Keyword: regulation


Mapping the Supply Chain of Ship Recycling

Hsuan, Juliana; Parisi, Cristiana

Ship recycling refers to the process of dismantling vessels with the purpose of extracting and recovering materials for reuse, particularly the steel. The aim of this paper is to map the supply chain of ship recycling. This exploratory and qualitative research provides a glimpse on how regulations influence the supply chain management through inter-organizational arrangements. It considers the trade-offs and combinations of financial and sustainable values that, in many ways, determine these inter-organizational arrangements. Preliminary findings show that there are conflicts of interest with the ship recycling stakeholders. Although compliance of regulations should foster better transparency in the supply chain, these regulations have not yet fully embraced social aspects, such as the fact that domestic demand and supply for steel, as well as many jobs, are dependent on this industry. On the contrary, the initiatives to regulate ship recycling might induce negative effects. This paper suggests that transaction costs analysis and the principal agency theory are two complementary theories for analyzing inter-organizational relationships in the supply chain of ship recycling.

Marine Policy, Volume 118 / 2020
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Policy measures to avert possible modal shifts caused by sulphur regulation in the European Ro-Ro sector

Zis, Thalis; Psaraftis, Harilaos N.; Panagakos, George; Kronbak, Jacob

The 0.1% limit in sulphur content within Sulphur Emission Control Areas as of 1st January 2015 requires that ship operators either use pricier ultra-low sulphur fuel oil, or alternatively install abatement technologies through substantial capital investments. A part of the resulting higher operating costs are passed on to shippers resulting in increased freight rates. These may lead to modal shifts towards rail or road options competing with Ro-Ro operators. Due to the unexpectedly low fuel prices in the period 2014–2016, Ro-Ro operators were relatively unharmed by the new limits, but nascent research has shown that if fuel prices increase some Ro-Ro services may not survive. This paper examines a set of policy options that can mitigate or reverse the negative effects of the low-sulphur regulation. The measures include internalizing external costs of transport, repaying fuel surcharges to shippers, subsidizing technological investments of ship operators, or increasing the landbased costs of transport via levies. To compare their efficacy, total costs are calculated for each measure. The results show that the proposed measures can successfully reduce the negative effects of the regulation but this would entail significant costs. A combination of subsidies towards shippers and ship operators is shown to be effective at reversing potential modal shifts and can be crucial in case of high fuel prices in the near future. The findings of this work can assist operators to develop new strategies and improve the resilience of their network, and regulators designing environmental policies that may have negative implications on certain sectors.

Transportation Research Part D: Transport and Environment, Volume 70 / 2019
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The role of Ro-Ro shipping in a stricter regulatory environment

Panagakos, George; Solakivi, Tomi; Zis, Thalis; Psaraftis, Harilaos N.

This report presents the results of Activity 3.2-2 of the Scandria®2Act project. It investigates the sensitivity of the Ro-Ro services along the Scandria® corridor to fuel cost fluctuations, anticipates the adverse effects of a possible fuel price hike and discusses potential mitigating measures.

Among the 77 Ro-Ro services that include at least one direct connection between two Baltic ports, the Finland-Germany connections were selected for further examination mainly because this is where the ScanMed and NSB core network corridors meet providing two major alternatives, each of which offer at least two options. In terms of abatement options available to the Ro-Ro operators, the study considers only the switching from Heavy Fuel Oil (HFO) to the compliant but more expensive Marine Gas Oil (MGO), which happens to be the only feasible solution in the short-run that does not require a substantial capital investment.

The study deployed two different approaches in meeting its objectives. The first one looked at the problem from the macro-level perspective and the analysis was based on aggregate annual statistics of the ports serving the Finland-Germany connections. A multiple regression model estimated the sensitivity of cargo flows to fuel price fluctuations. Although most of the cargo volumes exhibit a statistically significant sensitivity to fuel price, in all cases this is below 1.0, indicating a rather inelastic
behaviour. The results show that an increase in fuel price penalises the volume of lorries on the longdistance Helsinki-Germany route in favour of the shorter Helsinki-Tallinn and Hanko-Germany options. The trailer (unaccompanied) traffic exhibit a different behaviour that might relate to the pricing policies of the Ro-Ro operators in relation to this market segment.

