a breakthrough in gas engine technology achieved during 2010-2017 where methane emissions have been reduced by more than 50% for both LBSI and LPFD concepts, while keeping the same low levels of NOX. The values presented and recommended by Ushakov et al. (2019) is similar to the values given by Brynolf (2014), which are used in this study.

Table 24. Specific emission factors for marine engines using LNG based on Ushakov et al. (2019).

LBSI engines (built after 2010) LPDF engines (built after 2013)

CO2 CH4 NOX CO2 CH4 NOX

g/kgfuel g/MJfuel g/kgfuel g/MJfuel g/kgfuel g/MJfuel g/kgfuel g/MJfuel g/kgfuel g/MJfuel g/kgfuel g/MJfuel

2,687 55.3 23.2 0.48 7.3 0.15 2630 54.1 40.9 0.84 11.3 0.23

Proposed averages for marine gas engines

CO2 CH4 NOX

g/kg fuel g/MJ fuel g/kg fuel g/MJ fuel g/kg fuel g/MJ fuel

2,662 54.8 31.0 0.64 7.5 0.15

For the mentioned fuel switches calculations were made both using data set A and data set B. For data set B there are calculations for the future fuel price scenarios both with and without a CO2 cost.

3.5.2.2. Full electrification According to Hägg et al. (2018) passenger ferries is the only ship segment (except for submarines) with examples of full electrification for propulsion. From a Swedish perspective the existing examples were (in 2018) the Tycho Brahe and Aurora RoPaxes and some line ferries electrified by cables. The RoPax segment is a large segment (in terms of e.g. total fuel consumption), whereas line ferries are limited in numbers and mostly run by the Swedish Road administration. In this study, the Tycho Brahe and Aurora of Forsea, that sail between Helsingborg and Helsingör are used for estimating costs and emission reductions for a RoPax vessel. Data for the calculations are given in Table 25. The emission reductions are calculated both for a case where the tank-to-propeller emissions of the fuel are considered and a case where the well-to-propeller emissions from the reduced fuel consumption are included. In the WTP case, the emissions from the electricity production and the battery production are also included. Two different cases of electricity mixes are included, i.e. the Swedish electricity mix and the EU electricity mix (see Table 12 for emission factors of the electricity mixes).

Full electrification calculations are made for both the emission factors of data set A and for data set B. In the data set B calculations, the CO2 footprint for the battery and battery pack production are also included in the WTP calculations. The data used for the battery and battery pack is based on Emilsson and Dahllöf (2019) – see Table 25.


The CRF factor for the full electrification is set to 0.15, based on the assumption that the investment would have a lifetime of 10 years and an interest rate of 7.75%10. In addition, it is assumed that the batteries would need to be changed after 5 years (at the investment cost as stated in Table 25). For the battery investment, the CRF factor used was 0.25 with a 5 years lifetime and 7.75% interest rate.

Table 25. Data for abatement cost calculations for full electrification of RoPax ferry.

Parameter Reference

Investment cost for retrofit: 150 MSEK /Vessel Tiger (2018)

Landside investments: 21 MSEK (on Swedish side) Bondelid (2018)

Battery capacity: 4160 kWh Ekberg (2018)

Recharging capacity 11 MW DEIF (2018)

Recharging time per crossing: 5-9 mins Ekberg (2018)

Crossing time: 20 mins Ekberg (2018)

Estimated lifetime of batteries: 5 years (Korsgren, 2019) and (Personal communication Jens Ole Hansen, (2019-11-20)

Cost of batteries (per kWh): 300 US$2015/kWh based Nykvist & Nilsson (2015)

Reduced fuel consumption; 0.2 m3/ crossing Bondelid (2018)a

Electricity demand: 1,175 kWh/ crossing Ekberg (2018)

CO2 footprint of battery pack; 1400 – 1700 tonnes (for two ferries, i.e. 2* 4160 kWh)

Jens Ole Hansen (pers. com, 2019-11-20).

CO2eq. footprint for production of battery and pack: 106 kg CO2eq/kWh battery capacityb

Emilsson and Dahllöf (2019)

a This is in line with the reduction potential as given by Jens Ole Hansen that 18,000 tons of CO2 could be saved by the conversions of the two ships. However, during the first year a 14,000 ton reduction was achieved, corresponding to more than 75% of the reduction potential (personal communication by Jens Ole Hansen 2019-11-20). b The value for CO2eq. emissions from battery and pack production was the upper end of the interval given by Emilsson and Dahllöf (2019). However, the value is significantly lower than what previously have been reported (150-200 kg CO2eq./kWh). The old values are more in line with the values given by Jens Ole Hansen (pers. comm. 2019-11-20).

For the calculations with the 2030 and 2045 price scenarios, it is assumed that the price of batteries will decrease and that the investment cost for the installation on the ship will decrease by 50% until 2030. The assumptions applied in the calculations are presented in Table 26.

Table 26. Assumptions regarding development of battery costs (lithium ion).

Year €/kWh Reference

2015 270.5

2030 52 (61 U$/kWh) Bloomberg NEF (2019)

2045 52 Tsiropoulos et al. (2018), Bloomberg NEF (2019)

3.5.3. SCR In this study, emission reductions and costs for applying SCR (selective catalytic reduction) to reduce NOX are calculated using the two different data sets A and B.

Cost estimates of SCR technology have been assessed in several previous studies e.g. by SMA (2009) Johansson et al. (2010), Winnes et al. (2016), Transport Analysis (2016). Some studies also estimate

10 The same interest rate as for all the other investments in the study.


emission reductions and cost benefits for NOX abatement, e.g. Åström et al. (2014), Yaramenka et al. (2017) and Åström et al. (2018). Parsmo et al. (2017) analyses NOx controlling policy instruments in addition to the NECA region of the Baltic and the North Seas, including the potential for NOX

emission reduction and technology costs. The policy instruments analysed by Parsmo et al. (2017) are; a larger NECA region, slow steaming (speed reduction); financial investment support; environmentally differentiated port dues; CO2-tax; NOX-tax and refundable emissions payment (NOX-fund). Parsmo et al. (2017) conclude that the most effective policy instrument would be the refundable emissions payment scheme (similar to the Norwegian NOX-fund). The NOX-tax had a significant impact on the emissions, but reductions came at higher costs for shipowners.

The investment cost estimates and the estimates of urea consumption and catalyst replacement cost, along with labour demand and labour costs in this study, are based on the values given by Yaramenka et al. (2017), which in turn mainly are based on Winnes et al. (2016). Other important estimates for calculating the cost and emissions reductions of SCR are the estimated hours in operation, which are based on Parsmo et al. (2017) for each of the ship types. Urea costs are estimated based on Roser and Ritchie (2019). The data used for the cost calculations are presented in Table 27, Table 16 and, for the NOX emission factor with SCR is the one given by Brynolf (2014), see Table 7. For SCR, it should also be noted that there is a significant increase in NH3 (ammonia) emissions due to the use of urea. However, ammonia is not included among the air pollutants analysed in this project.

Table 27. Parameters for the cost estimates for SCR

Cost parameters Unit New SCR Retrofit SCR Reference

on Tier II on Tier I

Investment cost €2015/kW 66 96 96 Yaramenka et al. (2017)

Costs for operation and maintenance

Urea consumption kg/MWh 11.5 11.5 11.5 Yaramenka et al. (2017)

Urea cost €2015/kg 0.25 0.25 0.25 Roser and Ritchie (2019)

Catalyst replacement cost €2015/MWh 0.6 0.6 0.6 Yaramenka et al. (2017)

Labour demand h/year 8 8 8 Yaramenka et al. (2017)

Labour cost €2015/hour 39 39 39 Yaramenka et al. (2017)

In this study, the abatement costs and emissions reductions for the introduction of SCR in new vessels and retrofits of Tier II-engines are calculated. Tier I-retrofits are not considered for the following reasons: these vessels are quite old (older than 2009) and the cost for the retrofit would then have to be paid back in a shorter time perspective.

3.5.4. Energy efficiency measures and wind power In this section, the specific assumptions and data used for the calculations of the emission reductions and the abatement cost for energy reduction measures, together with the use of wind power (Flettner rotors), are presented.

3.5.4.1. Optimised propeller The investment cost for an optimized propeller and the emission reductions are based on data for the different ship types by Lindstad et al. (2015b). The values given by Lindstad et al. (2015b) are converted to values per installed engine capacity and then adjusted to the engine sizes of the representative vessels used in the calculations of this study. The values used are presented in Table 28. It was assumed that the reduction in CO2 emissions, as given by Lindstad et al. (2015b), is directly proportional to a reduction in fuel consumption.


Table 28. Data used for cost and emission reduction calculations for optimized propeller (data set A and data set B calculations).

