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Primer On The Cost Of Marine Fuels Compliant With IMO-2020 Rule (August 2021)

MARAD partnered with Oak Ridge National Laboratories and the University of Delaware to analyze the cost of different approaches to compliance with the IMO mandate (which came into effect on January 1st, 2020) to reduce the sulfur content of marine fuels (outside ECAs - emission control areas) to no more than 0.5%. The report discusses different options for compliance including low-sulfur petroleum-based fuels and alternative fuels such as natural gas, methanol, ammonia and ethanol (biofuel). Since fuel prices are a primary factor in determining the cost of the various alternatives, this report also includes a discussion of the main drivers of marine fuel prices. The cost analysis compares the average annual costs (capital and fuel) out to 2050 of each compliance approach under alternative scenarios regarding fuel prices, policy, and technology innovation. The cost calculations apply to representative U.S. fleet vessels for containership and tanker types. To be noted that the comparison of approaches also acknowledges other benefits or risks including fuel price risk and the contribution of the approach to addressing other potential environmental performance objectives or regulations.

Last updated: Tuesday, December 28, 2021