/ 2019
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The South China Sea arbitration: Environmental obligations under the Law of the Sea Convention

Tanaka, Yoshifumi

This case note analyses the marine environmental protection issues that arose in the 2016 South China Sea arbitration. Given that the South China Sea includes highly productive fisheries and extensive coral reef ecosystems, the alleged breach of environmental obligations under the United Nations (UN) Convention on the Law of the Sea was important in this arbitration. The Arbitral Tribunal examined three obligations concerning marine environmental protection under the UN Convention on the Law of the Sea: the obligation of due diligence; the obligation to conduct an environmental impact assessment; and the obligation to cooperate. The Tribunal's arbitral award contributes to the clarification of the interpretation of relevant provisions concerning marine environmental protection under the Convention. Furthermore, a remarkable feature of the arbitration was that the Tribunal appointed experts to have an independent opinion with regard to environmental damages arising from China's activities in the South China Sea. The use of experts in the South China Sea arbitration is worth noting, since scientific evidence is of particular importance in the settlement of international environmental disputes.

Review of European, Comparative & International Environmental Law, 27(1) / 2018
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Payback Period for Emissions Abatement Alternatives: Role of Regulation and Fuel Prices

Zis, Thalis; Angeloudis, Panagiotis; Bell, Michael G. H.; Psaraftis, Harilaos N.

As of January 2015, the new maximum limit of fuel sulfur content for ships sailing within emission control areas has been reduced to 0.1%. A critical decision for ship owners in advance of the new limits was the selection of an abatement method that complies with the regulations. Two main options exist: investing in scrubber systems that remove sulfur dioxide emissions from the exhaust and switching to low-sulfur fuel when sailing in regulated waters. The first option would involve significant capital costs, while the latter would lead to operating cost increases because of the higher price of the fuel used. This paper presents a literature review of emissions abatement options and relevant research in the field. A cost–benefit methodology to assess emission reduction investments from ship owners is also presented. A study examined the effects of recent drops in bunker fuel price to the payback period of a potential scrubber investment. The results show that lower prices would significantly delay the payback period of such investments, up to two times in some cases. The case studies present the emissions generation through each option for representative short sea shipping routes. The repercussions of low-sulfur policies on large emission reduction investments including cold ironing are examined, along with implications of slow steaming for their respective payback periods. Recommendations are made for research in anticipation of future regulations and technological improvements.

Transportation Research Record. 2016;2549(1) / 2016
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Regulation of Greenhouse Gas Emissions from International Shipping and Jurisdiction of States

Tanaka, Yoshifumi

The regulation of greenhouse gas emissions from international shipping is becoming a matter of increasing concern. Two issues arise in particular. The first issue concerns the elaboration of rules on this subject. In this regard, Annex VI of the International Convention for the Prevention of Pollution from Ships (MARPOL), amended in 2011, constitutes a key instrument because it was the first legally binding climate change instrument since the Kyoto Protocol. The second issue relates to effective compliance with relevant rules. While the flag State has the primary responsibility to implement relevant rules concerning the regulation of greenhouse gas emissions from international shipping, the flag State responsibility alone is inadequate to secure effective compliance with relevant rules. Thus, there is a need to examine the question whether and to what extent coastal and port States can regulate greenhouse gas emissions from vessels in international law. This article seeks to address these two issues. The article concludes that while port States can perform a valuable role in effectuating global rules provided in MARPOL Annex VI, port State control encounters several challenges. Thus, securing compliance with relevant rules should be an important issue in the regulation of greenhouse gas emissions from international shipping.

Review of European, Comparative & International Environmental Law, 25( 3) / 2016
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