Vessel category RoPax Passenger ferries

Passenger Cruise

Bulk Carrier

Cargo Container Tanker/ coastal tanker

Vehicle carrier

Investment cost for optimized propeller per kW installed engine capacity

34 €/kW 34 €/kW 34 €/kW 44 €/kW 68 €/kW 22 €/kW 54 €/kW 34 €/kW

Reduced fuel consumption

5% 5% 5% 5% 5% 5% 5% 5%

3.5.4.2. Slender hull A so-called slender hull is assumed to be appropriate only for new vessels and, therefore, it is assumed that these vessels also have Tier III NOX engines. There are, however, different sources for the investment cost estimates. Lindstad et al. (2015b) give investment cost estimates for different vessels (see Table 29), but also state that the approximate investment is 10% of the cost of a new vessel. The cost estimate for a new vessel (for a specific category and per kW of installed engine capacity) is based on data given by Taljegard et al. (2014) and is scaled according to the vessels used in this study. The calculated values differ significantly from the values given by Lindstad et al. (2015b), although the size of the different vessels in the specific categories do not differ significantly. In general, the estimates based on Taljegard et al. (2014) are higher and the annualized investments will be higher than the costs saved annually due to fuel savings. For several of the cases, the annualized costs will be negative if using the investment costs from Lindstad et al. (2015b). In Table 29, the estimated investment costs for a slender hull are given. For the abatement cost calculations in this study, the estimates based on data from Taljegard et al. (2014), as presented in Table 29, was used for the data set A calculations. The investment costs for new vessels and assumed fuel consumption reductions for the data set B calculations are presented in Table 30. In the data set B calculations, it was also assumed that the costs related to the slender hull design was 10% of the total investment cost for the new vessel (based on Lindstad et al. (2015b) and the vessel investment costs were based on Taljegard et al. (2014).

Table 29. Cost estimates of slender hull design and implementation for new vessels of different types based on different sources.

Vessel type Estimated investment cost € Used estimate Assumed reduction

Based on Lindstad et al.

(2015 b)

Based on general rule from Lindstad et al (2015b) and investment for new vessel from Taljegard et al. (2014)

For investment costs in this study Of fuel

consumption

RoPax 1,046,000 11,304,021 (10% of 7300 U$2013 /kW) Taljegard et al. (2014) 10%

Bulk carrier 2,960,000 2,131,615 (10% of 7300 U$2013/kW) Taljegard et al. (2014) 30%

Container 2,540,000 30,660,220 (10% of 5500 U$2013/kW) Taljegard et al. (2014) 10%

Coastal tanker

1,240,000 4,004,853 (10% of 7300 U$2013/kW) Taljegard et al. (2014) 20%


Table 30. Cost estimates for new vessels used for estimating the cost for slender hull design for different ship types and related estimates of emissions reductions used in data set B calculations.

RP PF PC BU CA CO TA VE

Emission reductiona 10% 10% 10% 30% 20% 10% 20% 15%

Investment costs Short sea ship (DWT <15,000) Deep sea ship (DWT >15,000) Container ship

US2013/kW engine power 7,300 7,000 5,500

€2015/kW engine power 5,530 5,300 4,160

a The emissions reductions are assumed to correspond directly to a reduction in fuel consumption of the same magnitude.

3.5.4.3. Wind power (Flettner rotors) Cost estimates and emissions reduction estimates for wind power are given for several ship types by Lindstad et al. (2015b). The cost estimate given by Lindstad et al. (2015b), of 4000 €/kW, is said to be within the same range as Hekkenberg (2013). However, Hekkenberg (2013) is not clear on what type of wind power the cost estimates are given for, and the range given is 1000–1500 €/kW and, hence, Lindstad et al. (2015b) is not within this range. Instead, this study uses estimates from IMO & DNV GL (2019), where investment cost estimates for Flettner rotors are given in the range of $400,000– $950,000, depending on the size of the rotor. The technology is said to be suitable for at least: tankers, bulk carriers (some), general cargo and RoRo (some) vessels. Further, the fuel savings of Flettner rotors will depend on the weather conditions; according to IMO & DNV GL (2019) the range is between 3–15%. The investment cost estimates and fuel consumption reduction estimates used for the data set A calculations are presented in Table 31. For the data set B calculations, it is assumed that an installation of wind power (Flettner rotors) would include two rotors with an average cost of 675,000 US$/rotor (average value from IMO & DNV GL, (2019)) and that the fuel savings would be 5% of the total fuel consumption (based on Lindstad et al. (2015b)). For the data set B calculations, it is assumed that the Flettner rotors would be feasible for RoPax vessels, passenger cruise ships, bulk carriers, general cargo, tankers and vehicle carriers.

Table 31. Input data for abatement costs and emissions reductions for Flettner rotors (wind power) in data set A calculations.

Vessel type RoPax Bulk carrier Coastal tanker

Investment cost €/vessel 1,800,000 1,800,000 1,080,000

Fuel consumption reduction 5% 5% 5%

3.5.4.4. Advanced route planning For advanced route planning, cost estimates and emissions reduction data from Lindstad et al. (2015b) are used. The investment cost was estimated to be 50,000 €/vessel for short sea shipping and 100,000 €/vessel for deep sea shipping. At the same time, the fuel consumption was estimated to decrease by 5% for short sea shipping and 10% for deep sea shipping (based on the assumption that the fuel consumption was directly related to the CO2 reductions given by Lindstad et al. (2015b)). Ships with GT <15000 were assumed to be short sea shipping and the rest to be deep sea shipping. All container ships are considered to be deep sea shipping. The following ship types were not considered to be applicable for advanced route planning; RoPax, passenger ferries and cruise ships.

3.5.4.5. Electrification - Hybridization The investment cost for hybridization is estimated to be an additional 25% of the cost of the main engine based on Lindstad et al. (2015b). By hybridization, Lindstad et al. (2015b) mean installing engines of different sizes and batteries so that the variation in load can be reduced (by running engines


at high load and charge batteries or switch engines off and use power from the batteries) and introducing power management systems with a more balanced focus on reducing emissions and energy consumption while maintaining high safety standards. According to Lindstad et al. (2015b) the potential for reducing CO2 emissions is approximately 5% for most ship types (dry bulk, General Cargo, Container, RoRo and vehicle carriers, oil- and chemical tankers, LNG and LPG tankers) but higher for RoPax, i.e. 10%. In this study, it is assumed that the CO2 saving potential is directly related to the saving potential of fuel, i.e. the fuel saving potential is 5% for included ship types, except for RoPax and for passenger ferries (which are assumed to have similar conditions as RoPaxes) for which the fuel reduction is assumed to be 10%. The cost estimates for main engines are based on estimates for investments and engine capacities given by Lindstad et al., (2015b) and Lindstad and Eskeland, (2016). The specific investment costs (€/kW engine capacity), given in Table 32, are used for scaling to the representative vessels used in this study.

Table 32. Investment costs for engines used for hybridization costs. Mainly based on Lindstad et al. (2015).

Vessel category RP PF PC BU CA CO TA VE

Investment cost for new engine [k€/vessel] 6,700 6,700 6,700 6,880 4,450 16,720 9,040 5,350

Specific investment cost [€/kW engine capacity] 604 604 604 529 1,483 317 413 535

3.5.5. Speed reduction/ slow steaming According to Faber et al. (2012), there is a rule-of-thumb saying that engine power is related to ship speed by a third power function. This means that a 10% reduction in speed results in an approximate 27% reduction in shaft power requirements. However, a ship sailing 10% slower will need approximately 11% more time to cover the same distance. If this is considered, the rule of thumb is a quadratic relation between speed and fuel consumption so that per tonne-mile, a 10% decrease in speed will result in a 19% reduction in engine power (energy demand/fuel consumption).

The rule-of-thumb has a limited applicability, since the specific fuel consumption of engines varies with engine load. However, if engines are to be operated at lower loads continuously, they can be de-rated so that their specific fuel consumptions remain constant or improves.

Since the engines will run on a lower load, the specific emissions of NOX and BC might change, not only due to reduced fuel consumption (see Faber et al. (2012)). Faber et al. (2012) include an investment cost (fixed cost) for modifying the engine to be optimized for slower speeds. Faber et al. (2012) also suggest that there will be a need for more ships in order to compensate for the transportation work that is lost due to the slower speeds. In Faber et al. (2017), this is taken into consideration, along with the reactivation of laid-up and idle ships, by showing the impact on emissions on a fleet basis. Other costs that are discussed but not quantified is the need for changes to the logistical chains, since ships will then spend more time at sea, and the decreased demand for developing fuel saving technologies. In this study, only the cost for adjusting the engine to run at slower speeds is included.

For the calculations in this study, the simple rule-of-thumb relating speed reduction to a reduction in fuel consumption has been used to estimate the cost and emission changes. This means that there is no consideration given to additional changes in the specific emissions of NOX and black carbon due to running on lower engine loads (in general the emission factor of NOX falls when the engine load is reduced up to a point, while the emission factor for BC varies significantly with different engine loads). Other effects, as listed in Faber et al. (2012), e.g. loss of propeller efficiency, loss of turbo charger efficiency, increased fouling of hull and propeller due to reduced velocity and flow velocities, lost efficiency in heat recovery systems, increase of vibrations due to sailing in off-design conditions, increased lubrication oil demand, etc., have also not been considered in our calculations . It should be noted, however, that it is concluded by Faber et al. (2012) that a 10% reduction in fleet average speed


results in a 19% reduction of emissions, after accounting for the emissions of additional ships needed to deliver the same amount of transport work and accounting for the emissions associated with building the additional ship. The 19% reduction is exactly the expected reduced fuel consumption if using the rule-of-thumb. However, in the more recent report the estimated emissions reductions are more moderate; Faber et al. (2017) estimate that the relative CO2 emissions reduction potential for a 10% speed reduction on a fleet basis would be 13% on average (with somewhat varying reduction percentages for the different ship types).

