Shipping Emission Control Area Optimization Considering Carbon Emission Reduction

Dan Zhuge (), Shuaian Wang () and Lu Zhen ()
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Dan Zhuge: School of Management, Shanghai University, Shanghai 200444, China
Shuaian Wang: Faculty of Business, The Hong Kong Polytechnic University, Hung Hom 999077, Hong Kong
Lu Zhen: School of Management, Shanghai University, Shanghai 200444, China

Operations Research, 2024, vol. 72, issue 4, 1333-1351

Abstract: Sulfur emission control areas (ECAs) are crucial for reducing global shipping emissions and protecting the environment. The main plank of an ECA policy is usually a fuel sulfur limit. However, the approaches to setting sulfur limits are relatively subjective and lack scientific support. This paper investigates the design of ECA policies, especially sulfur limits, for sailing legs with ECAs. The objective is to minimize the social costs of shipping operations, local sulfur oxides (SO x ) emissions, and global carbon dioxide (CO 2 ) emissions. First, a case with a no-ECA policy and a case with the current ECA policy are analyzed. Then, two new voyage-dependent ECA policies with sulfur limits, designated sailing paths, and speed limits are proposed. Stackelberg game models are developed to solve the research problem with the two proposed policies and two players: the ECA regulator and a shipping company aiming to minimize social costs and company costs, respectively. The ECA regulator determines the sulfur limit, sailing path, and speed limit, and the shipping company optimizes the sailing speed accordingly. We also compare and analyze each type of cost under different ECA policies (i.e., no ECA, the current ECA policy, and the proposed ECA policies). The research problem is then extended from a sailing leg to a shipping network to improve the practicality of the findings. A dynamic programming-based algorithm is developed to optimize the ECA policies for the shipping network from the perspective of the ECA regulator. Mathematical derivation shows that the proposed ECA policies can reduce the social costs of shipping. The results of extensive numerical experiments further demonstrate the ability of the proposed policies to reduce social costs, providing important insights for voyage-dependent ECA policy design.

Keywords: Transportation; local sulfur oxides emissions; global carbon dioxide emissions; emission control areas; voyage-dependent ECA policy design (search for similar items in EconPapers)
Date: 2024
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