Emission Reduction Technology and Cost Efficiency for Ships Operating on the Northern Sea Route: A Case Study

The Northern Sea Route (NSR) has recently become an alternative route for seaborne transportation between Europe and Asia due to the decreasing ice conditions. The reduced sailing distance can provide great savings in time used and fuel consumption. However, there are environmental concerns regarding increased emissions in Arctic areas. Emission regulations in MARPOL’s Annex VI sets limits for emission of sulphur oxides (SOx) and nitrogen oxides (NOx) in special areas. The Arctic areas are potentially a candidate for a such status. There are several alternative technologies under development to comply with the new regulations, including exhaust gas cleaning systems, cleaner fuel and cleaner engines. However, the costs of complying are significant, and payback on investments depends on the overall operational profile. This paper addresses the decision of using either the NSR or the SCR between Europe and Asia, given a new Emission Control Area (ECA) in the Arctic Seas. The study quantifies the effects of introducing ECA regulations in these areas, and compares the costs of sailing the NSR to the costs of sailing the conventional route via the Suez Canal. The study considers one case ship and three different scenarios with different technology installed in order to comply with emission regulations. The results from the scenario simulations show significant reductions in fuel consumption and emission reductions for the NSR. However, with the present fuel cost and emission legislation, the NSR with an Arctic ECA will not be cost efficient compared to the SCR.