In this study, calculations of costs and emissions reductions due to speed reductions are made for the ship types and assumed speed reductions given in Table 33. Since the emissions reductions and costs are calculated per vessel, the effects on the need for additional ships were not included. However, if the same emissions reductions should be achieved on a fleet level, the speed reductions need to be larger, which is also shown in Table 33. Calculations were made using data set B.

Table 33. Assumptions used for speed reduction (slow steaming) calculations in this study.

Vessel category Investment cost €2015/vessela

Estimates used for calculations in this study

Assumed speed reduction (per ship)

Reduced fuel consumptionb

Required speed reduction to achieve the corresponding reduced fuel consumption on a fleet basisc

RoPax 175,845 5% 9.75% 7-9%

Passenger Cruise

175,845 5% 9.75% 7-9%

Passenger Ferries

175,845 5% 9.75% 7-9%

Container 175,845 5% 9.75% 7-9%

Bulk carrier 175,845 15% 27.7% ~20%

Cargo 175,845 15% 27.7% ~20%

Container 175,845 15% 27.7% 25%

Tanker 175,845 15% 27.7% ~35%

Vehicle carrier 175,845 15% 27.7% 20-25%

a Investment cost for optimizing engines for slower speeds, based on Faber et al (2012). No costs for additional need for ships due to slower deliveries etc. are considered. b The rule-of-thumb presented by e.g. Faber et al. (2012) was used to estimate the approximate reduction in fuel consumption. c Estimates based on Faber et al. (2017). It is assumed that the reduced fuel consumption is directly proportional to the reductions of CO2 emissions.


4. Results In the Supplementary material to this report (Holmgren, 2020), all the abatement costs and emissions reductions calculated using the data set A and data set B are given. In the sections below the results of data set A and data set B calculations are presented in summary.

4.1. Onshore po wer supply Onshore power supply, i.e. the connection of the ship to land-based electricity while at berth, results in a net reduction of fuel and thereby reduces all emissions. The cleaner the electricity mix, the larger are the emissions reductions. Swedish electricity production has low carbon intensity, so there is only a small difference between the TTP and WTP case, whereas the EU electricity mix is more carbon intensive and, hence, there is a larger difference between the TTP and WTP case using this electricity mix.

As can be seen in Table 19, there is a significant variation in how much fuel that is used for electricity consumption between different ship types. The absolute amounts of emissions saved by different vessels varies significantly, which is shown in Figure 2 where the results for data set A calculations are given. Cruise ships are large and use a high share of the fuel consumption at berth for electricity production and, therefore, the potential for saving emissions by OPS is high. The saving potential for the bulk carrier is very low, which is due to the small size of this vessel.

Figure 2. Emission reduction potential (summarised into CO2eq. and CO2 eq. incl air poll) due to utilising onshore power supply for representative vessels. Negative emission changes mean reductions compared to the case without onshore power supply. Calculations based on data set A.

The results of the data set B calculations of emissions changes due to implementing onshore power supply are presented in Figure 3. Note that only one size category per ship type is chosen to represent the results in Figure 3, (for which see Table A7 in the Appendix). To see the results for all size classes, see the Supplementary data. The results show a significant emissions reduction potential for RoPax and comparably low values for the other vessel categories (cargo is significantly higher than the others). The difference in emissions reduction potential is mainly due to the fuel consumption at berth, see Table 15.


Figure 3. Emissions reduction potential for greenhouse gases (and climate impact) (summarised into CO2eq. and CO2 eq. incl air poll) and NOX due to utilising onshore power supply for different representative vessels. Negative emissions changes mean reductions compared to the case without onshore power supply. Calculations based on data set B.

Figure 4. Specific abatement cost for onshore power supply according to data set A calculations for the year 2015.


The calculated specific CO2 and CO2eq. (including CO2, CH4 and N2O) abatement costs for onshore power supply for data set A are presented in Figure 4. The specific abatement costs are negative for cruise vessels, container ships and RoPax vessels. For Coastal tanker the costs are positive but small and for bulk carriers the costs are significantly higher. The reason for the higher costs for bulk carrier is that this is a small ship and, hence, the cost is high in comparison to the potential fuel savings. Figure 4 also shows that, in general, the costs are higher if considering the electricity to be EU-mix; since the EU mix has higher emissions compared to the Swedish electricity mix and, therefore, results in lower emissions reductions.

In Figure 5 and Figure 6 the specific abatement costs for data set B calculations are summarised. The costs for cruise ships and passenger ferries are very high. The main reason for this is the few number of hours at berth annually for these two categories (data from Windmark (2019) - see Table 15), and thereby the low potential for fuel savings.

Figure 5. Span for specific CO2- abatement costs for onshore power supply for passenger cruise and passenger ferries. Estimates based on data set B.

Minimum values are the lowest values among the size classes of each ship type. There is one minimum value for domestic vessels and one for international and together they give the span in Figure 5 and Figure 6. The maximum values are identified in corresponding fashion.

The costs for OPS are calculated for the different price scenarios (see Table 6). However, the price scenarios do not have a significant impact on the results. In general, it is only profitable for RoPax vessels. Only in the case of STEPS 2045 (TTP) is it also profitable for one of the cargo vessel size classes (2,000-8,000 kW).


Figure 6. Variation in specific CO2 abatement cost for onshore power supply for different vessel categories. The abatement cost varies with the number of hours in port and the size of the ship. The span for the values is between maximum and minimum values for domestic and international vessels.

Difference between data set A and data set B calculations

There are differences in the results between the data set A and B calculations. In general, the data set A calculations show lower costs and a higher degree of profitability for onshore power supply. There are several reasons for that; the investment costs are somewhat lower and the fuel saving potential is generally higher, due to the generally larger number of hours at berth assumed. In the data set A calculations, available data from the literature on the length of each berthing is used, but there were no estimates of the total number of port calls per year, except for the RoPax case. There is a significant uncertainty in the estimated number of port calls per year. In the data set B calculations, the total amount of fuel consumption at port per year in the SHIPAIR area is more certainly determined. However, the ships might also go to ports outside the SHIPAIR area, which is not included in the data from Windmark (2019). Hence, there is a significant risk that the total amount of fuel consumption at berth is underestimated for many of the vessel categories (those that frequently also travel outside the SHIPAIR area – see (Trosvik et al., 2020) and Windmark (2019) for more details on this).

4.2. Fuel switches and full electrification In Figure 7 and Figure 8 the effects on SO2 and PM emissions of switching fuel from MGO to other alternatives are shown. Figure 7, which shows the results for the data set A calculations, also includes the effect on NOX emissions. In the data set B calculations, the effect on the NOX emissions shows a time dependency (since the NOX emission factor differs over time) and the results for NOX emissions for these calculations are presented in Figure 9.


Figure 7. Emissions changes in terms of NOX, SO2 and PM due to fuel switches, calculations for data set A.

Figure 8. Emissions changes in terms of SO2 and PM due to fuel switches Calculations based on data set B.

The results of the emission reductions accomplished by the fuel shift using the different data sets (comparing Figure 7 and Figure 8) show little difference for the reduction of sulphur, whereas there is a noticeable difference for PM. The difference is due to the significantly higher emission factor of PM from the combustion of MGO in marine engines given by Carlsson et al. (2019) compared to Brynolf (2014) (see Table 7 and Table 8). In data set B there is a time dependency for the NOX emission factors and the results for the NOX emissions in the fuel shifts for data set B are shown in Figure 9.


Figure 9. Emissions reductions of NOX emissions due to fuel shift (from MGO) to different alternative fuels at different times and for vessels of different sizes (in DWT) as indicated on the x-axes. Calculations based on data set B.

In Figure 10 and Figure 11 the emissions changes of the greenhouse gases and GWP summarised emissions due to fuel shifts or full electrification are given for the data set A and data set B calculations respectively. CO2 emissions are reduced in all cases except for the methanol WTP case. In the case of a shift to LNG, methane emissions from the ship increase, due to the methane slip (emissions of unburnt methane from combustion) in engines. Since methane is a potent greenhouse gas, in both the TTP and WTP case, this results in the greenhouse gas impact (ton CO2eq.) being a net increase compared to using MGO. The reduction of NOX emissions enhances this effect (in ton CO2eq incl. air pollutants), since NOX has a negative GWP-factor.

Switching to renewable gas, LBG, also results in an increase of methane emissions, both in the TTP and the WTP cases. However, the reduction of CO2 is significantly higher when switching to LBG compared to the case of LNG, so the total effect on greenhouse gas emissions is a net reduction in both the WTP and the TTP cases. The reductions in NOX emissions are similar when switching to LNG and LBG.

Switching fuel to methanol is another option that reduces NOX emissions significantly. Emissions of all the included pollutant categories decrease in the TTP perspective. However, the significant reduction of NOX and the relatively small reduction in CO2 result in a total net increase in greenhouse gas impact (tons CO2eq incl. air pollutants) for both the TTP and WTP cases.

