External Cost-Benefit of Emission Control Routes between Korea and China Liner Shipping Networks

External Cost-Benefit of Emission Control Routes between Korea and China Liner Shipping Networks

Purpose - International Maritime Organization (IMO) regulations on air pollution for the shipping industry have been strict, and various related policies and projects are being implemented internationally to demonstrate eco-shipping. This study aims to design a new scheme for eco-shipping, namely Emission Control Routes (ECR) regarding ship operations, and to estimate social, environmental, and economic benefits through its implementation. Design/Methodology/Approach - This study employed Kernel Density Estimation (KDE) analysis based on voyage segments to design the ECR domain. In addition, this analysis was conducted using data from the Automatic Identification System (AIS) for 1,728 port calls in liner shipping between Korea and China. Finally, the amount of external cost was estimated by scenario analysis, which set the speed limit within ECR waters at 10, 11, and 12 knots. Findings - The results found that if the ECR system is implemented in the liner service between Korea and China, social and environmental costs can be reduced by 26.17% - 40.61%, and ship operators can achieve cost savings of 45.07% - 66.99% in fuel costs. Research Implications - This study is crucial as it explores a new direction of air environment policy for the shipping industry, and analyzes the cost-effectiveness following the scenario condition for implementing the ECR strategy. In addition, political performance can be created synergistically when existing environmental policies have the potential for collaboration with the Emission Trading System (ETS).