This paper aims to assess the direct economic impact on the maritime sector from its inclusion in the European Union-Emission Trading System (EU-ETS). The Monitoring, Reporting and Verification (MRV) data are analysed for the estimation of carbon dioxide (CO₂) emissions within the European Economic Area (EEA). The economic impact assessment model used is scenario-based, and includes different price incentives, geographical coverage and emission allowances allocation methods. According to our findings, in case the emission allowances are fully auctioned or partially free allocated on the basis of a uniform benchmark, the increased costs would be disproportional among the maritime segments. Such a scheme would penalise Roll-on/Roll-off (RoRo) and Roll-On/Roll-Off/Passenger (RoPax) segments due their high fuel consumption per transport work in relation to oil tankers and bulkers. The establishment of differentiated benchmarks per segment seems to be a prerequisite for the effective inclusion of shipping in the EU-ETS that will reward energy efficient vessels in each segment and avoid competition distortion within the maritime industry.

The COVID-19 pandemic significantly impacted the way we do business and trade. As a result of the pandemic, a variety of stakeholders in the maritime sector have been adversely affected; nevertheless, they adapted successfully to the new circumstances and learned how to make the necessary compromises. The purpose of this study is to examine the status of ships’ energy efficiency during the pandemic. It is hypothesized that the pandemic has strengthened barriers to ship energy efficiency, and shipping decarbonization has not been a priority for stakeholders throughout the pandemic. To examine this hypothesis, by conducting a literature review and utilizing the barrier models, the energy efficiency barriers were revisited through the lens of the COVID-19 pandemic. The established focus group assessed the impact of the pandemic on these barriers. The pandemic revealed the vulnerability of shipping’s energy efficiency, and a majority of barriers were strengthened as a result. A number of factors have contributed to the marginal decarbonization of shipping during the pandemic period, including inadequate and lenient energy regulations (policy gap), economic crisis within shipping companies (low freight rates and a decline in charter markets), and extremely low fuel prices.

This study examines the steps to lower air emissions in South Korea’s domestic shipping sector. It highlights the significant contributions of the sector to air pollution and greenhouse gas emissions, emphasizing its impact on environmental sustainability and climate change mitigation. By looking at the current shipping energy use and emissions, the research identifies ways to reduce the environmental impact of domestic shipping. Data was collected from domestic ferry routes and the fuel use was reviewed with respect to existing global technologies for reducing emissions. The results show that operational changes and current energy-efficient technologies can quickly cut emissions. Furthermore, a long-term plan is suggested, involving the development of new ship designs and the use of net-zero fuels like biofuels, methanol, hydrogen and ammonia. These efforts aim to meet climate goals, targeting a 40% reduction in greenhouse emissions by 2030 and a 70% reduction by 2050, making South Korea’s shipping industry more sustainable and resilient.

In a carbon pricing mechanism, the collection of contributions (taxes) and the distribution of carbon revenue are both equally critical, as they constitute the interdependent elements of the same system. While contribution collection serves to economically incentivize stakeholders, carbon revenue distribution fosters participation in decarbonization efforts through mechanisms such as rebates, rewards, and green loans. The economic effects of a carbon pricing mechanism vary significantly depending on how the generated revenues are used. A well-structured organizational framework can assist policymakers in optimizing the allocation of carbon revenues, thereby supporting a robust fiscal policy that promotes efficiency, long-term growth, and equity. Despite the critical role of carbon revenue distribution, there is a notable absence of literature addressing this issue in the maritime context. To address this gap, this study draws on insights from other sectors and global carbon pricing mechanisms to develop a simulatory template for evaluating its applicability to the maritime industry. The simulation yields a comprehensive classification of approaches to carbon revenue recycling, while also examining the associated risks and challenges in implementing future carbon pricing mechanism in the maritime industry.

By Peyman Ghaforian Masodzadeh, Published on 01/01/23