Comparing the shift to LNG to the shift to fossil methanol reveals that the reduction in combustion emissions of CO2 are larger for the shift to LNG, due to a lower specific emission factor. The sulphur content of the methanol is lower, whereas the NOX formation is somewhat higher as compared to LNG. For PM it is assumed that the specific emission factor is the same for LNG and methanol.


The normalized emission reductions (in Figure 10 -Figure 11) are the same for all ship types, only the CO2eq. incl. air pollutants in the data set B calculations have a very small dependency on ship size due to the size dependency of the NOX emission factors given by Carlsson et al. (2019)

Figure 10. Emissions changes due to fuel switches, “CO2eq.” includes CO2, CH4 and N2O whereas “CO2eq. incl air pollutants” in addition include the climate impact of SO2, NOX and PM. The normalized values are the same for all ship types. (Results based on calculations using data set A.

Figure 11. Normalised emissions changes due to fuel switches, “CO2eq.” includes CO2 and CH4, whereas “CO2eq.incl. air pollutants” also includes the climate impact of SO2, NOX and PM. The normalised


values of CO2 and CO2eq. are the same for all ship types. There is very small difference for the CO2eq incl. air pollutants depending on ship size. The example presented here is for a ship size of 0--10,000 DWT (data set B calculations).

The contribution by the different GHGs and air pollutants to the total GWP of the emissions changes due to fuel shifts are shown in Figure 12.

Figure 12. GWP summarised emissions changes due to fuel switch and full electrification. The contribution of the different GHGs and air pollutants are displayed in this diagram. Note that the SO2, NOX and PM emissions have been multiplied by their GWP100-factors.

In the WTP case, the CO2 emissions increase when the methanol is produced from natural gas. If the methanol used is instead produced from renewables, the switch results in a reduction of the greenhouse gas emissions for both the TTP and the WTP case. The NOX emissions are reduced somewhat less when considering the WTP emissions in the case of renewable methanol as compared to the fossil methanol case.

As can be seen in Table 34 the full electrification case significantly reduced the emissions of all pollutants, except for methane emissions where the electricity mix had a higher emission factor and for NOX in the 2045 scenarios, where methanol also had a higher emission factor than what Carlsson et al., (2019) estimate for MGO propelled vessels in 2045, see Figure 9.

Table 34. Emissions reductions for full electrification using emission factors in data set B.

Case CO2 CO2eq. CO2eq. incl. air poll NOX SO2 PM

TTP 100% 100% 100% 100% 100% 100%

WTP, swe electricity mix 92.1% 91.2% 88.4% 99.1% 93.4% 93.0%

WTP EU electricity mix 37.9% 38.7% 21.9% 95.8% 39.4% 87.3%

In Figure 13 the specific abatement costs are given in terms of cost per ton of CO2 reduced and in terms of cost per ton of CO2 equivalents (CO2eq.), (i.e. GWP summarised reductions of CO2, CH4 and N2O) for the data set A calculations. In the specific abatement costs presented, the entire abatement cost has then been allocated to the reduction of CO2 and CO2eq.The investment costs per vessel and


emissions reductions for the different air pollutants are given in the Supplementary data (Holmgren, 2020). All these results are for data set A calculations.

The reason for the missing staples for CO2eq. for LNG (in Figure 13) is that the emissions do not decrease (they increase), and an abatement cost cannot be calculated.

For the shift to LBG the CO2 abatement cost is somewhat higher than the cost for LNG; the main reason is that the fuel cost is significant higher.

Shifting fuel to fossil methanol shows a high CO2 abatement cost for the TTP case, mainly due to the limited reduction in CO2 and a high cost for fuels. For the WTP case, as well as for both cases considering the specific abatement cost in terms of €/ton CO2eq., there is no emission reduction and, hence, no specific abatement cost can be calculated. The cost for switching to renewable methanol is very high, mainly due to the high fuel costs.

Figure 13. Specific abatement costs for fuel switches from MGO. Calculations based on data set A for the 2015-year price level.

Specific abatement costs for fuel shift and full electrification according to data set A calculations are presented in Figure 14. The fuel shift to fossil methanol has the highest specific costs, followed by the full electrification (if considering the WTP perspective where also the emissions associated with the electricity is considered). The main reason for these cases to have the highest specific cost is due to the low emissions reductions.


Figure 14. Specific abatement cost of fuel switches and full electrification for RoPax ferries calculated according to data set A. Note that there is a difference between the representative vessels RoPax and RoPax 2.

Figure 15. Specific abatement costs for fuel switches from MGO to LNG or LBG. Calculations are based on vessel types according to data set B, but here presented only for one type of vessel: a RoPax ferry of 40,000-55,000 kW in main engine capacity.

Figure 15 shows the specific CO2-reduction costs for fuel switch from MGO to LNG or LBG from different emissions perspectives (TTP and WTP) and for different fuel price scenarios, both with and without a CO2-cost using data set B. In the base case (2015) there is a net cost, but for all the other


price scenarios it is profitable to switch to LNG and the carbon cost will increase the profitability. The importance of a carbon cost (i.e. including shipping in the ETS) becomes evident in the SDS scenario, where the LBG cases become profitable due to the CO2 cost of fossil fuels.

In Figure 16, the calculated specific abatement costs for switching from MGO to methanol (fossil or renewable) are presented. The calculations are based on data set B. In the SDS 2045 scenario, in which the CO2-cost is very high, the renewable methanol becomes profitable. Already in the 2015 case, the renewable methanol has a lower specific reduction cost than the fossil methanol, even though the price of the renewable methanol is significantly higher. This is due to the significantly higher emissions savings in the case of renewable methanol.

Figure 17 shows the specific CO2 abatement cost for switching from MGO to LNG for all the ship types included in the data set B calculations. The selected representative vessels for each ship type presented in Figure 17 are the domestic vessels as given in Table A7 in the Appendix.

Figure 18 show the specific abatement costs for switching fuel from MGO to LBG for different price scenarios including the CO2 cost (ETS). For the sustainable development scenario, both in the 2030 and 2045 perspective, this becomes a profitable fuel switch.

Figure 16. Specific CO2 abatement cost for switching from MGO to methanol. Calculations made for data set B and here presented for one RoPax type vessel.


Figure 17. Specific CO2 abatement cost for fuel shift to LNG for data set B calculations.

Figure 18. Specific CO2 abatement cost for switching fuel from MGO to LBG. Calculations based on data set B.

In Figure 19 the specific abatement costs for NOX abatement based on data set A calculations are shown (allocating the entire cost of the abatement options to the NOX emissions). The lowest cost in terms of €/ton NOX is found for switching to LNG. The cost for switching to renewable methanol is very high, mainly due to the higher fuel price.


Figure 19Specific abatement cost for NOX emissions from fuel shifts for the representative vessels in data set A.

Figure 20. Specific abatement cost for full electrification of RoPax vessel. Based on the emission factors of data set B and the vessel characteristics of the RoPax 2 vessel.

In Figure 20 the specific abatement cost for full electrification calculated for the different fuel price scenarios and using the data set B is shown. This abatement option remains costly, even with the high


CO2-cost. Note that the size of the RoPax 2 vessel is different from the RoPax vessel defined in Table 16. RoPax 2 has a machine power of 10,400 kW and estimated annual running hours of 5,600 h.

4.3. SCR The installation of SCR results in significantly reduced NOX emissions; in the data set A calculations, approximately by 80%. In the TTP perspective, only NOx emissions and NH3 emissions are impacted by SCR, the other emissions categories are not impacted. In the WTP perspective, where also the production and transport of ammonia is considered, there is a net increase of all the other emissions. As a result, the net effect of the SCR is a small increase (~2%) in greenhouse gas emissions (ton CO2eq.) for all the SCR cases. The results for the data set B calculations are very similar; NOX

emissions are reduced by approximately 80% in 2015 and by 75% in 2030 (with small differences depending on vessel size). For the calculations following data set B no calculations for introducing SCR by 2045 is made, since the recommended NOX emission factors for MGO utilization (according to Carlsson et al. (2019)) are so low that it does not seem reasonable to retrofit for SCR. The emissions changes and abatement costs for data set A and data set B calculations are presented in the Supplementary data (Holmgren, 2020).

The specific abatement cost €/ton NOX for SCR is presented in Figure 21 (based on data set A calculations).

Figure 21. Specific abatement cost for NOX emissions for the introduction of SCR in new or old vessels. Calculations based on data set A.


Figure 22. Specific NOX abatement cost for implementing SCR in new or retrofitted vessels. Calculations based on data set B.

The specific NOX abatement costs resulting from the data set B calculations are presented in Figure 22. There is little difference in the results between the data set A and B, but the data set B results in somewhat higher costs, mainly due to differences in the emission factors.

4.4. Energy efficiency measures and w ind p ower The energy efficiency measures all result in reduced fuel consumption and thereby the emissions from all categories are reduced.

Figure 23 shows the reduction in fuel consumption for the different measures and ship types resulting from the data set A calculations. The same assumptions regarding fuel consumption reduction was made in the data set B calculations, so Figure 23 is also representative of the emission reductions resulting from the data set B calculations. Note that Advanced route planning was not considered feasible for RoPax, passenger ferries and passenger cruise vessels (see section 3.5.3).

