The impact of regulations on energy use in EU; Maritime transportation sector

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dc.contributorAalto Universityen
dc.contributorAalto-yliopistofi
dc.contributor.advisorAkbar, Prottoy
dc.contributor.authorHärkälä, Juho
dc.contributor.departmentTaloustieteen laitosfi
dc.contributor.schoolKauppakorkeakoulufi
dc.contributor.schoolSchool of Businessen
dc.date.accessioned2023-01-22T17:09:29Z
dc.date.available2023-01-22T17:09:29Z
dc.date.issued2022
dc.description.abstractNegative externalities caused by human action are becoming increasingly evident as a partly root cause for climate crisis. Cross-border climate regulation is trying to ease the negative effects that arise from the pursuit of economic growth. International maritime transportation is one of the main enablers of economic growth and at the same time responsible around 3 % of global emissions. A wake-up call is needed to combat environmental harm in the industry, as DNV estimates that the demand for maritime transport will increase by 60% by 2050. International organizations such as IMO and EU have increased their interest on the pollutive emissions caused by international maritime sector in recent years. The tightening of MARPOL charter especially regarding the sulfur emissions, and implementation of EU MRV regulation in 2015 are signs of change. This thesis will concentrate on tightened SECA (Sulfur emission control areas) regulation. In this thesis one will go through the changes in the maritime sector by measuring the impact of regulations to fuel consumption in the international maritime bunkers in EU. The supply and demand of maritime transportation sector is mostly driven by global economic situation, cost level and commodity prices. One of the main characteristics of the sector is rather inelastic demand. Price level changes will not be fully reflected in demand. This is due difficult substitutability. Shipping can’t be replaced totally. On the other hand, supply of maritime transportation would adjust to changes quite elastically. In short-term ship operators can decrease their speed or lay-off crews. In turn, they can bring in less-efficient fleets or invest in new ships in a time of rapid increase in demand. Literature suggests the regulatory changes on SECA will effect on the fuel consumption. As the new limit of 0,1 % sulfur in the bunker fuel were implemented shipping companies had two choices. Either retrofit their fleet with sulfur scrubber system or shift HSFO (High sulfur fuel oil) into distillate fuels with low sulfur content. Both options tend to denote excess costs for market players, scrubber system even increase the fuel consumption due increase of total weight of a ship. The results indicate that the regulation would even increase the consumption of maritime bunkers, but as controlling the variables informing the economic activity, the effect was left slightly negative. For the whole EU area, the regulation would have decreased the consumption of bunker fuels by 0,1%. That should be taken with pinch of salt as oil prices were significantly low in 2015 and likely smoothed the change.en
dc.format.extent50+5
dc.identifier.urihttps://aaltodoc.aalto.fi/handle/123456789/119103
dc.identifier.urnURN:NBN:fi:aalto-202301221457
dc.language.isoenen
dc.locationP1 Ifi
dc.programmeEconomicsen
dc.subject.keywordregulationen
dc.subject.keywordinelastic demanden
dc.subject.keywordinternational maritime transportationen
dc.subject.keywordfuel consumptionen
dc.titleThe impact of regulations on energy use in EU; Maritime transportation sectoren
dc.titleSääntelyn vaikutukset meriliikenteen polttoaineen kulutukseen EU-alueellafi
dc.typeG2 Pro gradu, diplomityöfi
dc.type.ontasotMaster's thesisen
dc.type.ontasotMaisterin opinnäytefi
local.aalto.electroniconlyyes
local.aalto.openaccessno
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[gradu] Kauppakorkeakoulu / BIZ