Green Technology Adoption and Fleet Deployment for New and Aged Ships Considering Maritime Decarbonization

Abstract

Maritime decarbonization and strict international regulations have forced liner companies to find new solutions for reducing fuel consumption and greenhouse gas emissions in recent years. Green technology is regarded as one of the most promising alternatives to achieve environmental benefits despite its high initial investment costs. Therefore, a scientific method is required to assess the possibility of green technology adoption for liner companies. This study formulates a mixed-integer nonlinear programming model to determine whether to retrofit their ship fleets with green technology and how to deploy ships while taking maritime decarbonization into account. To convert the nonlinear model into a linear model that can be solved directly by off-the-shelf solvers, several linearization techniques are applied in this study. Sensitivity analyses involving the influences of the initial investment cost, fuel consumption reduction rate of green technology, unit fuel cost, and fixed operating cost of a ship on operation decisions are conducted. Green technology may become more competitive when modern technology development makes it efficient and economical. As fuel and fixed operating costs increase, more ships retrofitted with green technology will be deployed on all shipping routes.