Several of the abatement costs calculated for the energy efficiency measures based on the data set A assumptions are negative. Negative specific abatement costs occur in cases where the cost savings due to lower fuel consumption are greater than the investment cost and changes in other operational and maintenance costs. Results are presented for each of the representative vessels included in the data set A in Figure 24 - Figure 27. In the case of the RoPax (Figure 24) and container (Figure 26) vessels, all abatement costs are negative except for the slender hull. For the bulk carrier (Figure 25), both wind power (Flettner rotors) and hybridization have a positive abatement cost. For the coastal tanker (Figure 27), both the slender hull and the wind power (Flettner rotors) have positive abatement costs.


Figure 23. Reduced fuel consumption for energy efficiency measures for the different representative vessels. (These reductions are a presentation of the assumption made, see section 3.5.3).

Figure 24. Specific abatement costs for GHG emissions reductions measures for a RoPax vessel. Calculations based in data set A for the fuel prices of 2015.


Figure 25.Specific abatement costs for GHG emissions reduction measures for a bulk carrier. Calculations based on data set A for the fuel prices of 2015.

Figure 26. Specific abatement costs for GHG emissions reduction measures for a container vessel. Calculations based on data set A for the fuel prices of 2015.


Figure 27. Specific abatement cost for GHG emissions reduction measures for a coastal tanker. Calculations based on data set A for the fuel prices of 2015.

The abatement costs according to the data set B calculations show that, for all the ship types where Advanced route planning is considered feasible, it is a profitable abatement measure for all the fuel price scenarios (see Table 35). The optimised propeller is also a profitable measure for all the ship types and fuel price scenarios.

Table 35. Results from data set B calculations of abatement costs for energy efficiency measures and Flettner rotors. An X marks for which ship types the abatement costs are negative, n.a. means that the abatement option was not applicable for the vessel category.

Vessel type Fuel price scenario RP PC PF BU CA CO TA VE

Abatement option Cases of negative abatement costs (net saving for shipowner) according to data set B calculations

Advanced route planning All n.a. n.a. n.a. X X X X X

Optimised propeller All X X X X X X X X

Slender hull

2015, SDS 2045 X X

STEPS 2030 X X X X X

STEPS 2045 X X X X X X

SDS 2030 X some X

Hybridization

2015, SDS 2030 & 2045 X some X X X

STEPS 2030 X X X X X X

STEPS 2045 X X X X X X X

Flettner rotors All X X n.a. n.a. some X

In the 2015, SDS 2030 and SDS 2045 fuel price scenarios the calculated abatement costs for slender hull (according to data set B) show negative costs only for bulk carriers and vehicle carriers. In the


STEPS 2030 and 2045 fuel price scenarios (where the MGO prices are higher), the abatement costs are also negative for several of the other ship types (Table 35).

For the hybridization the abatement costs are negative for several of the ship types and fuel price scenarios. However, for the cargo vessels it is a net cost for all fuel price scenarios. The Flettner rotors are profitable for RoPax, passenger cruise vessels, some tanker ships and vehicle carriers for all the fuel price scenarios.

The results for all the representative vessels in data set B are presented in the Supplementary data (Holmgren, 2020).

4.5. Speed reduction/slow steaming The fuel consumption reductions due to speed reductions are approximately 9.25% for the RoPax, Passenger cruise vessels and Passenger ferries, based on the assumption that speed could be reduced by 5%. For the other vessel types included, the fuel consumption reductions were approximately 27.7%, based on an average speed reduction of 15%.

The specific abatement cost for speed reduction is calculated to be -149 €/ton CO2eq. for the TTP and -136 €/ton CO2eq. for the WTP case; and -213 €/ton CO2eq. incl. air pollutants for the TTP and -184 €/ton CO2eq.incl. air pollutants for the WTP case, when using the data set A and the 2015 price levels and no costs for adjusting the engines.

Figure 28. Specific CO2 abatement cost for speed reductions (based on data set B) with a TTP perspective.

Calculations for speed reduction with data set B and including an investment cost for optimizing engines to slower speeds, resulted in negative abatement costs for many of the vessel types and sizes (see Figure 28) in many of the fuel price scenarios. . It is only the 2015-year price scenario where some of the abatement costs are positive (i.e. it actually costs money for the shipowner). The results in Figure 28 are valid for a selection of domestic vessel types (see Table A7 in the Appendix for the chosen size classes of each ship type). The difference between domestic and international was small.


5. Discussion and Conclusions This chapter includes a discussion of the results and the conclusions and a discussion on important uncertainties and delimitations of the study. At the end of each subsection the most important conclusions are presented in bullet points.

5.1. Discussion and conclusion o f emission reductions and abatement cost calculations

OPS

The results for onshore power supply diverge between the two data set calculations. The profitability for the shipowner to reconfigure a vessel for onshore power supply depends strongly on the total fuel saving potential, which in turn is dependent on the total fuel consumption for electricity at berth and the possibility to connect to onshore power in the ports that are visited. The total fuel consumption at berth is dependent on the specific fuel consumption and the number of hours spent at berth. Better data on actual time at berth per year is needed to calculate the actual abatement costs more accurately. In addition, data on the frequency of the availability of onshore power supply in the ports that are visited would decrease the uncertainty of the cost estimates. It is clear that it is easier for vessels that travel on a regular basis to the same ports (where onshore power supply is available) to use OPS, as compared to vessels that visit a large number of different ports, and where the availability of onshore power supply is less frequent.

The most important conclusions for the OPS calculations are:

• According to the results of this study, RoPax ferries seem to have the best conditions for OPS since both data sets show examples of profitability for this ship type.

• The results of the data set A calculations showed a very high emission reduction potential and slightly negative abatement costs for cruise vessels. (The estimate for time at berth for the cruise vessels was significantly higher in data set A compared to data set B.)

• For the other ship types, the results are ambiguous (i.e. there are different results for the different data sets).

• Cruise vessels use a high share of their fuel consumption at berth for electricity production and local air pollutants could be reduced significantly in the ports if these ships can be connected to onshore power supply.

Fuel switches and full electrification

The fuel switches included in this study are limited to a few alternatives; LNG/LBG and methanol (fossil or renewable). There are also many other potential possibilities, but so far not widespread. Bakhtov (2019) analyses the possibilities for alternative fuels for shipping in the Baltic Sea in detail. Fuels that are not investigated in detail in the present report include ethanol and other biofuels. Ethanol could be produced from renewable sources and for land-based transport it is already widely used. However, according to Bakhtov (2019) no ship engine has so far been developed to run solely on ethanol as a fuel. Scania’s heavy-duty engine for buses is mentioned as an example of what might also be a possible development for the marine sector in the future. Biofuels (including also biofuels other than just biogas and bio-methanol), such as biodiesel (FAME) hydrotreated vegetable oils, DME and others, are also discussed and one of the main problems for the marine sector is the availability of the fuels and the (often) lower energy density of these fuels.

DNV GL (2019) analysed several fuels that could be of importance for the decarbonization of the marine sector. The analysis includes hydrogen, ammonia and fully electric pathways, together with


HVO, and compare them to other alternative (fossil) fuels like LNG, LPG, methanol and low sulphur fuel oils combined with scrubbers. The results from DNV GL (2019) show that different fuels face different challenges; safety, energy density, technical maturity, costs, lack of infrastructure etc. and do not point out a specific winner.

Ammonia as a fuel for maritime shipping has attracted increased attention recently. Engine tests are being performed but so far there are no examples of vessels running on this fuel. It is said to be possible not only to use in fuel cells but also directly in modified diesel engines. The Ship FC project will equip a vessel with an ammonia-powered fuel cell in late 2023 (Fuel Cells Bulletin, 2020). There are also plans for equipping ships with two-stroke ammonia engines (combustion engine) by e.g. MAN (2019). Ammonia production today results in large amounts of CO2 emissions, so if ammonia is to be a future low-carbon fuel for shipping also new production technologies and production units based on renewable energy sources would need to be developed and built. Several such projects have been coming up recently, see Brown (2019).

Horvarth et al. (2018) analysed options for a decarbonized shipping sector in the time spans 2030 and 2040. According to them, indirect electrification via synthetic fuels is a viable solution to achieve emissions reduction goals. Further, Horvath et al. (2018) compare the use of different fuels in internal combustion engines (ICE) and Fuel cells (FC) in vessels for the time horizons 2030 and 2040. They conclude that hydrogen fuel cells are most likely to replace fossil internal combustion engines if the fuel cells follow their expected development. Significant gains in fuel cell average efficiency and decreases in production cost between today and 2030 and 2040 are factors contributing to competitiveness. According to Horvath et al. (2018), propulsion based on renewable electricity-based liquid hydrogen (produced by utilizing renewable electricity such as wind and solar photovoltaics to produce hydrogen via electrolysis and CO2 captured from the environment) used in proton exchange membrane fuel cells were the most cost effective systems for shipping in both 2030 and 2040.

The present activities for alternative marine fuels are listed by Hansson et al. (2018) and include the options analysed in this study (LNG, LBG, Methanol, electricity) and, in addition, biodiesel (FAME and HVO) used for blending with fossil fuels, as well as hydrogen used in fuel cells. The hydrogen/fuel cells are still at a pilot stage.

Lloyd´s Register and UMAS (2017) have analysed different options for reaching zero emission vessels by 2030. According to their study, advanced biofuels seem to be an attractive alternative from an economic point of view. However, they highlight the lack of availability of advanced biofuels (from sustainable resources in larger quantities). Batteries are good, but not feasible for all vessel types. Synthetic fuels like hydrogen and ammonia are two possible options, and it seems to be a better option to use ICE rather than fuel cells, due to the low energy density of the fuel cells. This is in contrast to the results by Horvarth et al. (2018).

Hansson et al. (2019) analysed alternative marine fuels using multi-criteria decision analysis based on the estimated fuel performance and on input from a panel of maritime stakeholders. The analysis showed that different stakeholder groups rank the fuels differently, due to different ranking of the criteria. For example, shipowners rank economic criteria highest, whereas policy makers tend to rank environmental criteria higher.

The investigated fuel switches of this study

LNG is a fuel that is drawing increased attention and the number of LNG/propelled ships is increasing. The upside of this fuel is that both NOX and SO2 (and PM) emissions decrease significantly. The downside is that LNG is a fossil fuel and that it might lead to increased methane emissions. Since methane is a very potent greenhouse gas, the net climate impact of using LNG can be higher than with conventional fuels (MGO/HFO). Just recently, the IEA has shed some more light on the methane emissions from fossil fuels by launching a “methane tracking tool“ (IEA, 2019b) and a report (IEA,


2019c) which describes the role of gas in the current energy transition. There are measures that can be taken in order to reduce methane leakage throughout the value chain, including the leakage from ship engines and fuel storage.

For LBG, which is the renewable version of LNG, there is a great variation in WTT emissions depending on production technology. The emission factors used in this study corresponds to a production chain based on willow, which includes gasification. However, LBG can also be produced from the upgrading of biogas which can be produced from sewage sludge, manure, grass/clover-ley etc. The WTT emissions of these production pathways vary significantly, some are lower and some are higher as compared to the willow pathway. The big question regarding LBG for shipping is regarding the need for large quantities. In order to achieve an introduction of LBG at a large scale for shipping, the production capacity of biogas and the upgrading and distribution of LBG needs to be developed significantly.

An important factor for the costs of fuel switches is the fuel prices. It is difficult to predict future fuel prices especially for fuels for which production facilities are not yet available in large numbers and scales. Both for LBG and for renewable methanol the future prices used in this study are even more uncertain than the estimates of the fossil fuels that are based on IEA-scenarios. However, using the “guesstimates” for future prices of renewable methanol in this study it would still not be a profitable abatement measure except for in the SDS 2045 scenario, where we also assumed that the shipping sector would need to pay for the CO2 emissions from their fuel use (i.e. through its inclusion in the EU ETS). Hence, unless renewable methanol can be produced in large quantities at significantly lower prices, this seems to be a costly way to reduce emissions.

The most important conclusions from the calculations of fuel switches in this study are:

• Among all the abatement measures analysed in this study, fuel switches and full electrification are those that have the largest potential for reducing emissions. These measures have the capability of significantly reducing all air emissions from shipping.

• LNG is a fossil fuel and with the current level of methane slip in marine engines, a fuel shift from MGO (or HFO) to LNG results in a net increase in greenhouse gas emissions, both from a TTP and a WTP perspective. There is a trend towards more LNG ships in the global fleet and, according to the fuel price projections the prices for LNG will fall in the future, resulting in negative costs for the fuel switch from MGO to LNG according to the results of this study.

• LBG can directly replace LNG and even though the methane slip in engines remains a problem, this switch will bring a significant reduction in greenhouse gas emissions.

• A fuel switch from MGO to fossil methanol results in a significant reduction of NOX and SO2

emissions (similar to a fuel switch to LNG). In a TTP perspective CO2 emissions are slightly reduced, but in a WTP perspective CO2 emissions increase. Switching fuel to renewable methanol results in significant reductions in greenhouse gases, NOX, SO2 and PM. However, the price of renewable methanol is currently high, and its availability is low, so this measure is associated with high costs.

• Depending on both vessel type and which emissions reduction perspective is applied (TTP or WTP) the specific cost for reducing GHG emissions by switching fuel to a renewable fuel varies between 240-1300 €/ton CO2eq for LBG and between 250-300 €/ton CO2eq for renewable methanol in the base scenarios (2015 year price level). The specific costs were higher in the WTP perspective in both cases, but the difference was larger for the LBG case because the WTP perspective results in lower emissions reductions.

• The costs for switching to renewable fuels are high today due to high fuel prices. However, according to the results of this study, they could become profitable in a future when the costs


for the production and distribution of the renewable fuels are reduced and fossil shipping fuels are also subject to CO2 costs (e.g. the shipping sector is included in the EU ETS).

Full electrification

In this study only one vessel category, RoPax, was included in the cost calculations for full electrification. Even though full electrification by batteries will not be feasible for all ship types, it is already feasible for several categories today. There are examples of passenger ferries, cargo, bulk etc. with full electrification. It will be feasible for many vessels that travel on short and specific routes so that the infrastructure for charging can be fitted to the specific vessel.

The most important conclusions from the calculations of full electrification in this study are:

• To have a fully electric vessel is associated with significantly higher investment costs as compared to conventional propulsion technologies. The costs for the full electrification of vessels will fall in the future as the number of ships built for full electrification increases, standards become available and the prices of batteries and battery packs decrease.

• In the TTP perspective, full electrification reduces all emissions from the vessel. In a WTP perspective, with a Swedish electricity mix, the CO2eq. reduction is over 90%. With an EU electricity mix, however, the CO2eq reduction is significantly lower at approximately 35%.

• The specific CO2 abatement cost for full electrification was estimated to be about 290 €2015/ton CO2 in both the TTP and WTP perspectives. For the future scenarios of full electrification, the specific CO2 abatement cost is lower, but it does not go below zero even in scenarios with a high CO2 cost.

SCR

SCR effectively reduces NOX emissions, but it has a net positive abatement cost. In future studies also some of the NOX-abating technologies mentioned in section 3.1.2) for new ships should be included.

• At the 2015-year price level, SCR had the lowest specific NOX reduction cost (450- 2000 €/ton NOX) among the measures that specifically aimed at reducing NOX (i.e. SCR, fuel switches and full electrification), followed by fuel switch to LNG.

• In the future scenarios with higher fuel costs for the conventional fuels, fuel switches will have lower costs.

Energy Efficiency measures

• Many of the measures called energy efficiency measures in this study have negative abatement costs for many of the ship types and timeframes. This means that they are already profitable today.

• Advanced route planning and an optimised propeller have negative costs across all ship types.

• Flettner rotors, hybridization and slender hull also have negative costs for many of the ship types and fuel price scenarios.

To find measures with negative abatement costs is not surprising. The abatement costs for reducing greenhouse gas emissions across several sectors assessed by e.g. McKinsey (2010, 2007) included measures with negative costs. There are several reasons for why costs can be negative (and measures not fully implemented). This study has not analysed the reasons for this for shipping specifically, but some general reasons include:


Constrained access to capital, (e.g. the investment and implementation of measures compete with other possibly more profitable measures for shipowners).

Lack of knowledge or awareness of existing measures and how they work, and the potential savings they offer.

The implementation of a measure might need to be coordinated with other maintenance or renovations. Prolonging the time at dock might cause significant costs which were not included in the abatement cost calculations.

Speed reduction

Speed reduction shows potential to be a profitable measure to reduce emissions. However, it will lead to increased shipping times. On the other hand, there are idle ships and ships that are not currently used that could be taken into operation again to meet at least some of the demand for more ships that would result from introducing speed reductions (Faber et al., 2017).

Speed reduction is being discussed by the IMO one option to reduce emissions. On the negative side is that reducing emissions by slowing down speed is a temporary reduction. If speed increases again, so will emissions. In addition, it might have a negative impact on the competitiveness of shipping compared to other transport modes and back shifting could counteract emission reductions. Faber et al. (2017) have evaluated the impacts of speed reduction on trade, more specifically investigating if it might have negative effects on the trade between distant countries. The results by Faber et al. (2017) show that there will be a very small impact on trade due to speed limits.

In the recent report by GL Reynolds (2019), several other benefits of speed reductions for the shipping sector are assessed, such as reduced underwater noise, the risk of fatal collision with large mammals etc. In Faber et al. (2019), a suggestion on how to design a global policy for speed regulation is presented.

• The results of this study show that speed reduction has a significant potential to reduce emissions from each ship, and costs are negative.

Combination of measures

The measures included in the present study are measures that can have a significant impact on the air emissions from shipping and the fulfilment of the Swedish environmental quality objectives in a short to medium time perspective and mainly include technologies that are already available on the market. There are several measures available that are profitable today and even more that will be profitable in the future for shippers to introduce in order to improve the energy efficiency and thereby to save fuel and reduce emissions. Fuel switches that seems to be the best option to significantly reduce the GHG emissions are not profitable today and will most likely need some policy instrument such as a CO2 cost for fossil fuels (like in the calculations within this study where the shipping sector is assumed to be included in the EU ETS) in order to become profitable. However, fuel switches and energy efficiency measures are available technologies so it would be possible to significantly reduce GHG emissions. In the present study we have not added measures to one another in order to analyse total emission reductions or costs. An analysis of how much emissions from shipping can be reduced by combinations of measures can be found in Trosvik et al. (2020) and by switching to profitable measures can be found in Vierth (2020).

When it comes to air pollutants it seems that all the specific measures (for reducing Sulphur and NOX

and indirectly PM) cost money. This since they either require a more expensive fuel or do not save fuel but only include a cost for the abatement technology. However, for sulphur there are global and regional policies in place that have reduced the SO2 emissions significantly. For NOX there is also regional policies in place, but the rate of change is slower than for sulphur since the regulation is mainly directed to new vessels (and not to the existing fleet). For a more specific discussion on the


impact on the Swedish Environmental Quality Objectives and the costs and benefits for society please see Vierth (2020).

In this study, we have not calculated costs for combining technologies, but this could be an important way forward. For instance, partly using electricity to significantly reduce the use of the combustion engines and then using alternative fuels in the engines, along with wind power and improved ship design and operational measures could probably be a solution for future ships to reach ultra-low emission levels. Such concepts are being developed, along with new technologies and designs of ships that are more fundamentally different from the conventional, such as the development of zero emission vessels for example. However, these are currently only conceptual so cost estimates are very uncertain and most of these concepts will not be sailing until 2030 and then probably only in small numbers. Their introduction on a large scale will probably take a much longer time.

5.2. Uncertainties and delimitations

Emission factors and representative vessels

Two sets of emission factors have been used in this study and the difference between the two sets is small for most of the emission categories but significant for some. The two studies, from which the data sets are collected had different objectives; Brynolf (2014) had the ambition to compare emissions from different fuels and analyse the benefits of switching fuels (as in the present study), whereas the objective in Carlsson et al. (2019) was to provide the ASEK11 with updated and relevant emission factors for shipping. Carlsson et al. (2019) consider the time dimension for the emission factors, which is not done by Brynolf (2014). Carlsson et al. (2019) lack emission factors for methane for all the included marine fuels.

• The results of this study have shown that it is important to consider the methane emissions for LNG and LBG.

In the emissions and cost calculations for switching fuels for individual ships we have estimated a fuel consumption in the main engines by assuming the number of running hours based on Lindé and Vierth (2018) and Parsmo et al. (2017). The reason for estimating this, instead of using the fuel consumption based on Windmark (2019), was that for individual ships it seemed uncertain. Windmark (2019) gave total fuel consumption for each size class (engine capacity) of each vessel category along with the number of ships. But dividing the total fuel consumption for each class by the total number of vessels in that category does not necessarily reflect the amount of fuel consumed by the ship per year. The ships might also be running outside the SHIPAIR area and this would not be included in the data from Windmark (2019). Therefore, the fuel consumption was estimated by an assumed number of running hours.

• From the data set A calculations, it is obvious that the N2O emissions do not have a significant impact on the results. Hence, focus for the shipping sector should be on CO2 and CH4 for the greenhouse gas reduction targets.

GWP summarised air pollutants

As mentioned in section 3.3, the GWPs for the air pollutants are much more uncertain than the values for the greenhouse gases. Therefore, the results for CO2eq. including air pollutants should be considered as far more uncertain than the CO2eq. emissions (which summarises greenhouse gases only). The GWP summarised emissions including also air pollutants was included because there has been a discussion on the impacts of reducing the emissions of sulphur and NOX at sea which (can) have a negative

11 ASEK is the Swedish national method for Cost-benefit analysis and the calculation of socioeconomic values for the transport sector.


impact on the radiative balance (cooling). As can be seen from the results, sometimes there is a significant difference between the CO2 eq. and the CO2eq. incl. air pollutants, especially when the CO2

emissions are not impacted so much, but rather the NOX and the SO2. For those cases where CO2

emissions are heavily impacted, e.g. fuel switch to renewable fuel or full electrification the difference between CO2eq. and CO2eq. including air pollutants is smaller. Due to the large difference in uncertainty between the GWP-factors of NOX, PM and SOX and due to that the impacts might vary with geographical point of emission (that we have not been able to take into consideration in this study) no further conclusions from these results are drawn.

Investment costs and emission reduction estimates

The investment cost estimates, and the emission reduction estimates used in this study are mainly based on values found in the literature. There is significant difference in the level of detail between the different measures. For fuel switches, SCR and OPS, the estimates are based on published scientific literature and the level of detail of the estimates is reasonably high. For the energy efficiency measures; advanced route planning, optimized propeller, slender hull, Flettner rotors (wind power) and hybridization, the estimates of costs are made at a more general level. For full electrification we used data from one specific case, and it is therefore difficult to generalize to an entire vessel category or to categories beyond. For speed reduction the estimates are based on detailed technical reports that are available.

Sensitivity analysis

There is a limited sensitivity analysis performed within this project. Fuel prices are very important for the costs of many measures, especially fuel switches and full electrification. The future fuel price scenarios and the inclusion of a CO2 cost for the fossil CO2 emissions from fuels can be seen as a sensitivity analysis for the assumptions regarding the fuel prices. However also investment cost and running hours are important factors for the results. The number of running hours differs significantly between the different ship types so the impact of running hours on the results can be seen there. Another factor of importance is the CRF factor which considers the interest rate and the lifetime of the investment for the abatement technology. In this study we have had a ship owners’ perspective and hence the interest rate was set at a higher level as compared to studies with a socio-economic.


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Appendix 1 Fuel prices and fuel price scenarios

The World Energy Outlook (IEA, 2016) was used as a source of fuel price levels for 2015 in this study.

Natural gas and LNG

When describing world market prices for natural gas (and hence LNG), the IEA in its World Energy Outlook (IEA, 2019a, 2016b) focuses on three regional markets; the North American, Asia and Europe. In North America the reference price is the spot price at the inland Henry Hub, which is a distribution point in the US pipeline system in Louisiana. The cost paid by consumers in North America is a differential based on the price at the Henry hub considering costs for transmission and distribution. However, the price of marine LNG is different from the price of natural gas in inland US. The natural gas must be liquified (which is an energy demanding process) and for bunkering at sea there are additional costs for the transport.

Table A1. LNG Price estimates for 2015 based on (IMO, 2016c) and WEO (2016). All monetary values are given for the money value in 2015.

Price estimate for natural gas LNG [$/MBTU] €/MWh [$/tonne] [€/tonne]

Cost of natural gas at Henry Hub 2.60 8.0 139 125

Total cost at dock: (US) 9.09a 28.0 485 437

Total at sea (US) 14.09b 43.3 752 678

Cost of natural gas European import 7.00 21.5 374 337

Total cost at dock: EU 13.49 41.5 720 649

Total at sea (EU) 18.49 56.9 987 890

a Based on the assumption that there is a liquefaction cost of 5.09 $/MBTU (based on the cost of new plant with a CAPEX of $ 50,000,000 and an investment rate of return of 11% and 10 years, liquefaction capacity of 100,000 gallons/day and 80% availability) and a pipeline charge of 0.5 $/MBTU and a distribution charge of 0.9 $/MBTU (based on a trucking cost of $ 7/load mile) b A bunkering cost of 5.0 $/MBTU is assumed based on (IMO, 2016c). c The cost for imports to the EU is assumed to be 8.0 $/MBTU and it is assumed that the liquefaction cost in the EU is similar to the cost of liquefaction in the U.S. The additional cost for bunker in the EU is assumed to be similar to the cost for bunker in the U.S.

According to (IMO, 2016c) the LNG bunker price is estimated to in the near future be equal or less than the residual fuel price (IFO180/380) and about 60% less than the distillate (MDO/MGO) price. The future price projections are more uncertain, but the cost of low sulphur diesel fuel is expected to increase because of the increased demand, refinery cost and capacity.

Lindstad & Eskeland (2016) state that MGO is the most expensive of the fuels; HFO; MGO and LNG. The price for HFO is consistently lower than the crude oil price. The LNG price used by Lindstad and Eskeland (2016) is lower than the price of crude oil and is closer to the price of HFO than to the price of Crude oil. Lindstad & Eskeland (2016) state that the LNG price is significantly higher than the natural gas price at the Henry hub, since LNG demands huge capital investments for production and approximately 10% of the energy for conversion from natural gas. Based on the assessment by Lindstad & Eskeland, (2016) (Table A2) the price of MGO was estimated to cost 200 US$/toe in addition to the cost of HFO. The HFO price was estimated based on the crude oil prices given in World Energy Outlook 2016 (IEA, 2016b) and the linear relationship (Eq. A1) found between (historic) data from (Lindstad and Eskeland, 2016) and (IEA, 2016b) (for the years 2006-2013).


HFO ($/toe) = 0.6932*Crude oil ($/toe) +45.606 Eq. (A1)

The original data is presented in Table A2.

Note, that the HFO -price was not used in the calculations since it was assumed that most ships use MGO (in Sweden and close to Sweden, due to the sulphur limits).

Table A2. Historical data on BRENT Crude and HFO (sources: Lindstad and Eskeland (2016) and (IEA, 2016b).

Year Brent Crude [US/toe] HFO [US/toe]

2006 480 370

2007 520 450

2008 710 550

2009 460 350

2010 580 450

2011 820 620

2012 820 620

2013 800 600

2014 740 520

2015 380 300

Table A3. Fuel prices for 2015 used in the calculations of the abatement costs. All costs are without taxes.

Fuel US$/bbl €2015/MWh US$/toe Reference

Crude oil price 51 29 380 IEA (2016)

HFO 24 300 IEA (2016) and Lindstad and Eskeland (2016)

MGO 39 500 HFO price and Lindstad & Eskeland, (2016)

LNG 41 620 IEA (2016) and IMO (2016c)

LBG 63 Based on ApportGas (2019)

MeOH (fossil) 54 800 Methanex (2020)

MeOH (renew) 80

Assumed to cost 1.5 times the price for fossil methanol produced from natural gas (IEA-ETSAP, 2013)

Electricitya 110 (65)a Eurostat (2019)

a The values corresponds to average European electricity prices (and Swedish prices) for medium size consumers (500 MWh< cons< 2000 MWh) (non- households) for the last 10 years according to Eurostat (2019)

The LBG prices are based on biogas prices in Sweden for 2018 and its relation to the natural gas price for small costumers given by ApportGas (2019). Results showed that the biogas prices (without taxes, i.e. CO2-tax, energy tax and VAT) was approximately twice the natural gas price. It was assumed that also in 2015 this was the case, and the same cost was added to the biogas for distribution and liquefaction as for natural gas. Hence the LGB price is calculated assuming double the cost of natural gas and then adding the same cost as for LNG for transportation and liquefaction. For the future fuel price scenarios, it is assumed that there is a price reduction so that the cost is 70% higher than natural gas in 2030 and 50% higher in 2045. The additional cost for liquefaction and distribution is assumed to be unchanged over time.


0

10

20

30

40

50

60

70

80

90

2009 2010 2011 2012 2019

$/M

Wh

European methanol contract

Natural gasprice, Europe

Brent crude, Europe

Natural gas price, US

LNG prices, Europe

Methanol prices spot

2013 2014 2015 2016 2017 2018 Year

Methanol prices

Methanol prices for 2015 are based on data from Methanex (2020). According to Andersson and Márquez Salazar (2015) the total cost of methanol is equal to or lower than that of LNG because methanol´s distribution costs are lower. However, according to Figure A1, this does not seem to be true for all situations. It is also a question whether it is compared to the methanol spot prices or to the methanol contract prices. The contract prices are in general somewhat higher. For the calculations in this study it is assumed that the methanol price is 2.5 times higher than the price of natural gas based on the historical trends, see Figure A1.

Figure A1. Price developments for natural gas, LNG, methanol and Brent Crude, Europe. Source: Andersson and Márquez Salazar (2015)

Green methanol (i.e. methanol produced from renewable sources) is only available in limited amounts today. There are currently three places where it is produced; ENERKEM in Canada produces renewable methanol based on municipal solid waste (via gasification), on Iceland geothermal energy is combined with renewable hydrogen to produce methanol and in the Netherlands BIOMCN converts biogas to bio- methanol (Methanol Institute, 2019). Hence the price information is limited. In this study the price for renewable methanol was assumed to be 50% higher than the price of fossil methanol in 2015. For the future fuel price scenarios, it was assumed that the price of renewable methanol would decrease over time, being 25% more expensive than fossil methanol in 2030 and just 10% more expensive in 2045. The renewable methanol prices derived based on these assumptions does not differ significantly from the prices projected by Castellanos et al. (2019) for e-methanol to 2045, whereas their prices are approximately 40% higher than those estimated for green methanol in this study for 2030.

Fuel price scenarios

The World Energy Outlook (IEA, 2019a) presents different scenarios regarding fuel production, demand, utilization and prices that differ primarily by their underlaying assumptions regarding the evolution of energy-related government policies.

In the Stated Policies Scenario (STEPS), policies that are stated (or implemented) today are included. IEA assumes that Europe has its ETS including the currently included sectors (industry, power and


aviation) and that there are also other regions in the world that have ETS (including Canada, Chile, China, Korea and South Africa).

Table A4. Policy assumption by scenario for selected regions. Source: (IEA, 2019a)

Region Scenario Assumptions

European Union

STEPS Stated Policy Scenario

NDCa targets and 2030 Climate and Energy Framework:

• Reduce GHG emissions by at least 40% below 1990 levels • Increase shares of renewables to at least 32% • Partial implementation of goal to save 32.5% energy use compared with BAU-

scenario

Draft National Energy and Climate Plans (NECP) submitted in June 2019 in support of 2030 Climate and Energy Framework

ETS reducing GHG emission 43% below the 2005 level in 2030

National Emissions Ceiling Directive to reduce emissions of SO2 by 79%, NOx by 63%, PM2.5 by 49%, NMVOC by 40% and NH3 by 19% below 2005 levels by 2030.

Increase share of renewable in heating and cooling by 1% per year to 2030.

All regions SDS Sustainable Development

Scenario

Universal access to electricity and clean cooking facilities by 2030.

Staggered introduction of CO2 prices (in all advanced economies and in some selected developing economies).

Fossil fuel subsidies phased out by 2025 in net-importing countries and by 2035 in net-exporting countries.

Maximum Sulphur content of oil products capped at 1% for heavy fuel oil, 0.1% for gasoil and 10 ppm for gasoline and diesel.

Policies promoting production and use of alternative fuels and technologies such as hydrogen, biogas biomethane and CCUSb across sectors.

a NDC = nationally determined contributions according to UNFCCC and the Paris Agreement.

b CCUS = carbon capture utilization and storage.

The IEA (2019) present the assumed fuel mix for the three sectors; industry, power and buildings for the different scenarios and in the SDS (Sustainable Development Scenario) it is clear that the transport sector still will use a significant amount of oil. The use of natural gas will increase in all three sectors, most in the industry and building sectors, but also in the transport sector. Further they state that they think that hydrogen will be used in the shipping sector after 2030 and that the shift from fuel use to using electricity will be important in all three sectors including transport.

Onshore power supply

In Table A5 the data used for calculating the abatement costs for the RoPax 2 ferry in the data set A. The data is mainly based on Wilske (2009), which included a detailed case study for on shore power supply in the port of Gothenburg.


Table A5. Input data for cost calculations for Ropax case using onshore power supply.

Reference

Cost for retrofitting of quay 200,000 €2009

Call per week 4 (Wilske, 2009)

Stop over time 14 h (Wilske, 2009)

Power demand 1,200 kW (Wilske, 2009)

Energy demand 16,800 kWh/call (Wilske, 2009)

Bunker consumption per produced energya

0,20 kg/kWh (Wilske, 2009)

Cost to retrofit the vessel 400,000 €2009 (440,427 €2015) Wilske (2009)

Cost to retrofit vessel 4,100,000 SEK2011 (477,220 €2015) Thulin (2014)

Bunker consumption per call 3.36 ton/call Wilske (2009)

Cost for maintenance of auxiliary engines at berth

1.6 €2014/h Thulin (2014)

a This is also called the specific fuel consumption (SFC) for auxiliary engines and this value is in line with the estimates by Carlsson et al. (2019), who estimates that the SFC for auxiliary engines using MGO is 217 gfuel/kWhout.

Note that the cost for retrofitting the quay was not included in the cost calculations since focus of the calculations are on costs for the shipowners. It is more likely that the port will be the actor that needs to take this cost.

The annual electricity demand in port was calculated by multiplying the power demand per call by the number of calls per week and 52 weeks of the year, totaling ~3,500 MWh/yr. The reduction in annual fuel consumption was estimated by assuming that the bunker consumption in port could be reduced to zero. The annual bunker consumption in port was calculated by 3.36 ton/call* 4 call/week* 52 week/yr = ~700 ton/yr.

Total cost for the shipowner was calculated by:

Tot cost = investment cost for ship retrofit * CRF- cost for maintenance of the auxiliary engine- cost for saved bunker fuel+ cost for power from grid Eq. (A2)

Fuel shift Table A6. Lower heating values for fuels included in this study. Mainly based on Gilbert et al. (2018)

Fuel LHV [MJ/kgfuel]

HFO (LSHFO) 40.5

MGO/MDO 42.6

LNG (LBG) 48.6

Methanol (fossil and renewable) 20

HVO 43.6

Diesel MK 1 43.3

Diesel MK3 (EN590) 42.6

Hydrogen 120


Table A7. Type vessels chosen for the presentation of results in figures of the main report. The choice of size class for each vessel category is the one with the highest fuel consumption in main engines.

Type vessel Area Power range

RP Domestic 40,000–55,000

RP International 25,000–40,000

PC Domestic 18,000–25,000

PC International >55,000

PF Domestic <1,000

PF International <1,000

BU Domestic 2,000–8,000

BU International 2,000–8,000

CA Domestic 2,000–8,000

CA International 2,000–8,000

CO Domestic 8,000–18,000

CO International 8,000–18,000

TA Domestic 2,000–8,000

TA International 2,000–8,000

VE Domestic 8,000–18,000

VE International 8,000–18,000

Figure A2. The SHIPAIR model area. Source: Windmark (2019).


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